Latest news with #OneBigBeautifulBill
Forbes
11 hours ago
- Business
- Forbes
Reconciliation: How A Deficit Control Tool Adds Fuel To The Debt Fire
Much like the broader U.S. budget process, a legislative procedure currently being used to advance Republican policy priorities such as tax cuts and increased spending on border security has evolved to a point where it no longer serves its intended purpose. The One Big Beautiful Bill Act, now before Congress, is being considered using a budgetary tool known as reconciliation, which was designed to expedite passage of deficit-reducing measures. While the 1974 law establishing the procedure did not strictly limit the use of reconciliation to deficit reduction, the overarching goal of that legislation was to equip Congress with stronger tools to adopt responsible budgets. Unfortunately, the present application of reconciliation is threatening to do just the opposite, increasing the national debt by trillions over the next decade. The term 'reconciliation' refers to a unique component of the congressional budget process. While often contentious, current budgetary procedures once found success because elected officials were committed to adhering to statutory budget rules and possessed the political will to elevate governance and the country's fiscal well-being above other considerations. The budgetary surpluses achieved between 1998 and 2001 were, at least in part, a product of that more disciplined approach. Federal budgeting is designed to begin with the president submitting a funding request to Congress, followed in short order by the development of an intra-legislative branch budget resolution. Though lacking the force of law, this resolution serves as a fiscal blueprint guiding broad spending, revenue, and debt levels for the upcoming year. While not required, the resolution can include reconciliation instructions directing action from congressional committees responsible for mandatory programs and revenues. (Annual appropriations matters are typically considered separately.) Those committees are typically tasked with developing proposals to generate program savings or higher revenues for activities under their purview. Essentially, they are instructed to craft legislation that, if enacted, would reconcile spending and revenue levels with the budget resolution's targets. Once such legislative language is developed, a reconciliation bill is introduced and makes its way through the legislative process. Reconciliation measures benefit from expedited consideration, requiring a simple majority for passage, unlike the regular process which demands 60 votes to overcome a filibuster in the Senate. Reconciliation Process Congressional Research Service Given the relative ease of passing legislation through reconciliation, it has evolved to become an end-run around regular legislative order. Concern about how the procedures might be used dates back to the adoption of the Byrd Rule in 1985. That rule restricted the inclusion of 'extraneous' provisions—those lacking significant fiscal impact—in reconciliation bills. From its inception in 1974 until the end of the 20th century, reconciliation had been used to reduce deficits. While policy objectives such as welfare reform were accomplished using reconciliation, such legislation was expected to result in fiscal savings. That changed in the 21st century when reconciliation began to be used to expedite the passage of legislation that, while having fiscal impacts, would increase deficits. Prime examples include the tax cuts enacted through reconciliation in 2001 (though the intent then was to reduce forecast surpluses rather than increase deficits), 2003, and 2017, as well as the 2021 American Rescue Plan Act. The Inflation Reduction Act, enacted in 2022, was initially thought to be a deficit-reducing measure, though a growing body of research on the topic suggests the IRA could add to the deficit or at least generate smaller amounts of deficit reduction than expected. The evolution of reconciliation, from facilitating deficit reduction to making it easier to add to the national debt, has not followed a straight line. Congress has at times over the past 20 years tightened rules by prohibiting its use for measures that raise deficits and disallowing instructions that would increase net mandatory spending. For instance, the Conrad Rule, in effect from 2007 to 2015, sought to rein in the practice of worsening deficits through reconciliation and instead returned the procedure to its original purpose, deficit reduction. The abandonment of past constraints like the Conrad Rule has created a loophole, enabling legislators to use reconciliation to enact policies that could harm the nation's fiscal outlook, simply by demonstrating fiscal impact. Another indicator of how poorly the current budget process is faring at present is the fact that Congress is pursuing reconciliation legislation for the fiscal year that ends in four months. Reconciliation was designed to be completed before the fiscal year begins. Longer-term fiscal policies, however, are affected by the legislation making its consideration relevant for years beyond FY 2025. A key driver of the bill is a desire by some elected officials to extend certain tax reductions passed via reconciliation during the first Trump presidency, the Tax Cuts and Jobs Act of 2017. The Byrd Rule affected the content of TCJA because it does not allow reconciliation legislation to increase the deficit beyond a 10-year budget window. To comply with that requirement, key parts of the tax cut package are slated to expire at the end of 2025. Add to that a number oBudget f new Trump administration priorities, like additional tax cuts and more spending for border security and the military, coupled with an increasingly compelling need to extend the nation's debt limit, and one big bill results. Whether it's beautiful is in the eye of the beholder. Despite the built-in advantages of using reconciliation, some policymakers are also advocating a shift to a current policy baseline to assess the cost of the legislation. Arnold Ventures has made clear in several recent publications that such an approach hides the true fiscal impact on taxpayers and further undermines the U.S. fiscal position. In a previous post on I wrote about how the U.S. budget process is broken and requires considerable reform to put the nation on a sustainable fiscal path. Contrary to the intent of existing budgeting statutes like the law establishing reconciliation procedures, the legislative package now moving through Congress will cause the national debt to soar. And it will do so by leveraging a process designed to do just the opposite. Clearly, we need to rethink our broken budget process—manipulating reconciliation is hardly the only issue. Otherwise, we must reconcile ourselves to an ever-expanding national debt and the substantial risks accompanying that unstable fiscal state.
