What’s in the “Big Beautiful Bill”? In late May 2025 House Republicans pushed through a massive tax-and-spending reconciliation package nicknamed the “One Big Beautiful Bill Act,” President Trump’s signature domestic priority. The plan would extend and add to the 2017 Trump tax cuts – for example keeping lower individual income tax rates in place beyond their original expiration – while stepping up spending on the military and border security. CBO scored the House version as adding roughly $2.4 trillion to federal deficits over the decade. (Other estimates, including interest costs, put the long-run budgetary cost even higher – around $3–5 trillion.) In brief, the Republican bill pairs deep tax cuts with targeted spending increases, partially offset by entitlement cuts that cover only a fraction of the cost.

I. Inside “The Big Beautiful Bill”

The key provisions include:

• New and Extended Tax Cuts: The bill continues nearly all of the 2017 Tax Cuts and Jobs Act (TCJA) breaks for individuals and businesses, preventing automatic rate hikes on about 62% of taxpayers. It also adds some new giveaways: for example, Trump campaigned on an expanded tax break for tips, which is in the bill. Overall, CBO expects roughly $3.7–4.1 trillion in revenue loss from these tax provisions over ten years (Tax Foundation’s estimate is $4.1T conventional, $3.2T dynamic).
• Big Defense and Border Spending: Republicans have pledged substantial hikes in military outlays and tighter border/security funding. As Reuters notes, the bill “extends Trump’s 2017 tax cuts and steps up spending for the military and border security”. (The precise amount of new defense funding is not fully public yet, but House leaders insist on beefing up veterans, missile defense, and border walls.)
• Offsetting Cuts to Welfare Programs: To meet budget rules, the package trims funding for Medicaid and food assistance (SNAP). For example, new work requirements for nondisabled adults would cut Medicaid enrollment, and tighter SNAP rules would pare food stamp rolls. CBO estimates $1.25–1.3 trillion in spending reductions from these provisions over ten years. (Sen. Hawley and others have criticized some of these cuts as draconian, but Republicans argue they are “waste, fraud, and abuse” eliminations.)
• Debt Ceiling Increase: Crucially, the bill also contains a suspension or increase of the debt ceiling. In other words, Congress must raise the borrowing limit as part of the deal to avoid default later this summer. This ensures Treasury can finance the additional deficits the bill creates.

Taken together, these elements spell a sharp shift in fiscal policy. On a conventional basis, the Tax Foundation finds the package would raise the 10-year deficit by about $2.6 trillion (with $4.1T in tax cuts vs ~$1.5T in spending cuts). Even accounting for economic feedback (“dynamic” effects), the deficit rises by roughly $1.7T over 10 years. CBO and other forecasters warn that by 2034 some 10.9 million more Americans would be uninsured due to the Medicaid changes, and about 4 million fewer people would receive food stamps. The debt burden soars as well: Tax Foundation projects the debt/GDP ratio climbing from about 162% (baseline) to 172% by 2059 (conventional accounting). In short, this is Reagan-on-steroids: massive tax cuts plus big spending, with deficits exploding into the stratosphere.

II. Elon Musk Breaks Ranks

The startling twist is that Republicans’ own star donor has broken ranks. In early June, billionaire Elon Musk – Trump’s former “Doge” efficiency czar and the largest Republican donor in 2024 – delivered a blistering critique of the bill on social media. Musk called the measure a “massive, outrageous, pork-filled congressional spending bill [that] is a disgusting abomination.”. On X (Twitter), he warned that blindly slashing taxes would put “America… in the fast lane to debt slavery,” and urged followers to pressure lawmakers: “Bankrupting America is NOT ok! KILL the BILL.”. In other words, Musk has branded GOP deficit expansion as an existential fiscal threat.

