he fact that “one, big, beautiful bill” didn’t get through the House Budget Committee today is not the end of the world. The bill is going to pass the House. Bet on it. Invest on it.
President Trump is returning from his successful Middle Eastern trip and he’s turning up the heat on the budget. Posting on truth social quote “”Republicans MUST UNITE behind, “THE ONE, BIG BEAUTIFUL BILL!” Not only does it cut Taxes for ALL Americans, but it will kick millions of Illegal Aliens off of Medicaid to PROTECT it for those who are the ones in real need. “
The package of across-the-board tax cuts, deregulation, and new laws to trim spending will pass and will promote a burst of growth. Speaking of growth, too many Republicans have forgotten the economic power of growth.
The late great Jack Kemp pointed out that rapid growth would create so much prosperity that the demand for federal spending would go down, while the economy would keep expanding . Think of is as spending over GDP. the numerator goes down, while the denominator goes up, and the burden of federal spending on the economy diminishes. Using the same logic, the burden of deficits and debt will come way down over time while the economy goes way up.
For example, Congressional Budget Office always assume the economy can never grow more than 2%. But supply-siders know otherwise. Lower taxes create new incentives to work and invest. Sweeping away regulatory barriers is a boon to businesses and lower consumer costs.
White House NEC Director Kevin Hassett suggested the other night, the passage of the reconciliation bill would boost growth from CBO’s paltry 2% to a Trumpian Golden Age 3% or even better. In round numbers, over 10 years, that growth differential is worth something like $4 trillion. That’s a major league supply-side growth dividend.
Now, work requirements for Medicaid, food stamps, and other welfare related programs is very important, and it will yield big budget savings as it did in the middle 1990’s when Bill Clinton and Newt Gingrich followed a similar approach to curbing welfare and promoting workfare.
Taking illegal aliens off the government dole is another good idea. But Republicans must not forget the importance of growth.
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