Congress

Megabill debt warnings fall on deaf ears inside the GOP

Published

1 week ago

June 18, 2025

Senate Republicans are fielding mounting warnings from economists that their signature legislation would add trillions of dollars to the deficit. It appears to be the last thing on their minds.

As Senate Majority Leader John Thune prepares to jam through the GOP’s sprawling border, energy and tax package to President Donald Trump’s desk, fellow Republicans are largely ignoring a host of reports warning that their bill would worsen the nation’s fiscal trajectory in a serious way.

They’re instead relying on estimates from the White House that assume vastly greater economic growth than virtually every other economic model — while trashing the credibility of Congress’ nonpartisan budget scorer, the Congressional Budget Office, which said on Tuesday that the House-passed border, energy and tax bill would add around $2.8 trillion to the deficit over a decade.

“It’s a model. And obviously, they’ve been famously wrong before,” said Sen. Kevin Cramer (R-N.D.) of the latest CBO report. “We do have more debt now than we had before, for sure, but I think they grossly underestimate the economic benefits.”

The problem highlighted by CBO and other economists is this: While the GOP’s tax cuts may provide some economic growth, they will likely not juice the economy as much as when Republicans first enacted Trump’s tax cuts in 2017. On the flip side, with federal debt closing in on $37 trillion, the rising costs of servicing more expensive interest payments will far outweigh any additional revenue that is generated from increased economic growth.

“The economic and fiscal state is not what it was in 2017,” said Paul Winfree, president and CEO of the Economic Policy Innovation Center, who was previously a top economic official in the first Trump administration. Winfree added in a text message that “the stock of debt is so large that anything we do to modestly increase productivity (and growth) without reducing spending … will lead to higher costs.”

That was underscored Tuesday when CBO put a number this week to the warning economists have been making for months: that the GOP package would hike interest rates and in turn increase borrowing costs.

Higher interest rates would boost payments on the national debt by an estimated $440 billion over a decade, CBO predicted, while the megabill would drive yearly economic growth of just 0.5 percent on average during that time. House Republican leaders are claiming the bill would generate $2.5 trillion by banking on total average growth of 2.6 percent.

That finding prompted an unusual phenomenon. Usually tax-cutting bills tend to cost less under so-called “dynamic” scores that include economic effects. Not so here: The $2.8 trillion figure released Tuesday outstripped the CBO’s prior $2.4 trillion estimate that did not include economic analysis — mostly attributable to the fact that, in their words, the bill “would increase interest rates.”

Lack of recognition of the dynamic has upset at least one Republican, Sen. Ron Johnson of Wisconsin, who dropped his own report Wednesday illustrating that the GOP’s megabill has little shot of bending the deficit trajectory downward, even in the rosiest of economic circumstances.

Johnson, who said he will vote against the massive tax and spending package as it’s currently written, is challenging his colleagues in the Senate and in the administration to show him where he’s wrong.

“The whole point of laying out the report was to get everyone to acknowledge and admit reality,” Johnson told reporters. “Nobody’s pushed back on my numbers. Here’s an opportunity to do it. … I’ve shown people my work. Who else has shown people work?”

But Thune took to the Senate floor on Wednesday to argue that the party-line megabill would generate enough revenue — around $4.1 trillion — through economic growth to completely make up for the deficit impact from the reduced revenue, citing a report from the White House’s Council for Economic Advisors that asserts the bill would lead to long-run GDP growth of up to 3.5 percent.

Thune added that CBO “characteristically, I should say, underestimates the economic growth, and hence the revenue, that this bill would provide.”

The White House figures are outliers compared with other economic models. The conservative-leaning Tax Foundation found, for instance, that the GOP’s plan would boost economic growth by 0.8 percent in the long-run but still, on a dynamic basis and after $1.5 trillion in net spending cuts, add $1.7 trillion to the deficit over 10 years.

The Penn Wharton Budget Model estimates that the bill would spur economic growth of 0.4 percent over 10 years and add $3.2 trillion to the deficit over a decade, all things considered.

Kyle Pomerleau of the American Enterprise Institute called the White House estimates “outrageous” and “way higher than everyone else’s.” He said the in-house analysis takes into account tax incentives, like those for domestic manufacturing, that didn’t end up in the bill that passed the House in May.

“They just say that, ‘well, the individual income tax — that’s going to make people work more and that’s it,’” he said. “But it misses so many different details of the actual reform itself.”

