{"id":3190,"date":"2025-06-09T08:58:54","date_gmt":"2025-06-09T12:58:54","guid":{"rendered":"https:\/\/www.nypirg.org\/capitolperspective\/?p=3190"},"modified":"2025-06-09T08:58:54","modified_gmt":"2025-06-09T12:58:54","slug":"musk-trump-and-the-nations-finances","status":"publish","type":"post","link":"https:\/\/www.nypirg.org\/capitolperspective\/musk-trump-and-the-nations-finances\/","title":{"rendered":"Musk, Trump, and the Nation\u2019s Finances"},"content":{"rendered":"\n<p>While Albany continued to slog along toward the end of the legislative session, a perhaps not surprising twist in Washington overshadowed much of New York\u2019s politics: the public breakup between billionaire Elon Musk and President Donald Trump. The <a href=\"https:\/\/www.cnn.com\/business\/timeline-elon-musk-trump-x-dg\">first public evidence<\/a> of the developing rift was Mr. Musk\u2019s critique of the President\u2019s \u201cBig, Beautiful Bill\u201d that was approved by the House of Representatives and is under consideration by the U.S. Senate.<\/p>\n\n\n\n<p>The \u201c<a href=\"https:\/\/www.pbs.org\/newshour\/show\/breaking-down-trumps-big-beautiful-bill-and-its-impact-on-the-deficit-and-national-debt\">Big Beautiful Bill<\/a>\u201d is an attempt by the President to get his top-line fiscal policies approved by the Congress. The 1,000+ page bill would:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Extend and increase the nation\u2019s debt limit, allowing it to borrow more to pay its bills;<\/li>\n\n\n\n<li>Cut billions of dollars from federal programs, such as the Supplemental Nutrition Assistance Program (SNAP) and Medicaid, programs that provide food and health care to low income Americans; and<\/li>\n\n\n\n<li>Extend trillions of dollars in tax cuts, primarily <a href=\"https:\/\/www.theguardian.com\/us-news\/2025\/may\/24\/trump-tax-bill-analysis\">benefiting<\/a> the well off.<\/li>\n<\/ul>\n\n\n\n<p>According to the <a href=\"https:\/\/www.cbo.gov\/publication\/61461\">Congressional Budget Office<\/a> \u2013 the office that offers an independent analysis of fiscal matters before the Congress \u2013 the President\u2019s plan would increase the nation\u2019s <a href=\"https:\/\/fiscaldata.treasury.gov\/americas-finance-guide\/national-debt\/\">debts<\/a> by $2.4 trillion over the next decade.<\/p>\n\n\n\n<p>This increase in the nation\u2019s debts would represent roughly <a href=\"https:\/\/www.pbs.org\/newshour\/show\/breaking-down-trumps-big-beautiful-bill-and-its-impact-on-the-deficit-and-national-debt\">150% of the United States\u2019 gross domestic product<\/a> \u2013 the total market value of the goods and services <a href=\"file:\/\/\/C:\/Users\/russh\/Downloads\/=%20the%20total%20market%20value%20of%20the%20goods%20and\">produced<\/a> within the United States in a year.<\/p>\n\n\n\n<p>To put that in some context, after <a href=\"https:\/\/cepr.org\/voxeu\/columns\/reassessing-fall-us-public-debt-after-world-war-ii\">World War II<\/a>, the U.S. debt to GDP percentage was a bit over 100%. The President\u2019s plan \u2013 as approved by the House \u2013 would push the nation into unknown fiscal debt territory.<\/p>\n\n\n\n<p>When Mr. Musk served in the Trump Administration as its <em>de facto<\/em> leader of the \u201cDepartment of Government Efficiency (DOGE), part of its mission was to make government more efficient. In one press event in the Oval Office, Mr. Musk <a href=\"https:\/\/reason.com\/2025\/02\/12\/elon-musk-implausibly-claims-competence-and-caring-can-cut-the-federal-budget-deficit-in-half\/\">said<\/a>, \u201cIf we don&#8217;t do something about this deficit, the country&#8217;s going bankrupt\u2026.And it&#8217;s essential for America to have the resources necessary to provide things to its citizens and not simply be servicing vast amounts of debt.&#8221;<\/p>\n\n\n\n<p>Musk\u2019s concerns about the nation\u2019s finances were echoed by members of Congress, for example one New York Representative <a href=\"https:\/\/lawler.house.gov\/forms\/form\/?ID=111\">stated<\/a>, \u201cOur national debt is now over $35 trillion. As a father, it pains me to see the debt we are saddling on our children and grandchildren.\u201d Indeed, opposition to the President\u2019s plan is, at least to some extent, driven by the legislation\u2019s <a href=\"https:\/\/www.newsweek.com\/full-list-senate-republicans-who-might-vote-against-spending-bill-2080711\">failure<\/a> to reduce the nation\u2019s debt.