Jim Lokay talks with journalist Tamar Jacoby, who recaps President Trump’s recent efforts to end the war in Ukraine. Jacoby, based in Kyiv, provides insight on what it would take to broker a deal to stop the fighting, even as Putin’s forces continue their assault on Ukraine days after his summit in Alaska.
On the 90th anniversary of Social Security, PPI’s Ben Ritz talks on News Nation about PPI’s recent proposal to award Social Security benefits based on how many years someone works rather than how much they earned throughout their career.
Since it was signed into law 90 years ago today, Social Security has become the most successful antipoverty program in American history and the foundation upon which most Americans plan their retirement. But changing demographics and policy mistakes have weakened that foundation and put the program on track for a crisis before the end of the next president’s term. Policymakers must act quickly to strengthen the program without imposing an unfair burden on vulnerable seniors or working Americans.
At its conception, Social Security was designed to be an “earned benefit” — workers pay a dedicated payroll tax on wages up to a certain level, and once these workers reach retirement age, they receive benefits to replace some fraction of the wages upon which they were taxed. But in practice, funds paid in by today’s workers are used to pay the benefits due to today’s retirees. And every year since 2010, the program has spent more on benefits than it raised in dedicated revenue because the ratio of workers to retirees is worsening as our population ages.
Unfortunately, today’s policymakers have only compounded the problem. Last year, bipartisan majorities in Congress voted overwhelmingly to give higher-income retirees already receiving public pensions the opportunity to draw more generous benefits. And earlier this year, Republicans siphoned off a portion of the program’s revenue stream in their “One Big Beautiful Bill.”
WASHINGTON — Ninety years ago this Thursday, President Franklin D. Roosevelt signed the Social Security Act into law, creating a promise that American workers could count on a measure of dignity and financial security in old age. But changing demographics, decades of political neglect, and recent policy missteps have put that promise in jeopardy, with 24% benefit cuts automatically taking effect before the end of the next president’s term if Congress fails to act.
To mark this anniversary and confront the crisis head-on, the Progressive Policy Institute (PPI) today released “Reform That Rewards Work: A New Vision for Strengthening Social Security’s Intergenerational Compact,” a sweeping proposal to rescue the nation’s most important retirement program while making it fairer, more sustainable, and more pro-work.
Authored by Ben Ritz, PPI’s Vice President of Policy Development, and Nate Morris, Fiscal Policy Fellow at PPI’s Center for Funding America’s Future, the plan would restructure Social Security’s benefit formula, modernize eligibility rules, and raise revenue with a more progressive, growth-friendly revenue system. The proposal’s key features include:
New “Work Credit” Benefit Formula: Calculate benefits based on years worked, not lifetime earnings, ensuring a low-income worker and their higher-earning boss receive the same benefit for the same number of working years.
Targeted Retirement Age Adjustments: Gradually increase the early and maximum benefit ages to reflect longer lifespans, with safeguards for lower-income and long-career workers.
Better Cost-of-Living Adjustments: Change COLAs so they no longer overstate inflation, paired with a “longevity bump” for the oldest retirees most at risk of outliving savings.
Fairer Spousal and Survivor Benefits: Strengthen protections for widows and widowers while capping excessive subsidies to high-income couples.
Generationally Fair Financing: Use a mix of progressive income tax reforms and consumption taxes to spread costs more evenly across generations, rather than using regressive payroll tax increases to make working Americans foot the whole bill for fixing a problem created by previous generations.
“Many Social Security proposals cling to the current system but break the historically important link between contributions and benefits,” said Ritz. “Our plan is unique in that it actually strengthens Social Security’s premise as a benefit people earn through work, all while improving fiscal sustainability and reducing poverty.”
According to independent modeling, the plan would close Social Security’s shortfall through a roughly even mix of benefit reforms and tax changes. Top earners would see modest benefit reductions roughly on par with those already projected to occur under current law, but many low-income and long-career workers would receive higher benefits, leading to substantial poverty reductions for older Americans.
“Any serious plan to save Social Security will involve tough tradeoffs,” said Morris. “What makes ours different is that it balances the books without balancing them on the backs of working Americans. This is the kind of radically pragmatic reform Washington needs.”
Read and download the report here.