Axios
12 hours ago
- Business
- Axios
GOP tax chief says Trump bill will keep foreign nations "in check"
House Ways and Means chair Rep. Jason Smith (R-Mo.) said a measure in President Trump's proposed tax bill that takes aim at foreign investors is a way to keep other nations "in check." Why it matters: Wall Street is worried that a tax on foreign investment contained in the "One Big Beautiful Bill" could make overseas investors reluctant to buy U.S. assets — at a time they are already wary of U.S. policies. What they're saying: "A big concern is that foreign governments, based on agreements entered into by the Biden administration, is trying to suck away billions of dollars from U.S. companies," Smith told Axios' Neil Irwin at the Reagan National Economic Forum. "This is a way to help put them in check, so that they understand that if they do that to our businesses, there will be consequences for their actions. Hopefully it'll never take an effect," Smith said. Catch up quick: The provision, called Section 899, proposes increasing tax rates for foreign direct investment from countries with unfair tax policies, as judged by the Trump administration. So, for example, an overseas sovereign wealth fund that owns U.S. stocks and bonds could face a tax on the earnings on their investment. The fear is that such a levy turns off foreign investors at a crucial moment: there are concerns that the safe-haven status of U.S. assets is in question, which would make it more difficult to borrow. What to watch: Asked whether Smith was concerned about this possibility, the top tax lawmaker said discriminatory tax regimes were a risk to U.S. corporations. "We're the first country in 2017 that created a global minimum tax. They don't even accept our global minimum tax. That's completely unfair," Smith said. "We're being punished for actually following what they're trying to do," Smith added. The other side: "The measure risks detonating investor confidence and could set off a damaging pullback of foreign capital just as the US needs it most," said Nigel Green, CEO of deVere Group, a financial advisory and asset management firm.
Mint
16 hours ago
- Automotive
- Mint
Donald Trump-Elon Musk press conference LIVE: US President to hold first presser with Tesla boss after exit announcement
Donald Trump-Elon Musk press conference LIVE: United States President Donald Trump has said he will hold a press conference with outgoing DOGE (Department of Government Efficiency) leader Elon Musk on Friday at 1:30 pm EST. In a post on Truth Social, Trump said that Musk will be 'helping' the US government in the days to come. 'I am having a Press Conference tomorrow at 1:30 P.M. EST, with Elon Musk, at the Oval Office,' the US President said. 'This will be his last day, but not really, because he will, always, be with us, helping all the way. Elon is terrific! See you tomorrow at the White House," he added. In the past two weeks, Musk has sworn off future political donations and criticized Trump's signature tax-and-spending-cut proposal, the 'One Big Beautiful Bill.' On May 28, in a post on his social media site X, Elon Musk announced that he was stepping down from his White House role. The announcement came a day after Elon Musk, on May 27, criticised the price tag of Republicans' tax and budget legislation making its way through Congress. Since Musk's announcement of exit from his DOGE role, Tesla investors rejoiced, which sent the stock of the EV maker up by 2 per cent. Follow updates here: 30 May 2025, 07:06 PM IST The Donald Trump Elon Musk press conference is scheduled to begin at 1:30 pm EST, which is 11 pm IST. The press conference will be streamed live from the Oval Office of the White House. 30 May 2025, 07:06 PM IST In a post on Thursday on his social media platform Truth Social, Trump announced he will be holding a press conference from the White House, where Elon Musk would be present. 'This will be his last day, but not really, because he will, always, be with us, helping all the way. Elon is terrific,' he wrote.