Democrats say voters will notice if the GOP package becomes a drag on the economy rather than the boon Republicans are marketing. Reiterating a claim party leaders often voice, Sen. Chris Murphy (D-Conn.) said the 2017 tax bill “ended up being a stone” around Republicans’ neck “that helped lead to their bloodletting” in the 2018 midterms.

“At some point they have to look at all this new information and decide to stop and go back to the drawing board,” Murphy said in a brief interview. “Because what they’re designing is not going to help our economy and is going to hurt a ton of people.”

The release of the CBO report comes as Senate Finance Chair Mike Crapo (R-Idaho) fields requests from several of his GOP colleagues to scale back changes to taxes that fund Medicaid and cuts to green energy credits. Crapo has been also pushing to use an accounting maneuver known as a current policy baseline, which would effectively zero out the cost of around $3.8 trillion in tax cut extensions.

It would allow Senate Republicans to make Trump’s tax cuts permanent without having to offset much of their deficit impact, which would otherwise be required by the Senate’s budget rules.

Asked for his reaction to the new CBO report, Crapo said he has “the same reaction I’ve always had” to the official scorekeeper’s numbers: “They’re not using the right baseline, and they aren’t analyzing it dynamically.”

Jordain Carney, Jennifer Scholtes and Katherine Tully-McManus contributed to this report.

Congress

How the megabill could fall apart

Published

34 minutes ago

June 28, 2025

Blue Light Newsroom

Republican leaders are expecting to finish up their domestic-policy megabill the same way they’ve advanced it this far: by tweaking their plans for President Donald Trump’s legislative agenda and daring holdouts to vote against it.

It might work, and GOP leaders are projecting confidence that the bill will land on Trump’s desk in time to meet their arbitrary July 4 target. Senate Majority Leader John Thune said Friday he expects his chamber to start voting as soon as Saturday.

But there are reasons the deadline could slip, and several of them were on display this week as Republicans dug in for the final scramble of negotiations.

For one, members continue to fight jealously to keep personal priorities in the bill — including parts of a $4 trillion package of tax cuts set to affect virtually the entire U.S. economy. Meanwhile, other lawmakers who have made the megabill into an ideological litmus test on federal spending and budget deficits are facing a put-up-or-shut-up moment after repeatedly drawing red lines and then moving forward with the legislation anyway.

Finally, a handful of key lawmakers are facing what could be existential political stakes as they brace for tough re-election contests in next year’s midterms. Many are balking at having to vote on cutbacks to safety-net programs, clean-energy projects and other federal assistance their states and constituents rely on.

Together, it’s turned the megabill’s endgame into a high-wire act — and Thune is keeping the pressure on, expecting his members will want to stay on the rope.

“We’ve cussed it. We’ve discussed it,” Sen. John Kennedy (R-La.) said Friday. “But we’re gradually going from thoughtful, rational deliberation into the foothills of jackassery. I mean, we’re talking about the same thing over and over and over.”

Thune, along with Trump and Speaker Mike Johnson, have all calculated that allowing more debate will only work against them. They’ve already used the threat of a federal default later this summer to move the process along — the bill includes a debt-ceiling increase — but the Independence Day deadline has emerged as a tantalizing symbolic target.

Problem is, with groups of members digging in, the state of the negotiations isn’t necessarily jibing with that timeline. Thune wouldn’t say Friday whether he had the votes to even start debate: “We’ll find out.”

Among the biggest problems for Thune going into Saturday are four GOP fiscal hawks: Sen. Rand Paul of Kentucky is an all-but-guaranteed “no” vote, while Sens. Mike Lee of Utah, Ron Johnson of Wisconsin and Rick Scott of Florida are each in close touch with Trump and pledging to act in unison.

All of them have made dire warnings about the state of the nation’s finances, and they have pushed for much deeper spending cuts than what has been on offer. They have also been coordinating with members of the House Freedom Caucus, the hard-right group that has made similar fiscal demands.

Every Freedom Caucus member save for Rep. Andy Harris (R-Md.), its chair, has voted to advance the megabill. But they’ve been strategizing about how to bend the legislation in their direction and trying to warn they will vote against the Senate bill if it moves too far in the other direction.

Rep. Eric Burlison of Missouri, one of 30 House Republicans who warned senators to abide by the House bill’s fiscal framework, said Friday he remained in a dug-in “no” vote on the Senate bill. He said he was even more adamant about his position given the Senate parliamentarian had effectively vetoed a provision he secured that would make it easier to obtain rifles and silencers.

