The bill is certainly big, but it’s damn ugly. 
Republicans Surrender
Please note The GOP Surrenders on Medicaid
The House bill shrinks from a fight over able-bodied men on the dole.
The work requirement doesn’t kick in until 2029—a political lifetime from now. The bill also sets up a waiver process, which states have long abused to evade work rules in food stamps.
But far more notable is that the bill fails to end Medicaid’s outrageous bias toward prime-age men who can work. The feds pay 90% of the cost of able-bodied adults eligible for Medicaid under the Affordable Care Act—but only roughly 50% to 77% (depending on the state) for pregnant women, the blind and so on.
Republicans won’t even insist that able-bodied persons must work.
Pathetic.
The Ugly Truth About the ‘Big Beautiful Bill’
Senator Ron Johnson (R. WI) explains The Ugly Truth About the ‘Big Beautiful Bill’
The “One Big Beautiful Bill” that Congress is working on is certainly big, but beauty is in the eye of the beholder. Too often the reality of these budget debates get obscured in details, politically charged issues and demagoguery. Let me attempt to clarify the current discussion by focusing on the most important facts and numbers.
In fiscal 2019, federal outlays totaled $4.45 trillion, or 20.6% of gross domestic product. This year, according to the Congressional Budget Office’s January 2025 projection, total outlays will be $7.03 trillion, or 23.3% of GDP. That’s a 58% increase over six years. The CBO projects federal outlays will total $89.3 trillion across fiscal 2026-35. Much of the blame goes to pandemic spending, but lockdowns are long over. There’s nothing now to justify this abnormal level of government spending. Pathetically, Congress is having a hard time agreeing on a reduction of even $1.5 trillion from that 10-year amount. That’s a 1.68% cut—a little more than a rounding error. My guess is that much of that minuscule decrease will be backloaded to the end of the 10 years for which Congress is now budgeting, increasing the probability those savings will never be realized.
Other than during World War II, the increase in spending we’ve experienced over the past six years is unprecedented. After the war, Congress and President Truman understood the importance of returning spending to normal levels. In 1941, total outlays were $13.7 billion, or 11.7% of GDP. They peaked in 1945 at $92.7 billion, or 41% of GDP. That was a 577% increase, 10 times as large as what we experienced with the pandemic. Yet by 1948, federal outlays were $29.8 billion and back to a little over 11% of GDP.
Under every scenario now being considered, federal debt continues to skyrocket from its current level of almost $37 trillion. The CBO’s current projection adds around $22 trillion over the next 10 years, resulting in total debt of approximately $59 trillion—134% of GDP—in 2035. That projection assumes an automatic tax increase will occur in 2026 when provisions of the 2017 tax cuts expire, increasing revenue from 17.1% of GDP in fiscal 2025 to an average of 18.1% over the next 10 years. With the CBO projecting 10-year GDP at $373 trillion, that 1% increase represents $3.7 trillion of additional revenue and lower debt.
No one can accurately predict the dynamic economic effects of changes in tax law, tariffs and the current trade war. But by repealing the automatic tax increase, adding $1.5 trillion in additional tax cuts, pumping around $340 billion into additional border and defense spending, and reducing other spending by at most $1.5 trillion, the One Big Beautiful Bill will almost certainly add to our deficits and debt. I doubt Mr. Trump’s voters expect us to continue spending at President Biden’s levels, which led to the inflation they elected Republicans last year to stop. I doubt, too, that Trump voters will be elated to see the GOP embrace Democratic policies and priorities—including ObamaCare, which seems to have found new life under the name “Medicaid expansion.” And I can’t imagine that they want Republicans to increase annual deficits. That’s why I can’t support this bill as it’s currently being discussed and doubt that it will pass the Senate.
It’s also why I’m asking the president and congressional leaders to reconsider a multistep strategy on budget reconciliation. By immediately passing a bill based on the Senate’s original budget resolution, we can fund border security and defense priorities and bank $850 billion in real spending reductions. The next step would be to pass a bill that extends current tax law to prevent the automatic 2026 tax increase, and avoids default by including a smaller increase in the debt ceiling that maintains the pressure and leverage to achieve future spending reductions.