Launched in 2018, the Progressive Policy Institute’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. To that end, the Center develops fiscally responsible policy proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, transform our tax code to reward work over wealth, and put the national debt on a downward trajectory.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
For 90 years, Social Security has served as the foundation upon which people plan for retirement in the United States. But changing demographics and decades of policy mistakes have put this vital program on unstable financial footing. Just seven years from now — before the end of the next president’s term — the program will face a crisis if no action is taken. Policymakers are running out of time to prevent disaster and give Americans the retirement security they deserve.
At its conception, Social Security was designed to be an “earned benefit” — workers pay a dedicated payroll tax on wages up to a certain level, and once these workers reach retirement age, they receive benefits to replace some fraction of the wages upon which they were taxed. The benefit formula is progressive in the sense that workers with lower incomes receive a higher replacement rate for the wages on which they paid payroll taxes, but people with higher lifetime earnings ultimately receive higher benefits. To reinforce the link between contributions and benefits, an internal “trust fund” was established to ensure that spending on benefits would track payroll taxes over time.
But this structure has broken down due to a combination of demographic and policy changes, and Social Security now spends significantly more than it raises in revenue each year. The program’s trust fund system allows Social Security to temporarily run deficits commensurate with the savings generated by past surpluses. But in 2032, Social Security’s Old Age and Survivor Insurance (OASI) trust fund is projected to be depleted, and benefits will be automatically cut by 24% to match the program’s incoming revenues. Even if lawmakers were to combine the OASI fund with Social Security’s Disability Insurance fund, they would only delay insolvency by less than two years.
The prospect of such a steep and sudden benefit cut makes it difficult for current workers to plan for retirement and risks throwing vulnerable seniors into poverty. But simply continuing to fund scheduled benefits without any changes, whether by raising payroll taxes or by borrowing money to finance Social Security’s deficits, would impose an unfair burden on working Americans to solve a problem they did not create.
Unfortunately, today’s policymakers are not only failing to solve this problem — they are actively making it worse. Recent legislation has increased Social Security’s shortfall through unfunded benefit expansions and tax cuts, both moving up the date of insolvency and increasing the size of automatic cuts that will happen when that occurs. The most popular proposals in Congress for “addressing” Social Security’s insolvency rely on gimmicks that would strain the link between contributions and benefits while exposing the federal budget to massive fiscal risk.
If policymakers are unable or unwilling to make the current Social Security system sustainable in a way that’s consistent with its founding principles, then now is the time to reimagine it from the ground up. PPI believes that lawmakers should take this opportunity to reassess Social Security’s structure and build a new model that is fairer, more pro-work, and more sustainable for the future.
Through a groundbreaking new formula developed by PPI, we propose that Social Security award benefits based on the number of years someone worked, rather than their lifetime earnings. This innovative structure cements Social Security’s status as an “earned benefit” but is far more progressive and affordable than the current formula. A low-income worker and their higher-earning boss would get the same benefit if they put in the same amount of work, and anyone who works for at least 20 years would receive a benefit that keeps them out of poverty. Parents would also receive up to five years of credit for caregiving to reflect both their hard work and their contributions to future Social Security solvency.
Our comprehensive package of benefit reforms also makes a number of other changes to improve the fairness and sustainability of Social Security spending. We propose increasing Social Security’s retirement ages to keep pace with rising life expectancies, while preserving a special early retirement age for lower-earning workers, who have not experienced the same gains in longevity. We would change cost-of-living adjustments to more accurately reflect inflation but boost benefits for the oldest beneficiaries who are most at risk of outliving their savings. We would reform spousal and survivor benefits to better protect widow(er)s from falling into poverty. And we would make the recently passed “Social Security Fairness Act” live up to its name with fair treatment of people who work both in and out of the public sector.
Under PPI’s plan, beneficiaries in the top fifth of the lifetime earnings distribution would absorb cuts relative to the current formula that are, on average, comparable to the ones already slated to occur under current law. At the same time, the majority of beneficiaries would see no reduction in their monthly benefit, and many low-income or long-career workers would even receive greater benefits than they could receive under the current formula. Altogether, PPI’s proposed reforms would close half of the program’s shortfall over the next 30 years through benefit changes while reducing old-age poverty.
PPI would close the remainder of Social Security’s shortfall through new revenue. Under the current system, in which benefits are based on a worker’s contributions, the only structurally coherent way to raise revenue is by increasing the payroll tax. But the payroll tax is regressive and depresses the wages of working Americans. By transitioning to a system that awards benefits based on years of work rather than tax contributions, there is an opportunity to transition to a more progressive and economically efficient funding structure.
