Latest news with #ThomasMassie
CNBC
8 hours ago
- Business
- CNBC
'Fantasy math' masks tax bill's U.S. debt impact, GOP lawmaker said. What the deficit means for your money
The massive package of tax cuts House Republicans passed in May is expected to increase the U.S. debt by trillions of dollars — a sum that threatens to torpedo the legislation as the Senate starts to consider it this week. The Committee for a Responsible Federal Budget estimates the bill, as written, would add about $3.1 trillion to the national debt over a decade with interest, to a total $53 trillion. The Penn Wharton Budget Model estimates a higher tally: $3.8 trillion, including interest and economic effects. Rep. Thomas Massie of Kentucky was one of two Republicans to vote against the House measure, calling it a "debt bomb ticking" and noting that it "dramatically increases deficits in the near term." "Congress can do funny math — fantasy math — if it wants," Massie said on the House floor on May 22. "But bond investors don't." A handful of Republican Senators have also voiced concern about the bill's potential addition to the U.S. debt load and other aspects of the legislation. "The math doesn't really add up," Sen. Rand Paul, R-Kentucky, said Sunday on CBS. The legislation comes as interest payments on U.S. debt have surpassed national spending on defense and represent the second-largest outlay behind Social Security. Federal debt as a percentage of gross domestic product, a measure of U.S. economic output, is already at an all-time high. The notion of rising national debt may seem unimportant for the average person, but it can have a significant impact on household finances, economists said. "I don't think most consumers think about it at all," said Tim Quinlan, senior economist at Wells Fargo Economics. "They think, 'It doesn't really impact me.' But I think the truth is, it absolutely does." A much higher U.S. debt burden would likely cause consumers to "pay a lot more" to finance homes, cars and other common purchases, said Mark Zandi, chief economist at Moody's. "That's the key link back to us as consumers, businesspeople and investors: The prospect that all this borrowing, the rising debt load, mean higher interest rates," he said. The House legislation cuts taxes for households by about $4 trillion, most of which accrue for the wealthy. The bill offsets some of those tax cuts by slashing spending for safety-net programs like Medicaid and food assistance for lower earners. Some Republicans and White House officials argue President Trump's tariff policies would offset a big chunk of the tax cuts. But economists say tariffs are an unreliable revenue generator — because a future president can undo them, and courts may take them off the books. Ultimately, higher interest rates for consumers ties to perceptions of U.S. debt loads and their effect on U.S. Treasury bonds. Common forms of consumer borrowing like mortgages and auto loans are priced based on yields for U.S. Treasury bonds, particularly the 10-year Treasury. Yields (i.e., interest rates) for long-term Treasury bonds are largely dictated by market forces. They rise and fall based on supply and demand from investors. The U.S. relies on Treasury bonds to fund its operations. The government must borrow, since it doesn't take in enough annual tax revenue to pay its bills, what's known as an annual "budget deficit." It pays back Treasury investors with interest. More from Personal Finance:How GOP tax bill could change in the Senate3 key moves to consider while Fed keeps rates higherTrump administration axes barrier for crypto in 401(k) plans If the Republican bill — called the "One Big Beautiful Bill Act" — were to raise the U.S. debt and deficit by trillions of dollars, it would likely spook investors and Treasury demand may fall, economists said. Investors would likely demand a higher interest rate to compensate for the additional risk that the U.S. government may not pay its debt obligations in a timely way down the road, economists said. Interest rates priced to the 10-year Treasury "also have to go up because of the higher risk being taken," said Philip Chao, chief investment officer and certified financial planner at Experiential Wealth based in Cabin John, Maryland. Moody's cut the U.S.' sovereign credit rating in May, citing the increasing burden of the federal budget deficit and signaling a bigger credit risk for investors. Bond yields spiked on the news. Zandi cited a general rule of thumb to illustrate what a higher debt burden could mean for consumers: The 10-year Treasury yield rises about 0.02 percentage points for each 1-point increase in the debt-to-GDP ratio, he said. For example, if the ratio were to rise from 100% (roughly where it is now) to 130%, the 10-year Treasury yield would increase about 0.6 percentage points, Zandi said. That