Musk’s attack blindsided Republican leaders. Speaker Mike Johnson privately phoned Musk “to do damage control,” calling him “my friend Elon” even as he publicly insisted Musk was “terribly wrong” about the plan. White House aides fumed that Musk’s tweets were “infuriating” interference. And party moderates and elders reacted with equal shock. Senate Majority Leader John Thune (R-S.D.) met with Trump and pledged to “get this done… one way or another” – effectively telling Musk that paying down debt wouldn’t stop the bill. Nebraska’s Kevin Cramer shrugged off Musk as a loudmouth: “It’s amusing,” he said, “but we have to deal with reality”.

Nonetheless, Musk’s influence is real. His walkout from the Trump transition (after promising $2 trillion in cuts but achieving little) means he’s free to employ his vast platform and campaign network purely as a political player. Already he has hinted at using his multi-million-dollar war chest to support primary challenges against Republicans who vote for the bill. Sen. Rand Paul has since echoed Musk’s deficit warnings, tweeting that adding $5 trillion in debt would be “a huge mistake.” Even fiscal hawks like Ted Cruz (R-TX) and Mike Lee (R-UT) have privately murmured that the package needs more spending cuts. In short, Musk has inserted himself between GOP donors and lawmakers, testing whether money (and Musk’s populist brand) can bend Republican policy on taxes and spending.

• GOP Reactions: Party leaders scrambled to contain the damage. Speaker Johnson was caught between grateful donor and mutinous activist – “I hope he comes around,” Johnson said – but publicly dismissed Musk as wrong. White House officials (speaking anonymously) scolded Musk for causing “one disagreement” in an otherwise “harmonious” alliance with Trump. Thune and other Trump loyalists doubled down on the agenda.
• Donor and Donor Politics: Musk’s status looms large. He had funneled nearly $300 million to pro-Trump and GOP campaigns last cycle, making him the party’s top financier. Now he’s flexing that muscle to reshape the debate. Traditional mega-donors (Koch network, energy magnates, etc.) have quietly pulled back, uneasy with Trump’s scorched-earth tactics. That vacuum gives Musk outsize clout: a single tweet from him can send a health-stock plummeting or move a senator. In effect, he’s testing whether a post-2020 GOP, newly frenzied by populist debt-concern, can be swayed by one man’s populist, anti-deficit crusade.

III. From Reagan to Trump and The End of Fiscal Conservatism

The internal feud over the bill reflects a long-running tension in Republican ideology: the clash between orthodox deficit hawks and the party’s newer economic nationalists. We’ve seen these skirmishes before at every major GOP inflection point.

• 1980s Reagan Era: President Reagan’s signature policy was sweeping tax cuts, which were hailed as growth engines. In practice, they “were huge” but “didn’t pay for themselves,” according to economist David Wessel. Reagan cut the top rate from 70% to 50%, slashing revenues by roughly 9%. The administration had hoped offsetting spending cuts would balance the budget, but those cuts “never materialized”. Instead, deficits exploded, forcing Reagan himself to sign multiple tax increases (1982–84) to stem the fiscal bleeding. In short, Reagan’s ideological victory for tax cuts came at the price of much higher debt – a lesson often forgotten by modern supply-siders.
• Tea Party and the 2010s: In 2010, the Tea Party insurgents surged into Congress on promises of crushing deficits with austerity. But as AP noted, by the mid-2010s GOP leaders had “returned to their Ronald Reagan-era roots – tax cuts first, followed by vague promises of cutting spending down the road.” In effect, the Tea Party era became “dessert first, vegetables later” politics. The 2011 debt-ceiling crisis did force some across-the-board cuts (sequestration), but those have largely unraveled. Plans to trim Medicare, Medicaid or entitlement growth were shelved. As budget analyst Brian Riedl observes, once the tax-cut train departs, “it’s real hard to turn around and tell people you have to cut spending” later. Thus the GOP’s fiscal stalwarts found themselves sidelined while the party reapplied tax-cut solutions at every chance.
• Trump’s 2017 Tax Overhaul: The last major GOP tax package was Donald Trump’s 2017 Tax Cuts and Jobs Act, and the debates were déjà vu. Republicans knew those cuts – about $1.5 trillion over a decade – would swell the deficit. They claimed growth would compensate; but even Speaker Paul Ryan admitted that “even if we get the kind of growth we hope… you still have to reform entitlements”. Indeed, Democratic Rep. Mark Sanford warned the 2017 cuts were the “nail in the coffin” of any serious attempt at entitlement reform. In practice, the GOP delivered the tax cuts first. Only after the rush to sign the bill did they promise spending cuts. By election year 2018 the will for those cuts had faded – history had repeated, and Washington was again running trillion-dollar deficits.

