The Economic Consequences of the Big Odious Bill

Sometimes, the small details tell a larger story. On February 6th, a couple of weeks after Donald Trump returned to the White House, he met with Republican lawmakers to discuss his tax and spending plans. He was looking to extend the huge pro-business tax cuts that Republicans had pushed through during his first term and to enact a pair of more populist proposals he had campaigned on in 2024: exempting tips and seniors’ Social Security payments from federal taxes. But, as the budget deficit stood at about 6.4 per cent of G.D.P., a very high figure historically, the President and other G.O.P. leaders were under pressure to find revenue raisers and spending cuts that would offset the cost of the policies.

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Oren Cass, the founder of the conservative think tank American Compass, who has defended Trump’s protectionist trade policies but has argued that Republicans need to embrace higher taxes on the rich, was on the right track when, according to The Economist, he joked that the bill is “zombie Reaganism” or “zombie Ryanism.” If it proves to be the last significant piece of tax-and-spending legislation passed while Trump is President, a possibility that is far from remote, he could go down in history—or at least in fiscal history—not as the disrupter and agent of change that he likes to see himself as but rather as someone who simply extended the agenda of Ronald Reagan, Grover Norquist, and Paul Ryan to its logical conclusion: utter incoherence and irresponsibility.