PPI’s framework proposes comprehensive changes to federal payroll and income taxes paired with broad-based consumption taxes that spread the cost of fixing the nation’s fiscal challenges fairly among all Americans. We would also reform the use of trust-fund accounting to prevent structural deficits from threatening to impose another big benefits cliff in the future.
Taken together, the proposals in this blueprint offer a robust framework for radically pragmatic Social Security reform that is both generationally and politically balanced. PPI realizes that any plan that reduces scheduled benefits or increases taxes on anyone but the ultra-rich will nevertheless be politically challenging to enact. The mathematical reality, however, is that any plan to rescue Social Security will require some combination of these difficult choices. And the longer policymakers wait to admit this, the more painful the solutions will become. Now is the time to address Social Security’s shortfall in a thoughtful way that is fair to working Americans and retirees alike, giving both groups retirement security they can depend on.
As Republicans worked their way through the budget reconciliation process this year, PPI analyzed the most harmful features of the “One Big Beautiful Bill Act” (OBBBA) they eventually passed: increasing budget deficits by upwards of $4 trillion over the coming decade, regressively redistributing resources from the poorest Americans to the wealthiest, and undermining macroeconomic stability. But while these significant flaws have been widely reported, OBBBA is also littered with special interest giveaways and other problems that have received relatively less coverage. Here are five additional ways in which Trump’s signature legislative achievement is even worse than you may have realized:
1. Encourages Inaction on Reducing SNAP Error Rates
Before the bill’s passage, the federal government would pay for nearly all SNAP benefits. But under OBBBA, states will now have to pay an escalating share of SNAP costs, depending on how high their error rate is. This plan was a major sticking point for Senator Lisa Murkowski, whose vote they needed to pass the bill. Her home state of Alaska has the highest error rate in the nation, at 25%. To secure her support, Republican leaders tried to just exempt her state entirely from the cost-sharing requirements. However, after the parliamentarian ruled that this did not comply with the rules of reconciliation, Republicans decided upon a different strategy. In their new plan, any state that in 2025 or 2026 has an error rate above 13.3% would be exempt for up to two years from the requirement after its 2028 implementation.
In the short term, this provision does nothing to incentivize states to improve their SNAP error rates and, in fact, creates a perverse incentive to increase them. There are already nine states (plus the District of Columbia) above the 13.5% threshold, with another 11 only a few percentage points away. Under the new requirement, states already above the threshold have little reason to do anything to lower their error rates in the near term, while those on the margin might be incentivized to push themselves over the threshold to delay the requirement.
Even when the requirement is finally in place for every state, the law’s other changes to SNAP will hamper efforts to effectively reduce payment error rates. For example, OBBBA changes the federal government’s share of administrative costs to 25% — down from 50% under prior law — meaning that states now have to shoulder increased administrative costs associated with tracking payments, at the same time that they are being told to reduce them.
2. Expands Federal Aid for Wealthy Farmers
While the law makes large cuts to the nutrition safety net for low-income Americans, it expands the agricultural subsidies for wealthy farmers. Federal farm subsidies were already extremely regressive before the passage of this bill, with many programs’ benefits flowing mostly to the largest and wealthiest farms, which have little risk of financial failure. For example, roughly 77% of the total subsidies in the Federal Crop Insurance Program (the largest federal program) go to the top 20% of farms by crop sales.
Republicans made these subsidies even more regressive. OBBBA further increases premium support for Crop Insurance by 3-5%, offering farmers both increasingly generous premium subsidies and coverage. The law also substantially expands Price Loss Coverage, a program that makes payments to farmers when the market price of a covered crop goes below a government “reference price,” increasing reference prices for various crops between 10-20% and increasing the likelihood that farmers receive a payout. Finally, the law increases the cap on maximum payouts farmers can collect from various agricultural programs from its previous $125,000 to $155,000. At the same time, Republicans defeated a bipartisan proposal that would have meant-tested benefits and ensured that more support went to struggling farmers. In sum, the bill’s many agricultural program expansions added nearly $66 billion to the bill’s cost without making any attempt at fundamental reform.