With those goals achieved, sufficient incentive would remain to address President Trump’s tax proposals focusing on working men and women and the already-expired business tax provisions of his 2017 tax law. It would also give us the time to simplify and rationalize the tax code, and go line by line through the entire federal budget to uncover, expose, and eliminate the hundreds of billions of dollars of waste, fraud, and abuse that the DOGE effort has shown exists. If we don’t, America is headed off a cliff.
Powell Sinks to Trump’s Level?
“When the facts change, I change my mind. What do you do, sir?”
Unfortunately, that’s paywalled. But Booth has been all over Powell for not cutting rates.
Time for the Fed to Do What?
My position remains as follows.
Rate Cuts? Seriously?
Earlier today I noted Fed Rate Cut Odds Plunge on Trump-China Tariff Walk Backs
Empty Shelves for Christmas Likely Avoided
One thing that’s changed is empty shelves for Christmas have been avoided.
Shipping costs that had plunged will now soar. And we will have approximately a 40 percent increase in the price of goods from China.
Fiscally nothing has changed. The budget rates to be an absolute disaster with even Republicans unwilling to cut much of anything.
The change in shipping costs, 40 percent tariffs on goods from China, and the deficit all add upward. pressure on inflation.
Bond Market Reaction
The bond market reacted appropriately today.
The 10-year treasury yield is now up 10 basis points on the day to 4.48 percent. And the 30-year long-bond is now up 8 basis points to 4.91 percent.
Perhaps tomorrow we have some good news on the CPI. But if not, expect another jump in long-term yields.
Only soaring interest rates will force them to change. The Federal government, unbelievably, still isn’t perceived as a credit risk.
I believe that’s correct. There is nothing left to enforce any sort of fiscal sanity.
BTW, as far as I can tell, the House GOP bypassed the neutral Congressional Budget Office for some sort of entity called the “JCT” to score their “big beautiful bill.” I have never heard of this before. Obamacare, past spending deals, etc. all used the CBO to score the budget.
It appears that Mike Johnson decided to rig the game.
GOP tax bill would add trillions to debt
Unfortunately this is why I think Powell is the only true force for good in the government right now. Despite his obvious f-up on transitory inflation, he’s held the line on interest rates and implemented SOFR. He probably single handedly stopped build back better because of interest rates, so hopefully that trick will work again on this bill.
One wonders why Senator Johnson didn’t make any effort to point out what areas of the government has received the biggest increases. Just saying it is up a lot doesn’t provide much insight.
Trump is more generous to the actual poor than any DNC democrat.
Of course the spending must go on. Only by ending the theft and gouging of the criminal gov/med/edu/media/pharma/insuro cartels can costs ever be reduced. Abandoning the helpless 50% of the population won’t even put a dent in it.
amazing market today. so far middle of may 13
up:
stocks
gold
oil
and %bonds
someone must give up..
my bet on stocks. YOU CAN’T BEAT BONDS… 10YY 4.5%
I GUESS we need ride up %4.75 to trigger sell-off
Gotta ask why when it doesn’t make logical sense. Top of the business cycle founded on over-valuation and historically low yields driving bond prices fr over a decade. Everyone wins until it implodes. Meanwhile the insurance/hedge is in demand–gold will surge as the end gets nearer.
Deficit spending will continue until morale improves.
until exists something to loot in USA!
my bet after eventual blow off congress will cut off SS! there is no other way
China sent secret (“no photos allowed”, they demanded) delegation to Washington DC to negotiate a trade deal on Apr 25, dispelling any and all remaining doubts on who blinked first.
The Financials Times reported “the first meeting to break the US-China trade deadlock was held almost three weeks ago in the basement of the IMF headquarters, arranged under cover of secrecy.”
Only an idiot would have predicted otherwise
ZH has thing w/ china
my bet his chinese girlfriend dumped him.
Um, China allowed the US to ‘save face?’
Ask yourself, why are such stories being planted after the fact? Are they trying to create a narrative?
What “concession” has Trump won that isn’t just a return to the status quo ante?
The interest rate on the 10 year bond today is around the same as September 2001, and we all know what happened then. Going backwards from there 15 years it was in double-digits.
Trump is doing exactly what Biden did – fiscally. The DOGE charade was nothing more than political headhunting and targeted abuse.