<\/p>\n\n\n\n<p>Proponents have <a href=\"https:\/\/waysandmeans.house.gov\/2025\/02\/03\/permanently-extending-trump-tax-cuts-will-unleash-billions-in-investment-to-revitalize-americas-poor-rural-neighborhoods\/\">argued<\/a> that the tax cuts will stimulate economic activity and that will help the nation grow its way out of its fiscal plight. While it\u2019s likely that the tax cuts will stimulate the economy, it <a href=\"https:\/\/www.crfb.org\/blogs\/new-estimates-confirm-economic-growth-wont-pay-tax-cuts\">won\u2019t offset<\/a> the massive losses in revenue.<\/p>\n\n\n\n<p>There is simply no way to reduce spending in any significant way without savaging politically popular programs. Indeed, some of the <a href=\"https:\/\/www.washingtonpost.com\/health\/2025\/06\/06\/medicaid-cuts-poll-trump-big-budget-bill\/\">opposition<\/a> in the Senate is due to the House budget\u2019s planned cuts to Medicaid, which if enacted would <a href=\"https:\/\/www.cnbc.com\/2025\/06\/06\/health-insurance-coverage-losses-under-house-gop-tax-spending-bill.html\">eliminate health insurance<\/a> for millions of Americans.<\/p>\n\n\n\n<p>After World War II, the nation embarked on a strategy to eliminate its massive war debt. An important component of that was to run federal budget surpluses for many of the years following the war. By the mid-1970s, the nation had <a href=\"https:\/\/cepr.org\/voxeu\/columns\/reassessing-fall-us-public-debt-after-world-war-ii#:~:text=Thinking%20on%20this%20issue%20has,23%25%20in%20fiscal%20year%201974.\">reduced its debt<\/a> to GDP ratio to about 25%.<\/p>\n\n\n\n<p>One important component of running those surpluses was to raise taxes \u2013 particularly on the wealthy. After the war\u2019s end, the highest tax bracket was <a href=\"https:\/\/www.wolterskluwer.com\/en\/expert-insights\/whole-ball-of-tax-historical-income-tax-rates#:~:text=The%20top%20individual%20marginal%20income,37%25\">raised to 91 percent<\/a> at its peak.<\/p>\n\n\n\n<p>Starting in the mid-1960s that began to change, with a <a href=\"https:\/\/www.wolterskluwer.com\/en\/expert-insights\/whole-ball-of-tax-historical-income-tax-rates#:~:text=The%20top%20individual%20marginal%20income,37%25\">steady reduction<\/a> in the highest tax rates from 70 percent in 1965 to just under 40 percent today. Those reductions happen to <a href=\"https:\/\/itep.org\/federal-tax-cuts-in-the-bush-obama-and-trump-years\/#:~:text=Since%202000%2C%20tax%20cuts%20have,the%20tables%20in%20Appendix%20I.\">correspond<\/a> to the nation\u2019s growing debt-to-GDP.<\/p>\n\n\n\n<p>Part of the defense of slashing federal spending is the desire to reduce the mounting and unsustainable national debts. But the President\u2019s plan, at least as drafted by the House, forces those who rely on federal programs to feel the pain while allowing the well-to-do to escape any of the pain \u2013 <em>in fact the wealthy will further benefit<\/em>.<\/p>\n\n\n\n<p>How does that make sense? All Americans have a stake in the future of the nation \u2013 as was the case after fighting and winning World War II.<\/p>\n\n\n\n<p>This time a combination of a global pandemic, a financial meltdown, and tax policies that have reduced the financial burden of the wealthiest Americans, have driven the nation\u2019s debts to the worst that it has been in nearly a century.<\/p>\n\n\n\n<p>And the plan before the Congress is to make it <em>worse<\/em>.<\/p>\n\n\n\n<p>We all live in the same nation. We will all sink or swim based on the nation\u2019s decisions. Tax cuts will do nothing meaningful to help the nation\u2019s financial crisis. New Yorkers should look to their Representatives to protect the nation\u2019s financial future, not worsen it while eviscerating the U.S. safety net that protects the most vulnerable among us.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While Albany continued to slog along toward the end of the legislative session, a perhaps not surprising twist in Washington overshadowed much of New York\u2019s politics: the public breakup between billionaire Elon Musk and President Donald Trump. The first public evidence of the developing rift was Mr. Musk\u2019s critique of the President\u2019s \u201cBig, Beautiful Bill\u201d [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3190","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/3190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/comments?post=3190"}],"version-history":[{"count":2,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/3190\/revisions"}],"predecessor-version":[{"id":3192,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/3190\/revisions\/3192"}],"wp:attachment":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/media?parent=3190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/categories?post=3190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/tags?post=3190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}