In each episode, the cycle is similar: Republicans campaign as fiscal patriots, enact dramatic tax cuts (and some spending increases to please base constituencies), and saddle future Congresses with big deficits. Enthusiasts promise growth and future belt-tightening; critics point out that the debt load escalates relentlessly. The new “Big Beautiful Bill” follows the same script, but with ironic twists – now even Trump’s richest backer is sounding the deficit alarm.

IV. Debt Without Discipline

The immediate consequence of the bill is clear: federal debt will surge. By CBO’s accounting, the US owed about $36.2 trillion before this package. Adding another ~$2.4–2.6T in deficits over ten years will drive that total even higher – well beyond anything the nation has seen. CBO projects the debt-to-GDP ratio, already sky-high, rising from roughly 162% of GDP (baseline) to about 172% by 2059. In tangible terms, Americans face more uninsured, shrivelled social programs, and mounting interest payments crowding out other priorities.

Even amid this, Republican leaders have shifted the meaning of fiscal discipline to suit their aims. Many are content to defer hard choices to the future. Senate Minority Whip John Thune defiantly declared the CBO numbers “flat wrong,” blaming high inflation (which roared under the Biden administration) for not fully revealing the tax base. Speaker Johnson echoed that tax cuts would pay for themselves “one way or another,” vowing to push the bill past critics. Others simply attacked the messenger: Sen. Ron Johnson of Wisconsin scoffed that fretting over CBO’s math is like “arguing over twigs and leaves when you’re ignoring the forest that’s on fire” – in other words, everyone should focus on cutting spending (his favorite theme) rather than debating scores.

On Capitol Hill, fiscal hawks still speak up. Sen. Rick Scott (R-FL) flatly warned, “We’re at $2 trillion in deficits… we’re not going to get interest rates down or inflation under control if we don’t balance the budget”. Conservative economists like Brian Riedl have long urged the GOP to close the yawning gap, noting that the math is unforgiving unless programs are reined in. But these voices now compete with populist ones that celebrate large spending on patriotic priorities and dismiss tax hikes of any kind. In this environment, “fiscal responsibility” for many Republicans means demanding waste-cutting in entitlement programs (often coded as “welfare”) while continuing business as usual on tax cuts and defense spending. The debt ceiling fight was itself instructive: Congress is effectively forced to raise the limit without debate, normalizing ever-higher borrowing so long as it claims to champion “America First” policies.

V. Beyond Austerity and Denial

As an observer from abroad, I watch these American debates with a mix of fascination and alarm. The politics of debt and deficit are universal, but the American way – slashing taxes, hiking guns-and-butter spending, and then pretending fiscal discipline is being served – seems particularly reckless. How might the U.S. escape this cycle? History suggests that balanced, value-driven reforms – not knee-jerk austerity – are the way forward. Here are a few pragmatic ideas that a thoughtful government might consider:

