Trump-o-nomics Will Blow Up the Debt

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.

Peter G. Peterson Foundation:

New analysis released today from the nonpartisan Congressional Budget Office (CBO) shows deficits doubling and debt skyrocketing under a scenario where the expiring provisions of the Tax Cuts and Jobs Act (TCJA) were made permanent. If interest rates were also higher than projected, a second scenario shows that the United States would incur even worse fiscal damage.

CBO finds that:

1. If provisions of the TCJA were made permanent (and there were no other changes to fiscal policy), debt held by the public (DHBP) would reach 214 percent of gross domestic product (GDP) in 2054 — 47 percentage points higher than under the baseline scenario in which the provisions expire as scheduled and well above the level in 2024 of 98 percent of GDP.
2. Making those provisions permanent would lead to a near-doubling of the annual deficit relative to GDP — from 6.3 percent this year to 12.3 percent in 2054.
3. In addition, if interest rates also increased each year until they were higher than projected by 1 percentage point, DHBP would exceed 250 percent of GDP within 30 years. Macroeconomic feedback effects would further increase interest rates and, therefore, lead to even worse fiscal outcomes. Such findings demonstrate the sensitivity of the nation’s finances to borrowing costs.

But wait, there's more!

Jacob Bogage at WP:

Senior tax officials are bracing for a sharp drop in revenue collected this spring, as an increasing number of individuals and businesses spurn filing their taxes or attempt to skip paying balances owed to the Internal Revenue Service, according to three people with knowledge of tax projections.

Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024, said the people, who spoke on the condition of anonymity to share nonpublic data. That would amount to more than $500 billion in lost federal revenue; the IRS collected $5.1 trillion last year. For context, the U.S. government spent $825 billion on the Defense Department in fiscal 2024.

Troll in Chief

Our forthcoming book is The Comeback: The 2024 Elections and American Politics.

Juan Benn Jr. at Politico:

At the heart of Trump 2.0’s social media strategy is a modern interpretation of a musty job — the president as online influencer.

“Social media generally is defined by trends, just like anything in culture, and understanding those trends and embracing them to deliver a message is extremely important to us,” said an administration official granted anonymity to speak candidly about White House social media strategy.

The nod to ASMR, or autonomous sensory meridian response, is evidence of the embrace of those trends. An online fad for years. ASMR refers to a bodily sensation triggered by an audio or visual stimuli such as whispering, tapping nails, or crinkling paper in front of a microphone, meant to make viewers feel at peace. The White House’s deportation ASMR video was a wink at that trend, suggesting that watching people being deported can be calming. It had the additional benefit of underscoring the president’s policy goal of getting tough on immigration.

...

The antagonize-and-conquer strategy has delighted a segment of the MAGA base, but it has limits. Replies to the Trump-Gaza video [below] are full of people saying they support Trump, but not the over-the-top video. Some took issue with the golden statues of Trump and a shot of bearded belly dancers, swaying by the beach.

“This may be trolling, but many of us (your supporters) are scratching our heads over this one,” read one reply.

Thus far, the Trump team has paid no heed to the objections. Like all of the social media controversies of Trump’s past, the assumption is that his supporters will eventually ignore them or get on board. And they have reason to think so — every time the administration has crossed what looked like a line, they ended up just moving the window of acceptable online discourse 

Public: Raise Taxes on Rich People and Corporations

Our forthcoming book is The Comeback: The 2024 Elections and American Politics.

Andy Cerda at Pew:

More than six-in-ten U.S. adults (63%) say tax rates on large businesses and corporations should be raised. This includes 34% who say they should be raised a lot. Another 19% say large businesses’ tax rates should be lowered, while 17% say they should be kept the same as they are now.

About six-in-ten (58%) say tax rates on household income over $400,000 should be raised, including 23% who say these tax rates should be raised a lot. Much smaller shares say taxes on higher-income households should be lowered (19%) or kept the same (21%).

As has been the case in recent years, views differ substantially by party. Democrats are overwhelmingly supportive of raising taxes on these groups, while Republicans are more divided.

• 81% of Democrats and Democratic-leaning independents support raising taxes on large businesses and corporations. Nearly as many (74%) say taxes should be raised on household income over $400,000.
• By contrast, 43% of Republicans and Republican leaners say taxes on each group should be raised, while roughly three-in-ten say taxes for these groups should be lowered.

Senate 2026

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. It includes a chapter on congressional and state elections.

Chris Stirewalt at The Hill:

Sen. Jeanne Shaheen (N.H.) announced that she would not seek a fourth term. Shaheen, 78, joins two other Democrats from similarly light-blue states, Sens. Gary Peters (Mich.) and Tina Smith (Minn.), who already announced their retirements.

But Shaheen hits a little differently. Not only has New Hampshire been among the crumbliest pieces of the “blue wall” in the Trump era, it has a solid Republican Party. If popular former Gov. Chris Sununu decided he wanted the gig, it would make it tough for Democrats to hold. At the very least, it is going to be an expensive headache for a party already playing defense.

...

Of the 35 seats — 33 regular elections and special elections in Ohio for the remainder of the term won by now-Vice President Vance and in Florida for that of now-Secretary of State Marco Rubio — most are on Republican turf. Looked at that way, Republicans have more on the line with 21 seats to defend compared to just 14 for Democrats.

But most of the Republican seats are in places where the risen Lord couldn’t win a statewide election if he was running as a Democrat. 

