Weekly Beat: Federal Budget Edition 2
- Voice for Values
- May 23
- 5 min read
A Note From Our Founder, Judy Stahl
Recently, the convicted felon currently occupying the White House accepted a $400 million plane as a gift from the Arab nation of Qatar. According to the Emoluments Clause of the U.S. Constitution, elected federal officials and judges are prohibited from accepting gifts of value from foreign governments without Congressional approval. Despite this, Republicans, who currently hold the majority, have done nothing to stop it.
Our current president is not a serious leader. He appears uninterested in serving the country or upholding the core ideals of democracy. His primary concern seems to be personal enrichment. I could elaborate further, but if you’re reading The Weekly Beat, you likely know all of this already.
The mainstream media, with very few exceptions, has largely abandoned its duty to investigate and report the truth. “Cowardly” hardly begins to describe the current state of journalism.
Meanwhile, Congress, led by Republicans, is failing to hold him accountable. The Supreme Court now has a 6–3 conservative majority, shaped by the so-called “felon-in-chief” with the assistance of “Moscow” Mitch McConnell.
It is truly up to us to stand firm—for truth, for justice, for democracy. We must find a balance between rest and action, and remember that we are the majority. The vast majority of Americans oppose his policies.
I urge each of you to focus on what we can do. We must put an end to this travesty. Please know that Voice for Values remains committed to providing steady, determined, and practical leadership for the long haul. Our Rural Revival Plan is on track to launch this July. Your financial support, especially recurring monthly contributions, will help us achieve meaningful results and steer this country back on course.
What we must not do is give up. We must stay strong, and take a clear-eyed look at what’s needed to protect the United States from the grip of a cruel, authoritarian, malignant narcissist. This is our task. Whatever happens, don’t give up. No matter what, do not give up.
For the future,
Judy
Main Story: A Big, Ugly, Disaster of a Budget Bill
By Amber Faith, Senior Advisor
This week, House Republicans advanced the “One Big Beautiful Bill Act” (OBBBA), thus kicking off yet another contentious budget battle between the House and Senate. Here’s a rundown of what’s in the bill:
It’s a budget reconciliation act, which fails to fund the government through the end of the fiscal year. Additional action will be needed before September 30th to keep the government funded.
The bill makes steep cuts to key services and programs, including $880 billion from Medicaid and $230 billion from SNAP. These are the largest cuts to the social safety net in American history and high cuts, which will result in low- and middle-income Americans losing services to the tune of $2.9 trillion over the next decade.
The bill includes extensions of the individual tax cuts, business tax cuts, and State and Local Tax Write-offs in the 2017 Tax Cuts and Jobs Act, of which the majority of the benefits will go to higher earners.
Experts contend that the bill will result in an exploded deficit, impacting the health and stability of the U.S. economy for years to come.
For the main story this week, we want to focus on the impacts the bill has on the deficit and why we should be concerned. Early projections show that the cuts made to government revenue by extending the Tax Cuts and Jobs Act (TCJA) will result in what experts are calling a “financial cliff” for the U.S., even when taking into consideration the cuts made to key services. The Committee for a Responsible Federal Budget estimates that the current bill will increase the deficit by $3.3 trillion between 2025 and 2034. This will only be achieved if the tax cuts in the bill expire in 2028 as planned. However, Trump has been pushing for the TCJA cuts to be made permanent. If this occurs without concurrent cuts to spending or new sources for revenue generation, the deficit is likely to balloon further to $4.8 trillion.
If your brain hurts from reading this so far, do not worry. You’re not alone. Here’s a picture of a cat.
Are you back? Good. Because we need to ask ourselves why this matters and how it affects us.
First, the exploded deficit is leaving Americans poorer on average. The Budget Lab at Yale University has estimated that the OBBBA’s additions to the deficit will result in higher interest costs across the board for auto, home, and business loans. Moreover, they estimate that average household spending power will decline by up to $1250 per household for every 1% of GDP added to the deficit. Currently, the deficit sits at about 6.3% of U.S. Gross Domestic Product (GDP). The Center for American Progress predicts that if the OBBBA is passed, the deficit will reach 125% of GDP by 2034 and 178% of GDP by 2055.
This brings us to our next point. The interest owed on the national debt takes away funding from public investment, and we, the taxpayers, are on the hook. Like any other form of debt, the higher the principal owed, the higher the interest charges. As it stands, the U.S. debt interest payments account for the second-highest line item in the total federal budget for the current fiscal year, amounting to an astounding $579 billion. Under current law, our interest costs are predicted to cost a total of $952 billion in 2025 and $13.8 trillion over the next decade. If the OBBBA is passed, this number would only continue to rise, potentially at an even higher rate. The United States just received its third credit rating downgrade in the last decade, which gives our creditors the pretext to charge even higher rates on the future borrowing needed to fund the OBBBA.
These high-interest payments take away from important investments such as infrastructure, public health, education, and more, which put money into the economy. Making matters worse, our declining credit rating discourages new investment in the U.S. economy, resulting in further stagnation of both wages and government revenue.
So, how do we fix this?
We need to completely restructure the federal budget by putting revenue-generating line items at the top of our priorities. Deficit spending can be a good thing in the right context. The best example of this was the New Deal, where at the height of the Depression, the U.S. government invested in massive public works programs, which generated financial stability for millions of workers across the U.S. as well as resulted in major advancements in technology, the arts, infrastructure, and more. Once the economy was back on track, the new revenue generated from the resulting wage growth ended up paying down the deficit. By 1945, the U.S. had a budget surplus.
Similar interventions are needed today to stave off economic collapse. Programs slated for cuts in the OBBBA are actually revenue generators that need to be protected and expanded. For example, every $1 we spend on Medicaid can put up to $1.80 back into the economy through the resulting improvements to public health and the jobs the program creates. In contrast, money spent on Trump’s mass deportations is anticipated to result in nearly $1.7 trillion in losses, about 6% of GDP.
Our Take
We need a common-sense approach to the budget. One that prioritizes spending on programs that generate economic activity, cuts programs that result in economic loss, and focuses tax relief on low-income folks who are the most likely to use that savings, generating economic activity. Until we do so, we will continue rapidly down a path where the U.S. economy may reach a point of no return.
This isn’t a problem that’s going to be solved overnight. A good start is scrapping the big, ugly, disaster of a budget bill that is headed to the Senate this week and starting over.
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