The war in the Ukraine goes on and the Genocide in Gaza remains unchecked.
Now he is over licking the boots of the Saudis and obtaining trinkets for his pleasure. Musk at his side like a lap dog. I wonder if Musk will turn off the cars of his detractors like he has done before?
Meanwhile, layoffs in our oil patch are mounting as Cap Ex gets cut by American drillers because OPEC members are flooding the markets with oil at trumps request.
U.S. drillers are paying double what they did last year for a well casing pipe.
Regular Gasoline was $2.96 on the day of the election, today it is $3.15 in my market.
Other than that Mrs Lincoln, how was the play?
Since there must be a means to pay for it all, watch as Trump continues to blow past the too big to fail consortium and Fed hegemony.
Lot of foreign investment monies headed to US, rising with each day that passes. Along with a resurgence in Regional and Local main street banks.
Anyone see any Major Bank institutions lately being involved in resurgence of America? Probably too busy with social engagements and tea for two moments.
You can never know, even Major US Banks need to make a Buck it should be found somewhere in their Business plans
Mish, you deserve an award for reporting and making such good insights.
Of all the bloggers out there that I know of, your predictions and insights have proven to be the truest. Trump is an utter clown, as is the GOP Congress. You’d be hard-pressed to find more than one or two sets of spines in that entire institution.
At one point earlier this year, I had a shred of hope that Trump might be different, might have learned something from his first term. All hope has been utterly crushed.
Watching him land in Saudi Arabia with an entourage of sycophants, mostly Big Tech CEOs, including Larry Fink and Sam Altman, was the final nail in the coffin.
You were right. Nothing is going to change, it’s balls-to-the-wall spending until something breaks and external forces take over.
Mish has been receiving the most important award, the one I created, the Mishelin™ star award.
Here is the guide:
* one star – an informative post** two stars – an informative & witty post (or MAGA cult triggered)*** three stars – informative, witty, cult triggered and deep insights beyond what most people fail to consider.You know Mish is doing something right when the MAGA cult periodically begs him to stop reporting the truth.
I think the MAGA cult have given up trying to put together any sort of counter-arguments. Reality is just too difficult to ignore. Now they passive-aggressivly downvote anyone who dares to call out the utter lack of hope-n-change.
I am considering buying SPY puts for October 2025 with a strike price around Feb 2009 lows.
I would never attend a “rooftop event” in Saudi Arabia. Not Wrigley Field.
psst
the secret to figuring out Trump is his ego
the best at playing to this are the Middle East countries
de’ plane, de’ plane–a palace in the air
who else in the world has cabinet meetings where participants need to effusively fellate the president (answer–other ego maniacs)
it’s all about who makes him feel the bestest
the good of the country is not part of the game
So what is the current status of proposed changes to the SALT deduction? Will any possible increases only apply to joint Federal tax returns or will single filers also be eligible for an increase in the deduction?
I don’t think anybody knows yet. Raising the cap on SALT deductions to $30,000 is a pretty generous approach if an extension of overall lower rates also happens. I live in a high tax state (with a knucklehead governor who’s friends with school shooters).
Several congress critters with GOP affiliation in Blue States, who are working to get SALT reinstated at levels sufficient to be meaningful in their state. Speaker Johnson has such a slim head count majority he will be treading very cautiously and will find a way somehow to accommodate all.
Serving up a platter of Pork is always an incentive and is fundamental to DC. It will be a lean cut of pork as this is not drunken sailor Biden.
A “defense” budget over one thousand billion dollars cannot in any way be considered lean.
Policy appears to be peace thru strength.
Which is different then Guns and Butter as it has been for decades wrecking US Budget.
Shaping up as Guns and Earn your Butter economy as plenty of opportunity is being started up. That is purpose of rebuilding US middle class.
Moving back to a USA where people are once again stakeholders in America. Ending American neo-feudalism as currently envisioned and constructed by elites.
It is the Outlaw and Hillbilly running this Nation which ruffles so many feathers.
I just spotted this comment in a Bloomberg article: “The proposed SALT cap would be $30,000 for individual filers or married couples filing joint returns but $15,000 for married individuals filing separate returns.”