D pickup opportunities are slim.  In Maine, Collins could be in trouble if she runs again. 

North Carolina Sen. Thom Tillis is in a better place than Collins but faces a different kind of problem. His state has voted Republican on the presidential level every year since 2008. It’s been wobbly now and then, but it is still a red state. The main problem for Tillis is that his state party is a disaster and the Democrats there are not. He is certain to draw a primary challenge from the same wing of the North Carolina GOP that served up Mark Robinson, author of an embarrassing 2024 gubernatorial defeat. Tillis will be lucky to survive his primary, and if he does will likely face a top-drawer Democrat, like former Gov. Roy Cooper.

In Georgia, Ossoff was lucky in 2020.  

Could Republicans repeat their past mistakes and put a screwball candidate up in midterms? There’s always a chance. But if Senate Majority Leader John Thune (S.D.) and the GOP can convince Gov. Brian Kemp to take the plunge, Ossoff’s luck will probably have run out.

Of course everything could change if the economy crashes and take the GOP with it. 

Using Government Against the Left

 Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start

Kenneth P. Vogel and Shane Goldmacher at NYT:

Executive actions intended to cripple top Democratic law firms. Investigations of Democratic fund-raising and organizing platforms. Ominous suggestions that nonprofits aligned with Democrats or critical of President Trump should have their tax exemptions revoked.

Mr. Trump and his allies are aggressively attacking the players and machinery that power the left, taking a series of highly partisan official actions that, if successful, will threaten to hobble Democrats’ ability to compete in elections for years to come.

...

Undermining the left would amount to follow-through on Mr. Trump’s campaign promises to seek “retribution” against his perceived enemies.

The sentiment has been echoed and expanded upon by some of Mr. Trump’s closest advisers.

The billionaire Elon Musk, the top Trump donor leading the administration’s cost-cutting initiative, has appeared to encourage investigations of institutions that form the financial backbone of the left. They include ActBlue, the donation platform that helps fund virtually the entire Democratic Party and that congressional Republicans are already probing, and Arabella Advisors, a consulting firm that manages difficult-to-trace “dark money” groups that collectively have spent billions of dollars helping Democrats and their cause

...

Congressional officials say the Trump administration has signaled that it intends to throw its weight behind investigations of ActBlue in the House. And Senator Ted Cruz of Texas has suggested that ActBlue might have criminal exposure. He has also demanded documents from and threatened to subpoena another key company providing digital infrastructure for the left, Bonterra, which runs a crucial Democratic voter database system and supplies much of the party’s organizing software.

Some of the president’s allies have welcomed the moves as payback for Democratic congressional investigations of Mr. Trump and Republican political networks.

Trump v. the Rule of Law

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. .

 

Unusual statement from Chief Justice Roberts pushing back against President Trump (but not singling him out by name)

“For more than two centuries, it has been established that impeachment is not an appropriate response to disagreement concerning a judicial decision,” Roberts… pic.twitter.com/tEFixrhu4H

— Manu Raju (@mkraju) March 18, 2025

Screwups: DOGE Hurts Veterans and the Elderly

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. 

Lindsay Ellis at WSJ:

Managers say essential staff have been cut, and that the administration hasn’t followed detailed rules on how to enact widespread layoffs. Government agencies have granted voluntary buyouts to tens of thousands of people, fired probationary workers—a term for those who were hired or promoted in the past year or two—and are planning for deep reductions in the next few months. So far, many cuts haven’t taken into account workers’ performance or the necessity of their roles.

...

In interviews, more than 60 current and former federal workers said the wide slashing has worsened services Americans receive and hindered remaining staff working on areas like improving healthcare and lowering energy bills. It also has discouraged top talent from working for the federal government.

...

In many parts of the country, the Trump administration’s job cuts have hit services and constituencies that Trump pledged to protect.

Chief among them is the Department of Veterans Affairs, which plans to cut about 70,000 positions and has already laid off thousands. The agency employs about 470,000 people.

Fewer VA staff are handling veterans’ claims that will get them treatment for military-service injuries and mental health conditions, two current employees said. This has already resulted in veterans waiting longer to get treatment in North Texas, one said.

 Tara Siegel Bernard at NYT:

The Social Security Administration, which sends retirement, survivor and disability payments to 73 million people each month, has long been called the “third rail” of politics — largely untouchable given its widespread popularity and role as one of the country’s remaining safety nets.

But in recent weeks, the Trump administration, led by Elon Musk’s crew of cost cutters at the Department of Government Efficiency, or DOGE, has taken its chain saw to the agency’s operations. The agency has announced plans to cut up to 12 percent of its work force, at a time its staffing is at a 50-year low. It has also offered early retirement and other incentives, including payments up to $25,000, to the entire staff.

Many current and former Social Security officials fear the cuts could create gaping holes in the agency’s infrastructure, destabilizing the program, which keeps millions of people out of poverty and large percentages of retirees rely on for the bulk of their income.

The actions have caused Social Security employees and former commissioners and executives of both parties to sound alarm bells, saying it would be difficult to repair the damage, which could threaten access to benefits.

1. EXCLUSIVE

An internal Social Security Administration memo, dated March 13, lays out a plan to sabotage the agency.

The memo itself predicts "service disruption," "operational strain," and "budget shortfalls" will result.

Follow this thread for details. pic.twitter.com/nlf71ATp9z

— Judd Legum (@JuddLegum) March 17, 2025