Trump gets major win now — but it comes with risks down the road

Don­ald Trump has his first major leg­isla­tive vic­to­ry of his sec­ond pres­i­den­tial term.

The “big, beau­ti­ful bill”, as he calls it, is a sprawl­ing pack­age that includes many key pieces of his agen­da – deliv­er­ing on promis­es he made on the cam­paign trail. 

It also, how­ev­er, con­tains the seeds of polit­i­cal per­il for the pres­i­dent and his par­ty.

That Trump and his team were able to shep­herd the leg­is­la­tion through Con­gress despite nar­row majori­ties in both the House of Rep­re­sen­ta­tives and the Sen­ate is no small achieve­ment. 

His suc­cess required him and his allies to win over bud­get hawks with­in his Repub­li­can Par­ty who were intent on slash­ing gov­ern­ment spend­ing, as well as cen­trists who were wary of cuts to social pro­grammes.

When this con­gres­sion­al ses­sion start­ed in Jan­u­ary, there were doubts about whether House Repub­li­cans could even agree to return Con­gress­man Mike John­son to the speak­er’s chair, let alone agree on major pieces of leg­is­la­tion.

Agree they did, how­ev­er – as did Repub­li­cans in the Sen­ate, a noto­ri­ous­ly unwieldy cham­ber.

• Con­gress pass­es Trump’s ‘big, beau­ti­ful bill’
• A look at the key items in the leg­is­la­tion
• Fact-check­ing three claims about the bill

The spend­ing pack­age approved by law­mak­ers directs about $150bn (£110bn) in new spend­ing for bor­der secu­ri­ty, deten­tion cen­tres and immi­gra­tion enforce­ment offi­cers. Anoth­er $150bn is allo­cat­ed for mil­i­tary expen­di­tures, includ­ing the pres­i­den­t’s “gold dome” mis­sile defence pro­gramme.

The real­ly big num­bers, how­ev­er, are in the tax cuts in this leg­is­la­tion. They amount to more than $4.5tn over 10 years. 

Some of these are cuts that were first enact­ed in Trump’s first term, and were set to expire before the bill makes them per­ma­nent. Oth­ers, like end­ing tax­es on tips and over­time, where 2024 cam­paign promis­es that are imple­ment­ed by will end in 2028.

All this adds up to mas­sive new debt for the US. The White House con­tends that the tax cuts will spur eco­nom­ic growth that will gen­er­ate suf­fi­cient new rev­enue, when tak­en along­side tar­iff col­lec­tions. 

But out­side pro­jec­tions sug­gest that this leg­is­la­tion will add more than $3tn in new US debt.

As crit­ics like Repub­li­can Sen­a­tor Rand Paul of Ken­tucky have point­ed out, the leg­is­la­tion rais­es the amount of new debt the fed­er­al gov­ern­ment can issue by $5tn – a step that would not be nec­es­sary if the White House tru­ly believed their bud­get pro­jec­tions.

Paul and oth­ers like tech multi­bil­lion­aire Elon Musk have warned that this mas­sive amount of debt will be grow­ing bur­den on the fed­er­al gov­ern­ment, as inter­est pay­ments crowd out oth­er spend­ing and dri­ve up inter­est rates. A fis­cal reck­on­ing is com­ing, they warn.

Anoth­er sen­a­tor who vot­ed against the leg­is­la­tion, Thom Tillis of North Car­oli­na, had a dif­fer­ent warn­ing for Trump and his par­ty. In a fiery speech on the floor of the cham­ber, he accused the pres­i­dent of break­ing a promise to those who sup­port­ed him — cit­ing the bil­l’s cuts worth approx­i­mate­ly $1tn to Med­ic­aid, a gov­ern­ment-run health insur­ance pro­gramme for low-income Amer­i­cans.

“Repub­li­cans are about to make a mis­take on health­care and betray a promise,” he said, declar­ing that more than 660,000 peo­ple in North Car­oli­na would be “pushed off” Med­ic­aid.

A year after Trump made inroads with work­ing-class Amer­i­cans, includ­ing minor­i­ty vot­ers who tra­di­tion­al­ly have sup­port­ed oppos­ing Democ­rats, his leg­is­la­tion will cause near­ly 12 mil­lion Amer­i­cans to lose Med­ic­aid cov­er­age in the next 10 years, accord­ing to the non-par­ti­san Con­gres­sion­al Bud­get Office.

Democ­rats are already prepar­ing an onslaught of attacks against Repub­li­cans for what they say is leg­is­la­tion that cuts social ser­vice in order to pro­vide tax cuts to wealth­i­er Amer­i­cans. 

Although those cuts won’t come into effect until after next year’s con­gres­sion­al midterm elec­tions, Democ­rats will try to remind Amer­i­can vot­ers of the con­se­quences the deci­sions Repub­li­cans made over the past few weeks.

Trump is prepar­ing what should be a cel­e­bra­to­ry bill sign­ing cer­e­mo­ny on 4 July — Amer­i­can Inde­pen­dence Day — and will tout his abil­i­ty to gov­ern not just through exec­u­tive order, but also through enact­ing new law.

But the fight to define the ben­e­fits – and con­se­quences – of this bill is just begin­ning.