Those $200,000+ / year pensions for suburban metro assistant school superintendents must be paid. “After all, a promise is a promise!”
What’s funny is how the GOP always expects Trump to act like a conservative.
Fauci was right about one thing. Rand is an f-ing moron.
Does anyone take trump seriously? The clown has bankrupted a casino! Even while failing to pay the contractors that built it!
We have president that could not manage a lemonade stand.
The deficit will only get larger under trump despite that gas bags random hacking for headlines.
Who dies trump work for?
I continue to stay invested in gold mining stocks, (even buying more on downturns) as their margins have exploded to 200+% in many cases.
Capital appreciation plus modest dividends while Rome burns.
Margin growth in the mining sector eclipses the declining margins at the Magnificent Seven and the asset class is under-owned.
Of course I also have a diverse portfolio under (supposedly professional) management.
.
Anyone who doubts Trump is a full-on drunken sailor when it comes to spending our tax dollars just needs to be honest with themselves when eyeballing his track record of exploding our deficits and debt. To find the truth, it helps to look for it with open eyes.
What is your evaluation / protection against government potential nationalization of mining assets – anywhere? Easier for governments to do that than the gestapo kicking down doors to check sock drawers.
You do realize that the Dirksen quote “…a billion here, a billion there …” was from over 60 years ago?
I thought DOGE was going to discover a trillion dollars that could be painlessly cut from the budget. What was all that about?
It was sheer stupidity from and out of touch administration that went on a political headhunting exercise. All it did was create inefficiencies and disruptions, saving almost nothing.
It was a circus act like the bearded lady or the wolfman to distract you from the fleecing happening in the background. It’s all a dog & pony show run by an entertainer for your entertainment pleasure.
At the end of Trump’s admin, you’ll be poorer and worse off than before.
In the 70’s, bearded ladies could make a living as a midway attraction. No longer, since bearded ladies (and other assorted gender abnormalities) wander the streets of every city.
All part of the grift against the dumb half of Americans
I’ve stopped counting how many times Danielle DiMartino-Booth’s forecasts have been wrong in the past several years. I am sure she’ll eventually be right at some point… as does a broken clock.
Wasn’t she a PR flak for the federal reserve. I don’t know if she has any training in economics.
It’s never been about cutting overall spending, it’s about cutting spending on things you don’t like(DEI, wokeness, open borders) and replacing that spending with things you like(strong military, secure borders ‘Merica)
Secure border saves money. Trying to run the world doesn’t.
there is little work for “able=bodied” men to find. thanks to the covidiocy hoax creating a domino effect at unemployment thru loss of businesses. its always a mystery how the govt justifies war weaponry and not jobs.
Come on, you’re stuck in 2020-2021. There are innumerable articles online about all the available factory jobs that able bodies American workers (including millions of able-bodied men) are unwilling to take because *gasp* they don’t like the idea of working in a factory, despite the higher pay and better benefits available in recent years. Stop lying to yourself and open your eyes
This whole sound and fury of 2025 has been — for what? American politics are more than ever a “reality” show now.It has been slipping that way since JFK: fast, timed, punctuated marketing overtook substance. He won, alright: “Trump” is the first word upper-left corner on most news sites every day. Congress doing its job, overseeing responsibly, vis a vis the presidency, and fiscal matters, is a fantasy. Trump got in by putting together a purposely unpolished act, pretending to be a pugilist against that drift. Americans love their pretend pugilists. Just look at the movies.
Yup, I’ve been saying for a long time that American is one giant Jerry Springer episode. The country runs on emotional porn. Reason and regulating one’s emotions are discouraged.
Everyone who is paying even the slightest bit of attention knows how this all ends.
Beastie Boys knew this decades ago when they asked “yo man, why’d you throw that chair at Geraldo Rivera?”
Cutting the Effective Federal Funds Rate (EFFR) does nothing for mortgage rates or car loan rates, aka consumer interest rates. Well…. actually that’s not true. Under the USA’s current reckless monetizaton environment (which includes the annual budget deficit, aka fiscal stimulus), cutting EFFR actually pushes up consumer interest rates, as we have seen.