would push the yield to more than 5% relative to current levels of around 4.5%, he said. "It's a big deal," Zandi said. A fixed 30-year mortgage would rise from almost 7% to roughly 7.6%, all else equal — likely putting homeownership further "out of reach," especially for many potential first-time buyers, he said. The debt-to-GDP ratio would swell from about 101% at the end of 2025 to an estimated 148% through 2034 under the as-written House legislation, said Kent Smetters, an economist and faculty director for the Penn Wharton Budget Model. It's not just consumer borrowers: Certain investors would also stand to lose, experts said. When Treasury yields rise, prices fall for current bondholders. Their current Treasury bonds become less valuable, weighing on investment portfolios. "If the market interest rate has gone up, your bond has depreciated," Chao said. "Your net worth has gone down." The market for long-term Treasury bonds has been more volatile amid investor jitters, leading some experts to recommend shorter-term bonds. On the flip side, those buying new bonds may be happy because they can earn a higher rate, he said. The cost of consumer financing has already roughly doubled in recent years, said Quinlan of Wells Fargo. The average 10-year Treasury yield was about 2.1% from 2012 to 2022; it has been about 4.1% from 2023 to the present, he said. Of course, the U.S. debt burden is just one of many things that influence Treasury investors and yields, Quinlan said. For example, Treasury investors sent yields sharply higher as they rushed for the exits after Trump announced a spate of country-specific tariffs in April, as they questioned the safe-haven status of U.S. assets. "But it's not going out on too much of a limb to suggest financial markets the last couple years have grown increasingly concerned about debt levels," Quinlan said. Absent action, the U.S. debt burden would still rise, economists said. The debt-to-GDP ratio would swell to 138% even if Republicans don't pass any legislation, Smetters said. But the House legislation would be "pouring gasoline on the fire," said Chao. "It's adding to the problems we already have," Chao said. "And this is why the bond market is not happy with it," he added.
Yahoo
2 days ago
- Business
- Yahoo
Massie labels House-passed Trump policy bill a ‘debt bomb ticking'
Rep. Thomas Massie (R-Ky.) labeled the sweeping tax and spending bill a 'debt bomb ticking' on Thursday ahead of the House vote passing the legislation following an all-night marathon session. The bill includes language increasing the debt limit by $4 trillion. It would also extend President Trump's tax cuts from 2017, add other tax provisions and slash Medicaid funding. It now goes to the Senate. 'I'd love to stand here and tell the American people, we can cut your taxes and we can increase spending and everything's going to be just fine. But I can't do that because I'm here to deliver a dose of reality,' Massie, one of two Republicans to vote against the bill, said on the House floor. 'This bill dramatically increases deficits in the near term but promises our government will be fiscally responsible five years from now,' he added. 'Where have we heard that before? How do you bind a future Congress to these promises? This bill is a debt bomb ticking,' he continued. The lawmaker said Thursday's House-approved bill would force the government to pay $16,000 of interest per U.S. family. He estimated that under the bill's taxing and spending levels, the national debt could swell by up to $30 trillion over the next decade. 'We're not rearranging deck chairs on the Titanic tonight. We're putting coal in the boiler and setting a course for the iceberg,' Massie said. 'If something is beautiful, you don't do it after midnight,' he said before yielding. Prior to the vote, Massie voiced his concerns on Wednesday, causing the president to lash out against the Kentucky representative, labeling him a 'grandstander.' 'I don't think Thomas Massie understands government. I think he's a grandstander, frankly' Trump said at the Capitol when asked about Massie's concerns the president's legislative agenda will add to the deficit. He later added the lawmaker should be voted out of office. Massie said the president's criticism would not affect his position on the bill. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Washington Post
2 days ago
- Business
- Washington Post
These Kentucky Republicans attempt an unlikely bulwark to Trump
It is one of the most politically conservative states, yet Kentucky has become an unlikely stronghold for Republicans who oppose President Donald Trump's policy agenda. Rep. Thomas Massie (R) served as the most vociferous GOP critic of the massive tax-and-border bill that passed the House on May 22 by a single vote, the latest in a string of votes against Trump's wishes.
