The Supreme Court Blew Trump’s Budget to Smithereens |
The Supreme Court Blew Trump’s Budget to Smithereens
The president was already doubling the budget deficit. With the high court’s tariff decision, he’s tripling it. There’s only one solution: Repeal his “big, beautiful” tax cut.
The Supreme Court’s tariff decision creates two revenue problems for President Donald Trump. The more obvious one has commanded most of the attention: Trump has to give back more than $175 billion in revenue already collected through the insta-tariffs he imposed, illegally, under the 1977 International Emergency Economic Powers Act, or IEEPA. But that’s the lesser of his two problems. The much bigger one is that Trump just lost $1.4 trillion in projected tariff revenue over the next decade. The only rational solution is to repeal at least some of last year’s “big, beautiful” reconciliation bill.
If it were up to me, I’d repeal the whole thing. The reconciliation bill included $4.5 trillion of tax cuts over the next 10 years, most of which benefited the top 10 percent in income distribution (that is, households earning, roughly, more than $200,000). The Democrats pander to the lower tiers of the top 10 percent by calling them middle class, but that crowd is better described as affluent, and it can afford to pay higher taxes. Still, if pander we must, let’s repeal, as President Joe Biden once proposed, Trump’s 2017 tax cut—the extension of which was the guts of Trump’s One Big Beautiful Bill Act, though Trump added other goodies for the rich—for everybody earning more than $400,000. And, of course, apply the same template to Trump’s 2025 add-ons.
Budget nerds may quibble that the 2025 reconciliation bill added “only” $3.4 trillion to the deficit because the $4.5 trillion in tax cuts was offset by about $1 trillion in budget cuts to Medicaid, food stamps, and student loans. But since these budget cuts are barbaric, we should repeal them too (after Democrats leverage the fact of their barbarism to win back the House and maybe the Senate in the........