[…] The bill fails to end Medicaid’s outrageous bias toward prime-age men who can work. The feds pay 90% of the cost of able-bodied adults eligible for Medicaid under the Affordable Care Act. Congress is having a hard time agreeing on a reduction of even $1.5 trillion from that 10-year amount. The increase in spending we’ve experienced over the past six years is unprecedented. Much of the blame goes to pandemic spending, but lockdowns are long over. There’S nothing now to justify this abnormal level of government spending. The bill is certainly big, but it’s damn ugly. The GOP won’t even insist that able- bodied persons must work. It’ll be a little more than a rounding error. It will be a disgrace to the American people. Read full article […]
Right but rather than the feds, its ordinary people that pay and will continue to pay for this waste, and the brunt of paying for it hasnt hit them/us yet
=-debt
BY LAWS/CONSTITUTION Congress votes for budget and president just executes spending. no more nor less!!
and that is why Trump has much problem w/ courts, congress voted in spending, and repubs voted during biden too.
=debt
during Clinton-Obama-Biden-etc Repubs at least controlled lower chamber most of years!
or in 1994 there was red wave that took over CONGRESS, during Clinton presidency, AND THEY DID NOTHING!!! Hello NAFTA!!!!
just google.
=maga my a11ss
most amusing thing to me THAT NOT BEING american I know about USA politics and USA fed budget more than %99 of mo11rons who supports Trumpking who think he will do something to fix debt /spending
jesus!!!!
simple thing THAT BY LAWS/CONSTITUTION Congress votes for budget and president just executes spending. not more no less!!
and that is why Trump has much problem w/ courts, congress voted in spending, and repubs voted during biden too.
====
and 2d fact , during Clinton-Obama-Biden-etc Repubs at least controlled lower chamber most of years!
or in 1994 there was red wave that took over CONGRESS, during Clinton presidency, AND THEY DID NOTHING!!! Hello NAFTA!!!!
just google.
alx
ps
dont get me started about bush jr , and repubs controlled congress!
LMAO. Trump. Budget cuts. The GOP nor the Democrats can reduce the budget because their donor base both want it to continue otherwise it wouldn’t.
Silly conservatives. You are just like Charlie Brown when Lucy repeatedly pulled the football expecting a different outcome. I give you three Lucy presidencies that pulled the football on the GOP sucker constituency.
Ronnie Reagan said he would reduce taxes yet raised them on the middle and working classes and left the American taxpayer with a $3T credit card bill. So. The Laffer Curve or reducing taxes on the wealthy would increase revenue was a lie.
Then those silly conservative tried it again with W and same result but his time his tax cuts only expanded the wealth divide and got us a Great Recession due to further gutting financial regulations just like Ronnie did in the 80s while simultaneously increasing the budget deficit due to Iran, Afghanistan and double digit unemployment per U6 unemployment.
And finally we get two iterations of Trump in T 1 and T 2. The second retains the tax cuts of T1 but also increases defense spending just like Ronnie and W, guts regulations like RWR and W and talks a big game about reducing deficits but in fact increases it.
Ronnie Reagan said he would reduce taxes yet raised them on the middle and working classes and left the American taxpayer with a $3T credit card bill.
=====
during Ronnie % deficit/gdp rate was HIGHEST UNTIL crisis 2008 and 2020 (covid)!!
about 5%
to call Ronnie conservative is like calling Trump fit to run marathon, or Biden being Nobel laureate in math.
alx
ronnie raygun was also a lifelong actor. a GE pitchman.
Reagan’s deficit spending was unprecedented at that time. No President before him was that careless with our tax money in peace time.
Since we will be spending money to reopen a big beautiful Alcatraz, I suggest a name change to the “Nancy Pelosi Commemorative Correctional Facility”. Has a wonderful ring to it.
or bush jr housing
Woke right antics like wanting to rename Alcatraz after Pelosi shows they aren’t serious about much these days, certainly not fixing the USA.
“Empty shelves for Christmas”
An observation more reflective of the empty culture.
trump is more an old dixiecrat democrat than he is anything resembling a Repug from 1920s to 70s. raygun of course was a spendthrift.
All pols are massive egos in bloated bodies. The ideal of a small efficient government does not build legacy. Tariffs aren’t about jobs, they are about funding grandiose plans, the same for fiscal deficits.