“They just need to understand that if they don’t meet that and they send us back something that blows up the deficit, it’s not going to pass — period,” Burlison said. “And we mean it.”

Texas Rep. Chip Roy, a ringleader of the fiscal conservatives, told reporters Friday there’s a “good number” of ”no” votes among Republicans in the House, “and I think the Senate knows that.”

“I can’t go back to my people and say we increased the deficit a trillion dollars,” he said.

White House officials have ratcheted up their efforts to win over the holdouts. Deputy chief of staff Stephen Miller has been calling Freedom Caucus members this week to hear out their concerns. So far, he’s largely been in “listening mode,” according to two Republicans granted anonymity to discuss the private conversations.

Trump himself is “more fielding calls than making them” at this point, according to a senior White House official granted anonymity to describe the president’s lobbying. He met Thursday with Johnson and Thune, and the official said the individual whipping of members would begin soon enough.

The message will be simple, the person said: “You can vote to end your career or not.”

That’s exactly what’s on the minds of several in-cycle senators, except they fear it’s a yes vote that could cost them re-election next year.

Sen. Thom Tillis of North Carolina openly warned his colleagues this week he will lose his reelection bid if they move forward with Medicaid provisions as currently drafted — in particular a curtailing of medical provider taxes, the mechanism the vast majority of states use to finance their Medicaid programs.

“Trust me when I tell you, my Republican colleagues and leadership of the legislature are not going to raise taxes to fill the gap, and even if they could, the number is too high,” Tillis said Friday, emphasizing he would not vote to start debate on the bill until the matter is addressed.

Sens. Bill Cassidy of Louisiana and Susan Collins of Maine, who are up for re-election next year, and Sen. Lisa Murkowski of Alaska, who is up in 2028, are also closely following the Medicaid language. Leaders have so far offered a $15 billion fund to offset the provider tax changes and protect vulnerable hospitals, but Collins is pushing for $100 billion.

They have taken heart from reports that Trump is sympathetic to their position and would prefer the Senate retreat to the less drastic House provider tax proposal. But GOP leaders are intent on preserving the hundreds of billions of dollars in savings attached to the provision — in part to preserve a trio of permanent business tax breaks backed by key members of the Senate Finance Committee.

They’re also facing a crunch from the small but vocal group of blue-state House Republicans pushing for a larger state-and-local-tax deduction. Their demands could add another $350 billion in cost to the Senate bill, though there is a tentative deal to cut that figure in half.

After meeting with Trump Thursday, Thune said he believes the president has no strong attachment to the Medicaid provision and just wants whatever bill can get to his desk. He’s privately told Senate Republicans that he believes the House will take up and pass whatever the Senate sends over.

In other words, even if Thune’s gamble succeeds on his side of the Capitol, Johnson might soon be throwing the dice himself.

“Mike is nervous as a pregnant nun right now — he doesn’t know if he can get what we’re doing past his House,” Kennedy said. “He wanted us understandably not to touch a thing in the House bill — that wasn’t going to happen in this lifetime.”

Dasha Burns, Cassandra Dumay and David Lim contributed to this report.

Congress

Key GOP centrist Rep. Don Bacon will not seek reelection

Published

14 hours ago

June 28, 2025

Blue Light Newsroom

Rep. Don Bacon will not seek reelection and plans to retire at the end of his term, according to two people familiar with his plans. The announcement is expected Monday.

Bacon is a key GOP centrist in the House and represents one of only three Republican-held districts that Kamala Harris won in the 2024 presidential election.

Congress

Rep. Dusty Johnson to announce a bid for South Dakota governor Monday

Published

16 hours ago

June 27, 2025

Blue Light Newsroom

Rep. Dusty Johnson will announce a bid for South Dakota governor Monday, according to two people granted anonymity to speak about private conversations.

Johnson has served as South Dakota’s sole House representative since 2019. He’s been a key player in major deals on Capitol Hill in recent years as the head of the Main Street Caucus of Republicans.

Johnson, long expected to mount a bid for higher office, will make the announcement in Sioux Falls.

Johnson is the eighth House Republican to announce a run for higher office in 2026. Reps. Andy Biggs of Arizona, Byron Donalds of Florida, Randy Feenstra of Iowa, John James of Michigan and John Rose of Tennessee are also seeking governor’s offices; Reps. Andy Barr of Kentucky and Buddy Carter of Georgia have announced Senate runs.