The GOP's lies and delusions

The president and the Republican Party have demonstrated that if you are not a wealthy American, the government will not help you.

By David Bernell and Thomas Graham

Legislation known as the “One Big Beautiful Bill Act” (OBBBA) was passed by both houses of Congress and signed by President Donald Trump last week. How a country chooses to spend its money, who pays taxes and how much, and the choices made to arrive at these outcomes say a lot about what that country values. The current president and the Republican Party have demonstrated with this bill that they value rich people. If you’re not a wealthy American, today’s GOP has determined that the government of the United States should be and will be doing less to help make your life better.

The most notable aspect of the OBBBA is that this will probably be the greatest transfer of wealth from the poor to the rich in the history of the United States. Republicans enacted and extended a number of tax breaks, with the vast majority – about 70 percent -- of the $5.1 trillion in tax cuts going to the wealthiest people in the country over the coming decade.

The GOP is paying for this legislation in two ways. The first is simply to borrow money, via deficit spending and increasing the national debt. Though the Trump White House and Republicans in Congress say that their bill will reduce the deficit, no independent analysis supports this claim. Congressional and other analyses estimate that this bill will raise the national debt by as much as $4 trillion in the next decade. “Borrow and spend” is the typical way the Republican Party has paid for tax cuts for the wealthiest Americans since Ronald Reagan was in office. However, in the case of the OBBBA, the bill’s price tag was so big that even the GOP majority in Congress would not pay for the entire bill with borrowing alone.

To offset part of the cost of the bill, the GOP included sizable spending cuts, targeting those who are less well off. The largest cut – over $1 trillion – will be borne by Medicaid, the Children’s Health Insurance Program, and the Affordable Care Act, all of which provide health care for low-income Americans. Another $500 billion could be cut from Medicare. Though the White House and GOP supporters of the bill have repeatedly stated that they are not cutting anyone’s benefits, only waste and fraud in the system, this is not the case. Spending cuts, regulatory changes, work requirements to be eligible for Medicaid, and a plethora of reporting requirements to determine Medicaid eligibility can be expected to take health insurance from 12 million people who would otherwise be eligible. (Another 5 million people will lose their insurance as a result of changes to the Affordable Care Act that will take effect later this year).

A recent White House press release pleaded with readers to ignore this reality: “The President has said numerous times [that] there will be no cuts to Medicaid.” The president might have said this many times, and he might believe it, but the facts argue otherwise.

Hundreds of billions in additional cuts to existing programs will come from food assistance programs and the elimination of tax incentives for clean energy resources such as solar, wind, and batteries. Existing and new cuts to education and scientific research are also part of the Trump and GOP agenda.

All Democrats in Congress opposed this legislation. In both the House and Senate, several Republicans spoke out publicly against parts of the bill for different reasons. Sen. Lisa Murkowski (R-Alaska) seemed to be particularly appalled by it, which made her vote to pass the bill (after securing a few extra dollars for her state) a notable betrayal. In the end, however, as one commentator put it, “Republicans always chicken out.” All but three Republican senators and two Republican House members dutifully fell in line behind Trump--even those Republicans objecting loudly only a few days (or even hours) earlier.

In short, Trump and congressional Republicans have taken well over $1 trillion that had been allocated to people with the lowest incomes – to pay for health insurance and groceries, and to keep energy bills lower – to send to the people with the most income and generational wealth. This is their priority.

Harming Ourselves Abroad Too

The new Trump/Republican bill will not only harm people in the United States. It will also hurt the country and undermine U.S. interests around the world. The Trump administration has already made a down payment on diminishing the United States in the world with its destruction of the U.S. Agency for International Development (USAID), ending foreign aid programs for vaccinations and medicines, feeding the hungry, helping refugees flee wars, providing relief from natural disasters, promoting economic development, and combating violence against women.

The administration has withdrawn the United States from the Paris climate agreement and is reversing the progress made in developing affordable clean energy resources. It is also seeking to curtail or shut down the Voice of America and Radio Free Europe, which have provided unbiased news coverage and factual information for decades in multiple countries and languages, with particular focus on authoritarian regimes that don’t have a free press. This seems to be yet another example of Trump and the Republican Party abandoning the American agenda of supporting the growth of democracy around the world.