Yes but in 2000 and 2004 he ran GOP and was considered mainstream conservative, showing just how crazy the GOP has become as they drift to Trump’s authoritarian style of rule.
Rates will go to zero if Trump has to take control of the entire government, and put Powell in the dungeon.
During the 2008 GFC many people thought the end of the fed was at hand. Lol.
No one messes with the iron bank, it has a cold iron forged heart at it’s core and it’s indestructible.
The mystics once whispered that there is only one sacred word, spoken at a whisper, near the iron bank’s heart, that can make it undone.
Only a few people on earth know what this word is but I’m not telling.
Gold
WE ARE AT WAR!
Not sure who with but hey…
Senator Ron Johnson says NO to big beautiful bill.
https://www.politico.com/live-updates/2025/05/12/congress/ron-johnson-gop-megabill-00343638
Let’s see how long it takes for Trump to browbeat him down.
Meanwhile, just ordered another case of popcorn, this show is gonna git gud.
Maybe Marjorie T-G, Thomas Massie, and Anna Paulina Luna (R) can gang up to kill it in the House. We can always hope.
did not trump threaten massie about re election?
Yep. And Massie said, “go ahead, make my day!”
Israel also threatened Massie. It’s difficult being honest in DC.
bs
he will cave in too. they are all traitors
GOP Senator Introduces Bill to Make All Porn a Federal Crime, Following Project 2025 Playbook
Mike Lee wants to deliver a death knell to PornHub. Sounds like it’s time for PornHub to release the browsing history of every politician that supports these types of bans……….in the public interest, of course.
they spend a lot of time on there but only for “research” purposes.
it’s the most research congressmen have done into anything, ever.
Republicans, Democrats, Trump, the Fed? They all suck. They all fail to do the #1 job of preserving the sovereignty of the American people. We have been sold out and at a cheap price.
And you voted for it.
It’s understandable that a lot of the younger people are less aware and informed, they are naturally idealistic, liberal. I was one like that. I voted for Obama believing in the hope, change thing and he is a seemingly cool guy, however he also allowed debasement of the dollar, interest rate repression, more debt, which to me is a big part of our problems, and the republicans then would have done the same, as we have seen them do since then, so they wouldve been the wrong choice too. But youre right, the older folks, gen x and older at least, should know by now. They did vote for it.
Again, if you are going to spend a TRILLION dollars on the Military Industrial Complex then do not even BEGIN to think about cutting Medicaid or forcing white men who CAN NOT GET REASONABLE JOBS in the US today to work.
If you are going to continue the rot and corruption in the government then let it all burn
Speaking of the military, this is mind boggling. This is how bureaucrats manipulate any budget and shows why our budget problems are so unlikely to ever get fixed until AI’s take over.
since it was compared to Biden, does that mean 10% for the new big guy?
CNBC has several “rose-colored sunglasses” headlines at the moment, including this zinger:
“Tariff receipts topped $16 billion in April, a record that helped cut the budget deficit”
“Extraordinary claims require extraordinary evidence”. Let’s see the evidence CNBC.
Trump Says Only a ‘Stupid Person’ Wouldn’t Take a Free Plane From Qatar
There’s no such thing as a free $400 million plane from a foreign government.
It could be a thank you for something that most know nothing about, yet
Qatar is a “strategic ally” of China–there is absolutely no connection between the plane and tariff pause…
Qatar supports Iran in many ways–there is absolutely no connection between the on-going nuclear negotiations and the plane…
Glad to clear that up for you and anyone else wondering about the “gift”
usa gov spends over 7 trln per year
so it is 7000 bill, so it is 20 bil per day
simple math, rounding error
Hawley? Enough said Hawley — an ultra-MAGA Trump ally — expresses vehement opposition to Medicaid cuts. Opinion | Josh Hawley: Don’t Cut Medicaid – The New York Times (archive.ph)
There’s no rest for the working man in China. Full steam ahead back to 16 hour work day
“The American people support this agreement because they know it’s good for jobs in America . And good for human rights. And the development of democracy in China.”
Bill Clinton, 10 October 2000
https://www.c-span.org/…/trade-relations-with…/105973
I can’t believe that anyone is surprised, assuming he or she has been paying the least bit of attention. More to come, no doubt.