Time of India
19 hours ago
- Business
- Time of India
He will always ...: Donald Trump breaks silence on Elon Musk leaving US administration
US President Donald Trump President Donald Trump lauded Elon Musk as "terrific" as the billionaire stepped down from his role as chief of the Department of Government Efficiency (DOGE) in the U.S. administration . Trump announced that he and Musk will hold a media briefing at 1:30 pm EST today in the Oval Office to mark Musk's final day, though he emphasized that Musk will "always be with us, helping all the way." In a post on Truth Social, Trump wrote, "I am having a Press Conference tomorrow at 1:30 pm EST with Elon Musk, at the Oval Office. This will be his last day, but not really, because he will, always, be with us. Elon is terrific! See you tomorrow at the White House." Musk's exit follows widespread protests and comes amid his recent criticism of Trump's flagship tax bill (One Big Beautiful Bill), which he called "too expensive" and a potential setback to his cost-cutting efforts at DOGE. "A bill can be big, or it can be beautiful. But I don't know if it can be both," Musk remarked earlier this week. Elon Musk's 'good bye' note In a statement, Musk expressed gratitude to Trump for the opportunity to lead DOGE, saying, "As my scheduled time as a Special Government Employee comes to an end, I would like to thank President Donald Trump for the opportunity to reduce wasteful spending. The DOGE mission will only strengthen over time as it becomes a way of life throughout the government." Musk, who was the largest donor to Trump's 2024 campaign and a prominent figure during the president's pre-election events, returned to corporate life this week, stating he is "spending 24/7 at work" and sleeping in conference rooms. During his tenure, Musk spearheaded efforts to streamline federal operations, cut waste, downsize staff, and eliminate several government departments under DOGE, a new initiative named after the Dogecoin cryptocurrency Musk has long championed. Trump, who hailed Musk as a "star" in his victory speech, appointed the SpaceX and Tesla CEO to lead DOGE shortly after taking office, tasking him with reducing government bureaucracy. As Musk departs, his influence on the administration's efficiency drive is expected to persist, with the White House signaling his continued advisory role. The press conference today is anticipated to shed light on Musk's contributions and the future of DOGE under Trump's leadership. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
20 hours ago
- Business
- Time of India
Stephen Miller's wife Katie Miller is following Elon Musk 'full time', hours after his tweet directed at Tesla CEO's criticism of Trump Bill said: You cannot ...
Stephen Miller 's wife Katie Miller , spokeswoman for the Department of Government Efficiency ( DOGE ), is leaving the White House to work full-time for . The development comes after Musk's official departure from his advisory role in the Trump administration. Tired of too many ads? go ad free now Notably, Katie shared an X post, quoting Musk's previous quote: 'DOGE is a way of life, like Buddhism'. Musk criticizes 'One Big Beautiful Bill' The Tesla and CEO recently said that he was 'disappointed' with the 'One Big Beautiful Bill', claiming it contradicted the budget-cutting goals he pursued during his tenure with DOGE i.e. Department of Government Efficiency. Katie's husband and senior Trump aide Stephen Miller, critically responded to Musk's recent remarks. 'I think a bill can be big or it can be beautiful, but I don't know if it can be both,' he said. 'My personal opinion.' Stephen Miller counters Musk's criticism Shortly after Musk's comments about the bill, Stephen Miller took to X (formerly Twitter) to clarify the limitations of the budget bill. 'Under senate budget rules, you cannot cut discretionary spending (only mandatory) in a reconciliation bill,' Miller wrote. 'So DOGE cuts would have to be done through what is known as a rescissions package or an appropriations bill,' he added. He further stated that the bill 'does not fund the departments of government' nor finance federal agencies, pushing back against Musk's claim that it undermined DOGE's mission. Katie Miller heads to Tesla-SpaceX world Katie Miller, who previously served as a Special Government Employee — a temporary designation for private-sector professionals working in government — is expected to take on a new role with Musk, possibly involving his media relations for Tesla and SpaceX, according to CNN. Tired of too many ads? go ad free now Her departure comes as Musk phases out of political involvement and refocuses on his companies. 'I think I probably did spend a bit too much time on politics,' Musk said in a recent interview with Ars Technica. Elon Musk exits DOGE Musk officially resigned from his post leading DOGE yesterday. In a post on X, he announced 'As my scheduled time as a Special Government Employee comes to an end, I would like to thank President Trump for the opportunity to reduce wasteful spending'. 'The DOGE mission will only strengthen over time as it becomes a way of life throughout the government,' he added.