The OBBBA will add to this state of affairs and make matters worse. It’s not only America’s standing in the world and its soft power that are being diminished. The economic consequences will be significant too. The law will generate a massive amount of new debt. The United States borrows money by selling U.S. Treasury bonds, and it has always been dependable in paying both the annual interest payments and the principal (even though the GOP has threatened to default a few times in recent years). Buying Treasury bonds is considered a safe and reliable investment. It is a great place to put money if you want to be certain of a return, which is why governments around the world, multinational corporations, Chinese and Saudi sovereign wealth funds, commercial and investment banks, pension funds, and 401(k) managers buy Treasury bonds.

In addition, American debt has been a key linchpin of the global economy for decades. The dollar is the main currency used in global trade and finance since World War II. It is the world’s “reserve” currency. For all these reasons, the dollar has generally remained strong, and the United States has been able to borrow money (in its own currency) at very low interest rates. These circumstances give the United States a privilege no other country enjoys, and it provides the added bonus of making deficit spending and the national debt more affordable. If the American government takes steps that make the dollar and the American economy look too risky or unattractive, as passing the OBBBA did, then the currency of other countries – like the Chinese yuan – could fill the void, which is something the Chinese government wants.

Trump has already started to botch things with regard to America’s envied economic status. His on-again, off-again tariffs have not only caused stock markets to fluctuate, but they also weakened the dollar in the market for Treasury bonds, which increases the interest rates the U.S. government has to pay its bondholdersd. The OBBBA will add so much new debt that the United States will be seen as a far less responsible borrower in the eyes of its lenders. The bill is expected to cause borrowing costs to rise, as investors are likely to buy bonds from an increasingly risky United States only if they can get a bigger rate of return.

Every increase of 1 percent in interest rates costs American taxpayers an extra $187 billion a year, according to a 2022 analysis. Even before the OBBBA was proposed, the interest payments on the debt alone have been the among biggest items in the federal budget, reaching $881 billion in 2024, and they are expected to rise to $1.8 trillion a year in 2035. The addition of $4 trillion in debt, accompanied by higher interest rates, means that the United States will be further indebted to others. The national debt has ballooned from $19.6 trillion in 2016 to $35.5 trillion today, and is now estimated after the passage of OBBBA to reach $52 trillion by 2034, leaving even less money to spend on things like health care, clean energy, infrastructure, and education (or maybe even protection of financial markets for billionaires).

More broadly, the OBBBA signals that the U.S. government under Trump and the Republicans has little regard and little understanding of the role the United States has played in the global economy, or the benefits accrued from that global role. With their cuts to USAID and other overseas programs, they are showing their political ignorance and devil-may-care attitude. With the growing levels of indebtedness they chose to take on, they are showing their economic ignorance and unreliability.

Much of the world already regards the American president as erratic and untrustworthy, someone willing to walk away from America’s allies and friends, and someone whose ego has to be managed at meetings with other national leaders. These attributes, combined with the growing view of the United States as an irresponsible economic partner, risk making the United States the equivalent of that relative who is constantly asking to borrow money, or the capricious friend who comes around periodically with another get-rich-quick scheme. Such people, and such countries, are not respected, trusted, or well-regarded.

What’s worse is that the OBBBA will serve America’s adversaries and competitors well. In short, if one was looking for the ideal way to make millions of Americans worse off in terms of their income and their health, to weaken the American economy, to saddle the country with trillions of dollars in more debt, to create more air pollution and speed up climate change, and to abandon investments in science, technology and innovation, then this would be the legislation they would have produced. We can be sure that Xi Jinping, Vladimir Putin, Kim Jong Un, and Ayatollah Khamenei welcome and appreciate the OBBBA. It is a huge gift to them. It will “Make America Poorer and Weaker.” Some of the effects will be noticed quickly, such as when people start losing their health insurance. Some of the effects will only be noticed with the passage of time, such as the size of the national debt and higher interest rates when buying a car or home. But they all will be felt.

The trouble and misfortune that Trump and the Republican Party are leaving in their wake will take years to recover from, if they can be remedied at all.

David Bernell is an associate professor in the School of Public Policy at Oregon State University. He is the author of “Constructing US Foreign Policy: The Curious Case of Cuba,” and “The Energy Security Dilemma: US Policy and Practice.” He served in the Clinton administration with the Office of Management and Budget and the Department of the Interior.

Ambassador Thomas Graham Jr. was acting director of the U.S. Arms Control and Disarmament Agency in the Clinton administration and served as general counsel of ACDA during the presidencies of Jimmy Carter, Ronald Reagan and George H.W. Bush. He is the author of several books on nuclear arms control, U.S. foreign policy, and American politics.

You can find their work on Substack at Defending Democracy.

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