• Invest in Growth and Innovation: The most fiscally responsible path isn’t always cutting everything down. Strategic investments in education, research and development, and clean energy can boost long-term growth and thus revenues. For instance, funding jobs and infrastructure projects today (think Green New Deal-style transition to renewables or high-speed rail) may cost money now but yield higher GDP later. A debt-financed investment that raises productivity can “pay for itself” over time. In this vein, Congress could consider bond-funded initiatives for broadband, semiconductor manufacturing, or carbon capture – aligning with national values like scientific leadership and climate stewardship. These proposals must be subject to rigorous ROI analysis, but the principle is: don’t shy away from spending, if it is the right spending that grows the pie for everyone.
• Fair, Comprehensive Tax Reform: Rather than endless temporary cuts favoring the wealthy, the U.S. needs a tax code that is broad and fair. That could mean rolling back some of the more egregious loopholes and deductions, especially those that benefit corporations and high earners, while simplifying the system. Ideas often floated include taxing all capital gains at the same rate as labor income, or imposing a modest wealth tax, or at least a higher estate tax on the very richest estates. Importantly, new revenues should not come from regressive sources (so stick by the promise not to hit the middle class harder). A bipartisan approach might raise the corporate rate slightly (closer to OECD norms) in exchange for eliminating distortionary subsidies. In short, make the tax cuts permanent for main street but claw back giveaways to offshore tax shelters. A philosophy of “each according to means” – a shared national-interest tax ethic – could help mend the social contract.
• Incremental Entitlement Reform with Protections: Long-term entitlement costs (Medicare, Medicaid, Social Security) are a genuine driver of debt. But blunt cuts to these programs breed political blowback and human hardship. An ethically grounded approach would reform entitlements gradually and protect the most vulnerable. For example, slowly raising the retirement age or the income threshold for premium support (as was discussed in past bipartisan plans) could trim future outlays without upending current retirees. Introducing more means-testing (while safeguarding poverty-level recipients) or premium-support competitive health care models could also contain costs. The key is transparent, respectful debate: a Mountain of Debt requires smart myth-busting and reality-checking, not ideological point-scoring. Republicans could fulfill their promise by negotiating real reforms that acknowledge fiscal limits, rather than kicking the can down the road.
• Curb Waste, Fraud and Subsidy Overkill: The government budget bloats with well-intentioned but inefficient programs. This is where fiscal conservatives and progressives can agree: eliminate duplication, demand audit reports, and trim outdated grants. For example, dozens of overlapping federal workforce or housing subsidies could be merged or sunsetted. Military procurement should be made more efficient (no more indefinite overruns on jets and ships). Indeed, if Elon Musk’s gripe is “government waste,” Republicans ought to hold hearings on it – but they should apply the same zeal to Pentagon and farm subsidies as to SNAP. In short, squeeze every ounce of efficiency out of existing spending before imposing pain on vulnerable people or boosting debt.
• Institutional Fiscal Rules: One lesson from abroad (and from U.S. history) is that rigid fiscal rules can help. The U.S. could consider something like a constitutional or statutory debt brake, requiring balance within a fixed horizon or tying major tax changes to offsets. For example, any new tax cut or spending hike might need a supermajority vote, or must be paired with concrete cuts elsewhere. Some have proposed an independent fiscal council to advise Congress. These ideas are tricky politically, but reflect an approach that neither party has championed here: sharing responsibility for the debt across ideological lines. It is arguably more “American” than promises of eternal austerity or permanent tax cuts.

None of these suggestions are sexy campaign slogans – they require compromise, persistence, and public buy-in. But austerity (across-the-board cuts to everyone’s favorite programs) is a cliché that doesn’t work politically or economically: Europe’s experience after 2008 shows that indiscriminate cuts can choke off recovery. Instead, the U.S. could craft a values-driven fiscal strategy: one that honors the social safety net (reflecting American decency) while insisting the wealthy and institutions pay their fair share. It would weigh future generations’ well-being alongside today’s ambitions. Republicans proud of Reagan’s and Lincoln’s legacies might recall that those leaders often faced crises by investing and reforming, not purely slashing.

From abroad, it seems clear that climbing out of the world’s largest national debt will take more than political posturing. It will take an honest accounting of priorities, sacrifices on all sides, and a willingness to break the stale cycle of tax-hike promises vs. deficit denial. A thoughtful, non-austere roadmap might combine smart cuts to low-value spending, prudent revenue increases on those most able to pay, and economic growth strategies – all undergirded by the constitutional principle that promises (including debt promises) must be kept. In other words, borrow wisely, spend on what brings value, and pay as you go when the good times roll. History teaches that such balanced approaches, though painful, ultimately secure the blessings of prosperity for the whole country – the very goal that both parties claim to pursue.

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Bibliography

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