Newsweek
4 days ago
- Politics
- Newsweek
Republican Says US Should End All Military Aid to Israel
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Republican Representative Thomas Massie of Kentucky said Thursday night that the United States should stop all military aid to Israel, citing mounting civilian casualties in the Gaza Strip. Newsweek reached out to Massie's office via email Thursday for comment. Why It Matters Tensions in the Middle East remain high despite ongoing ceasefire negotiations between the Israeli government and Hamas, with the U.S. acting as a key interlocutor. Tens of thousands of people in Gaza have died as a result of Israel's war against Hamas, which was launched in response to Hamas' attack in Israel on October 7, 2023. President Donald Trump, meanwhile, has repeatedly suggested that the U.S. "take over the Gaza Strip," adding at a news briefing alongside Israeli Prime Minister Benjamin Netanyahu: "We'll own it and be responsible for dismantling all of the dangerous unexploded bombs and all of the other weapons on the site." Asked about the possibility of sending U.S. troops into Gaza, Trump said: "As far as Gaza is concerned, we'll do what is necessary, if it's necessary, we'll do that." Representative Thomas Massie (R-KY) is seen speaking to reporters following a series of votes at the U.S. Capitol on March 11, 2025, in Washington, D.C. (Photo by) Representative Thomas Massie (R-KY) is seen speaking to reporters following a series of votes at the U.S. Capitol on March 11, 2025, in Washington, D.C. (Photo by) What To Know Massie's remarks about ceasing U.S. military aid to Israel come as the U.S.-backed Gaza Humanitarian Foundation (GHF) faces intense criticism over what critics describe as a chaotic approach to aid distribution. Video footage and photos posted to social media have shown thousands of Palestinians scrambling for food amid reports of Israeli gunfire and multiple casualties. In his post to X on Thursday, the Kentucky lawmaker said, "Nothing can justify the number of civilian casualties (tens of thousands of women and children) inflicted by Israel in Gaza in the last two years. We should end all U.S. military aid to Israel now." Massie has long been outspoken about his views of Israel and was the only Republican to vote against a bill condemning antisemitism in 2022. The Kentucky Republican later defended his vote on X, formerly Twitter, saying, "I don't hate anyone based on his or her ethnicity or religion." "Legitimate government exists, in part, to punish those who commit unprovoked violence against others, but government can't legislate thought," Massie added. "This bill promoted internet censorship and violations of the 1st amendment." In March 2024, Massie voted against a bill that would have forced then-President Joe Biden to approve more military assistance to Israel. Last October, while Israel was carrying out its military campaign in Lebanon, Massie posted on X: "If Israel insists on destroying civilian targets in Lebanon, let them buy and build their own weapons. American taxpayers should not be funding this." Massie is no stranger to criticism, including from members of his own party. He's repeatedly voted "no" on congressional budget proposals backed by the Republican Party. Most recently, he drew President Donald Trump's and senior GOP lawmakers' ire when he voted against the Trump-backed bill that recently passed the House of Representatives, arguing that it would balloon the national deficit. Nothing can justify the number of civilian casualties (tens of thousands of women and children) inflicted by Israel in Gaza in the last two years. We should end all U.S. military aid to Israel now. — Thomas Massie (@RepThomasMassie) May 30, 2025 This story is developing and will be updated as more information becomes available.
Yahoo
24-05-2025
- Business
- Yahoo
"This Is A Sad Day For America" — MAGA Supporters Have A LOT To Say About Trump's "Big, Beautiful" Tax Bill, And It's Not What I Was Expecting
Donald Trump's self-described "big, beautiful" tax bill has officially passed the House of Representatives and is now headed to the Senate. The legislation extends tax cuts that primarily benefit the highest earners, increases funding for the military and immigration enforcement, eliminates taxes on tips and overtime, reduces funding for Medicaid and food stamps, and ends tax incentives for clean energy. Per an NBC report, the Congressional Budget Office expects the bill to add $2.3 trillion to the federal deficit over the next decade, as the cost of tax breaks and new spending far exceeds savings. The bill squeaked through by a single vote (215 to 214). All Democrats opposed it, joined by just two Republicans: Rep. Warren Davidson of Ohio and Rep. Thomas Massie of Kentucky. Ahead of the vote, Massie warned of the bill's consequences, calling it a "debt bomb ticking." He said, "I'd love to stand here and tell the American people, 'We can cut your taxes and we can increase spending and everything's going to be just fine.' But I can't do that because I'm here to deliver a dose of reality." I'd love to stand here and