3. Turns Back the Clock on American Energy
To offset a small portion of its new spending, OBBBA repeals the Inflation Reduction Act’s (IRA) green energy credits. But in an effort to retain support from battleground Republicans worried about ongoing projects in their state or district, the law nominally retains some of the credits for an additional few years. However, under the law’s new rules on “prohibited foreign entities,” these credits could become functionally impossible to claim, even if they remain on the books. Prohibited foreign entity rules are intended to prevent firms in nations such as China, Iran or North Korea from participating in critical supply chains or benefitting from government subsidies. While these rules have existed since the passage of the IRA, OBBBA made them far more onerous.
A company seeking to claim the credits will now be required to verify a far more expansive set of contracted firms, suppliers, and debt holders than ever before to ensure that they are not owned or operated even in part by a prohibited foreign entity. For companies that operate with long and complex supply systems, the costs of doing so could prove prohibitive at best. In addition, the law’s many vague definitions leave substantial leeway for the administration to write the rules in ways that are even more restrictive — something they explicitly promised to do at passage and have already begun to implement.
While hobbling clean energy incentives, OBBBA supercharges subsidies and tax breaks for fossil fuel producers. The bill opens up more federal land for oil and gas drilling, while decreasing the royalties that fossil fuel companies must pay to do so. Oil and gas companies received a new break, allowing them to exempt drilling costs from their income, which makes them practically exempt from the Corporate Alternative Minimum Tax. Coal producers also received a new tax break to make metallurgical coal, which is used in the production of steel, despite the fact that it is not used in U.S. steelmaking and is typically exported overseas.
These policies will make energy both less clean and more expensive for American households. According to one analysis of the law, its energy provisions alone will increase costs for the typical American household by up to $192 while cutting the deployment of clean energy in half over the next 10 years.
4. Funds Private Schools Using Taxpayer Dollars
The bill makes permanent and creates new tax benefits that will almost exclusively benefit private schools and the families that attend them. One example is the expansion of 529 college savings accounts, which disproportionately benefit the affluent households that have the most disposable income to save and are in the higher tax brackets that gain the most from its tax-free growth. OBBBA permanently extends a provision enacted in 2017 that allows parents to use 529s for elementary and secondary education tuition and expenses. But by doing nothing to address the notoriously regressive nature of 529s, this change merely helps wealthy parents pay for their child’s private school tuition tax-free.
In addition, OBBBA creates a new benefit to further funnel taxpayer resources to private schooling. Donations to “scholarship-granting institutions” – intermediary organizations that fund vouchers for students to attend private schools – will now receive a dollar-for-dollar tax credit on donations up to $1,700, meaning that a donation to these groups is essentially fully reimbursed by the federal government. This goes far beyond the income deduction granted to other charitable donations, giving private schools a massive tax advantage over other groups — such as churches, cancer research centers, or food banks — by making the donation essentially cost nothing. In addition, the credit has few guardrails to prevent abuse or even target those who would most benefit. For example, student eligibility is tied to 300% of an area’s median income, which for a family of four in many metro areas is nearly $500,000. Rather than help a low-income family pay for private schooling, the benefit could merely give a tax benefit for wealthy children who would have paid for private school anyway.
5. Strains State Budgets
In addition to blowing up the federal budget, OBBBA also places an enormous strain on state governments. The bill’s deep federal cuts to core safety net programs like Medicaid and SNAP, while nominally saving money for the federal government, mostly just push those costs onto states. According to the National Governors Association, the law’s cuts to these two programs alone would leave states with roughly $111 billion in increased costs to absorb. Most states have balanced budget requirements and operate on narrow margins, meaning that they are not equipped to handle a shock of this size without sharp benefit cuts or tax increases. As a result, Medicaid coverage could shrink, food assistance could be cut, and program administration will suffer.
The cuts will also impact state budgets in indirect ways. For example, the federal school lunch program allows communities to qualify if over a quarter of their students are enrolled in federal aid programs like SNAP or Medicaid. But if OBBBA cuts push enough families off those programs, these schools will lose eligibility, jeopardizing food access for children and requiring states to fill in the gap to ensure those children still have access to meals. Moreover, the bill’s substantial cuts to green energy credits will imperil infrastructure projects and other economic activity that would have brought tax revenue to states.
Republicans have sent their “One Big Beautiful Bill” to President Trump’s desk and it’s hard to overstate the consequences. Not only will the bill be one of the most regressive transfers of wealth from society’s poorest to its richest in recent memory, but it will also add trillions of dollars to our national debt and hurt our economy. By passing this obscene budget-busting bill with near-unanimous support from their members in Congress, Republicans have proven that their party’s deficit hawks have gone extinct.
