The Red Jackal

Major Changes or a Missed Opportunity?

So, after months of buildup we finally have President Trump’s One Big Beautiful Bill (OBBB) passed by congress. Even though most of the OBBB I agree with, I believe that the Republicans missed an opportunity to make monumental changes to government spending so that our national debt can be reduced.

The things that I like about the bill: Permanent tax cuts, Social Security taxes, and fixing Medicaid. Making the tax cuts from the President’s first term permanent was necessary as this was going to sunset in 2025 otherwise there would be a major tax raise on most of middle class America. Considering that most middle class Americans are still suffering from the disastrous Biden Presidency, a tax raise would only add to the pain.

As for Social Security, I never understood why these payments were taxed. People work all their life to get this benefit and then when they retired get taxed on it. Most seniors will need these payments especially after the last four years in which inflation most likely reduced the value of their retirement savings. Even though in the end Social Security is not fully exempt from tax, there is enough exempt to help out older middle class Americans. Personally I would have loved to seen in the bill to phase in a raise in the age to 68, but no politician (bar a few) has the courage to change this.

One of the many disastrous policies under the Obama administration was the expansion of coverage for Medicaid. This was an attempt to get as many people onto Medicaid with intention of nationalizing healthcare. Under Biden, the policy was expanded to get as many illegals onto the program in hope of getting future votes. So, I am glad the republicans not only put working requirements but to kick off all illegals that are on the program now. Hopefully for the latter this will have a two prong effect in which it save Americans’ money and incentivizes illegals to go back to their country of origin.

The main thing I did not like in the bill was that spending was not cut enough. I think the final number was one trillion over ten years, which is nice, but the cuts had to go much deeper. The last second change in the Senate to extend subsidies for another year for renewable energy will be costly. These energy companies now have another year to rush projects into construction (they only need 5 % of spend of the project budget to qualify) and then they get another ten years of subsidies. It would have been much better to apply this immediately.

Another area in which there should have been a greater focus on relates to Non-Governmental Organizations (NGOs). I don’t have any official statistics on how many of these exist but going off of Elon’s interview with Joe Rogan there are millions of these in which there is no oversight whatsoever. No one oversees if these are even legitimate organizations and most likely are just get rich opportunities for the politically connected posing as a charitable business. Furthermore. it has been alleged by the work of DOGE that these are nothing more political machines funneling tax payer money to political parties. In my opinion, there should be no tax payer money going to these NGOs, if they want to form a business, go out to the private sector to secure funding. I am sure there are legitimate organizations that do good for the community but overall the amount of funding needs to be cut down substantially and these need to submit financial statements just like they would in the private sector.

Finally, I did not like the raising the State and Local Tax (SALT) limit from ten thousand to forty thousand. I feel bad for our brethren in California and New York, but it has hard to see why these states should get a federal tax break from their own state’s bad policies and governance. With the threshold being raised to forty thousand, this reduces revenues of about 600 billion which could really help with the our national debt. The rationale for this raise is that it helps middle class families in these states but it does not de-incentive their states from reckless spending. Both New York and California know that this can be applied to their Federal taxes therefore spend recklessly. In reality, there should be no SALT deduction but it should have stayed at ten thousand.

I know the main focus of the Trump administration is to reduce our debt with rapid economic growth. History has shown that tax breaks do increase revenue. However, even with increased revenues, you have not seen a reduction in our national debt and the main reason for this is that the government continues to spend more than it takes in. For the most part, I like what the OBBB does, I just feel that the Republicans missed out on a chance to significantly reduce government waste. Maybe it was mistake to do this in one bill as there are just too many areas to get all Republicans to agree on. This probably should have been done in multiple bills in which they would be more focused and build consensus on how to address the spending issues without the threat if you do not go along you will be responsible for a tax hike.