tell the American people 'we can cut your taxes and increase spending and everything will be fine.'But I can't because I'm here to deliver a dose of reality about the ticking debt bomb known as the 'Big Beautiful Bill.' — Thomas Massie (@RepThomasMassie) May 22, 2025 C-SPAN / @RepThomasMassie / Via Twitter: @RepThomasMassie "This bill dramatically increases deficits in the near term but promises our government will be fiscally responsible five years from now," he continued. "Where have we heard that before? How do you bind a future Congress to these promises? This bill is a debt bomb ticking." To my surprise, Massie was not the only conservative speaking out about the bill. In the hours following the vote, a wave of conservative voices took to social media to express their thoughts — and they're not too thrilled, either. Here's what they had to say: 1."Where's the spending cuts we were promised?" —Vag-etarian Related: "Honestly Speechless At How Evil This Is": 26 Brutal, Brutal, Brutal Political Tweets Of The Week 2."So adding to the debt is good now that we're in power?" —Blown89 3."Oh boy, more needless spending." —Nero_Ocean 4."Great. I like how they're just avoiding that it doesn't balance the budget. What are we even doing at this point with that? Just spending ourselves into oblivion? Fine. I'll say the unpopular thing — if that's where we're going, I might as well vote Democrat so it happens faster. I'm so incredibly discouraged at this point." "It's great that we're getting a lot of this culture war stuff; I'm big on that, too, but if we don't get the deficit under control fast, all the rest of that won't matter in relatively short order. I need to start teaching my kids how to farm their own food at this rate because the depression that is starting to look increasingly inevitable with our fiscal behavior will make what happened in the 1930s look like the boom in the '50s." —deadzip10 5."I think Trump could do it, if anyone had the momentum and control to drastically lower the deficit over time, I think it's this administration. Disappointed that isn't the case. The rich continue to get richer, that money exists out there, and it's not 'trickling down' anymore." "We can't fix our country's problems by taxing Elon Musk more alone, but I feel like a change needs to happen in how we approach extravagant wealth. But poor people from West Virginia don't win elections; the rich do. I'm so jaded. Come on, Trump and co., you can do this!" —MapleMonstera Related: People Are Obsessed With Pope Francis's Final, Resounding Message To JD Vance After His Visit To The Vatican 6."I encourage everyone to read the language of the bill, it feels rather reckless and does virtually nothing to help the middle/lower class." —Simmumah 7."I'm all for lowering taxes, but drastically lowering them AND increasing spending is a recipe for disaster. It's like trading in your full-time job for a part-time job, and at the same time upgrading from a two-bedroom apartment to a mansion. Lowering revenue and raising spending is asinine." —Zaphenzo 8."I'm a strong Republican and, in general, a big fan of Trump, but this is a sad day for America. Adding to the deficit is unacceptable." —r_barchetta 9."This bill won't pass in its current form in the Senate, which is fine, I don't think it should. I don't know why we're masking the increase in spending with cuts to programs that benefit the poor. I encourage people to read the language on the work requirements part, it's very vague and hard to navigate when it comes to reporting." "I'm all for cutting waste, fraud, and abuse on Medicaid and SNAP, but there are better ways to go about it than work requirements (I'm also all for those able-bodied being put to work, but the disabilities listed don't cover anywhere near all disabilities that could prevent someone from working). I think if the Medicaid/SNAP changes go through as is, the GOP will get mauled in the midterms. This bill is pretty reckless and feels like it's just trying to push something through ASAP, maybe Chip Roy was right (even though he folded under pressure)." —Simmumah 10."If we just agreed that Republicans care nothing for fiscal responsibility in 2025, this bill would be easier to swallow. Yeah, a couple nuggets of good for the working class, but by and large, the only thing it really accomplishes is increasing the deficit and spending across the board." —d_rek 11."Unfortunately, this is basically just more tax cuts for wealthy." —superduperm1 12."STOP FUCKING SPENDING! Edit: I love the no tax on OT and no tax on tips." —milezero13 13."I'm extremely disappointed with this bill because it adds [$2.3 trillion] to the debt over 10 years. Our country is heading rapidly into a debt crisis that will crush American living standards." —RedditThrowaway-1984 14."After this bill, we're done spending and we're going to start paying down the deficit for real, right guys? Guys?" —triggernaut Well, I'm glad we can all agree But let us know your thoughts down in the comments. Note: Some responses have been edited for accuracy and grammar. 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