According to analysis from the Yale Budget Lab, the bill’s deep cuts to safety-net programs such as SNAP and Medicaid will reduce annual incomes for the bottom 20% of Americans by roughly $700 per person. But the savings from these cuts won’t be used to pay down the national debt or improve the programs for the people who need them most — rather, they will help offset tax cuts that will increase average after-tax incomes for individuals in the top 1% by roughly $30,000. The bill also guts pro-growth investments in the clean energy transition while propping up coal production and other conservative special interests with new giveaways, such as expansive new aid for wealthy farmers and large tax deductions for whaling boats.
Despite the bill’s large cuts, it would add roughly $4.1 trillion to the national debt over the next ten years. Moreover, if ostensibly “temporary” policies in the bill are eventually made permanent without offset — as Republicans have made clear they had no trouble doing when writing this bill— the cost would swell to $5.5 trillion, making it more expensive than every COVID stimulus bill combined. This is not only the most expensive bill ever passed using the filibuster-proof reconciliation process, it is also the first one to permanently increase budget deficits outside the 10-year window. This unprecedented outcome was only possible because Senate Republicans effectively invoked the “nuclear option” to blow up budget enforcement mechanisms, which will open the floodgates for future Congresses to add trillions more to the national debt with barebones majorities.
The explosion of federal debt will have lasting consequences for Americans. In the short term, deficit spending by the federal government will increase by up to $632 billion in a single year, putting upward pressure on inflation rates that have remained stubbornly above the Federal Reserve’s 2% target. Increased government borrowing will also put upward pressure on already elevated interest rates, making everything from mortgages to car loans more expensive for ordinary families. Over the long term, higher rates will make it more expensive for businesses to finance new investments, slowing innovation and job creation. The federal government already spends roughly a trillion dollars each year on interest payments – more than it spends on national defense or Medicare. Now those costs will grow even faster, putting them on track to rival Social Security as the single-largest line item in the federal budget within 20 years. Instead of being used to fund investments in America’s future, taxpayer dollars will be almost exclusively used to pay for previous obligations.
Perhaps what is most remarkable is that this massive assault on our country’s fiscal integrity was only made possible by the people pretending to be its loudest defenders. For years, self-identified “deficit hawks” in the House GOP conference repeatedly called the deficit an “existential threat.” And even though they relied on completely fake growth assumptions to argue that $2.5 trillion of tax cuts would pay for themselves, these representatives insisted they would not support legislation that included any additional tax cuts without offset. They went so far as to get a commitment from House Speaker Mike Johnson that he would step down if he passed a bill that crossed this red line. Yet when the Senate sent them a bill that blatantly violated their agreement, these “fiscal hawks” quickly folded under pressure and rubber-stamped it.
Compare that to what happened just four years ago under the Biden administration. President Biden’s full “Build Back Better” agenda, while no model of fiscal responsibility, would have added less than $3 trillion to budget deficits over the first 10 years if it had been permanently enacted. Even though they used budget gimmicks to do it, Democratic deficit hawks in the House ensured the reconciliation bill advancing this agenda was scored as roughly deficit-neutral under traditional accounting. And when Democratic deficit hawks in the Senate forced party leaders to strip out those gimmicks, the bill eventually became something that actually reduced deficits. While deficit hawks may be endangered within the Congressional Democratic Party, today it is clear they are functionally extinct on the Republican side.
As President Trump’s chaotic and destructive economic policies have shaken investor confidence in the first half of 2025, the U.S. dollar has lost over 10% of its value relative to foreign currencies — the worst such decline in more than 50 years. A weaker dollar results in more expensive imports, lower spending power when traveling internationally, and higher borrowing costs for both the American people and their government.
Senate Republicans on Monday took the dangerous step of “going nuclear” to pass their One Big Beautiful Bill in violation of the rules governing the filibuster-proof reconciliation process — and the fallout will add trillions of dollars to the national debt.
The reconciliation process, which was designed to fast-track policies needed to help Congress hit its budget targets, does not allow lawmakers to increase deficits outside the 10-year scoring window. These rules have always been enforced by measuring how enacting provisions in the legislation would affect the federal budget relative to a “current law baseline,” which is a scenario defined in statute and generally assumes laws are left unchanged. Senate rules require 60 votes to waive this restriction.
Republicans couldn’t find a politically palatable way to pay for the trillions of dollars in tax cuts they wanted to make permanent, so they instead decided to make those tax cuts appear free by scoring against a “current policy” baseline, which assumes every policy in effect today is extended in perpetuity — even if the law as written would have them expire. But it gets worse: to enact new tax cuts without paying for them, Senate Republicans scheduled those provisions to expire within the 10-year window and scored them as temporary. The result is a Frankenstein scorekeeping system in which no consistent accounting is used, and legislation is assumed to cost whatever the majority wishes it did.
While the Senate GOP’s “official” score of the bill using this Frankenstein accounting shows they would reduce deficits, traditional scoring against the current law baseline would show it adding more than $4 trillion to the deficit over 10 years (including higher interest payments) — and the cost would swell to $5.5 trillion if all the “temporary” provisions were made permanent. Notably, if the bill were measured in a way that treated the scheduled expirations of both new and existing policies consistently, it would violate the rules of reconciliation by permanently increasing deficits relative to either a current policy or a current law baseline.
The Senate’s parliamentarian, who is responsible for interpreting the chamber’s rules, almost certainly would rule against the GOP’s attempt to use their Frankenstein score for enforcement purposes. Any effort to circumvent the parliamentarian’s official interpretation of the rules – whether by firing her, overruling her, or formally changing the 60-vote supermajority requirement with just 51 votes — would be invoking a “nuclear option” that fundamentally changes the character of the Senate.
Senate Republicans insist they found an alternative to going nuclear by asserting the Senate Budget Committee chairman has unilateral authority to determine scores — something they argue Senate Democrats did in their 2022 budget resolution. But the two situations are not remotely the same: Senate Democrats used their authority to consistently assume discretionary spending for both the IRS and Head Start continued at baseline levels, when the original CBO score was inconsistent. Moreover, Democrats made sure the move was blessed by the parliamentarian ahead of time, whereas Republicans actively prevented the parliamentarian from making any ruling.
The fact that Republicans prevented the parliamentarian from weighing in before voting to break their own rules with a simple majority vote, rather than overruling her directly, is a distinction without a difference. Republicans have gone nuclear with their chicanery and destroyed the Senate’s budget enforcement mechanisms.
The fallout will radiate throughout fiscal policy for years to come. Not only will the national debt be up to $5.5 trillion larger 10 years from now than it would be without the “One Big Beautiful Bill,” but there will be little to stop future Congresses from doing the same thing that Republicans did this week: adding trillions more to the debt while claiming they are doing the opposite.
Three decades ago, a president squarely focused on middle-out growth realized, much to his frustration, that the best thing to do for the nation’s working class would hurt him politically — at least in the short term. The first Democrat to be elected president after Reaganomics had blown a hole in the deficit, Bill Clinton understood that high interest rates for borrowers — small businesses, home buyers, and ordinary consumers alike — were the primary barrier to broad-based prosperity. To bring those rates down in the service of more robust growth, he would have to do something voters of almost every stripe hate: pare back the federal government’s deficit by cutting spending and raising taxes.
He did exactly that, and the economic growth that followed meant Clinton left office boasting the only federal surpluses in recent history. The lessons of his success bear heavily on the political debate today in Washington because, for the first time in 30 years, the yawning gap between federal revenues and federal outlays is poised to emerge again as the prime barrier to domestic economic growth. And yet the Trump administration’s decision to put its head in the sand on this issue with its misnamed Big Beautiful Bill threatens to cut the nation’s working-class families off at the knees.
Ben Ritz talks on The Julie Mason Show about how the “Big Beautiful Bill” would hurt GOP constituents across the country.
What’s happening with Trump’s so-called Big Beautiful Bill? Jason Furman and Ben Ritz join the podcast to discuss the long run impact the bill would have, why Republicans are so comfortable blowing up the deficit, and whether the Biden administration’s mistakes are linked to the moment we’re in now.
Ben Ritz, Director of Progressive Policy Institute’s Center for Funding America’s Future, joins the show to discuss the Moody’s downgrade, how Congress avoids tough choices on debt and deficits, and whether there is a possibility of bipartisan action to address the national debt.
WASHINGTON — Today, Ben Ritz, Vice President of Policy Development at the Progressive Policy Institute (PPI) and Director of PPI’s Center for Funding America’s Future, issued the following statement on Moody’s decision to downgrade the U.S. credit rating from AAA:
“Even as all the other major ratings agencies downgraded U.S. credit over the past 15 years, Moody’s held firm in maintaining our government’s AAA credit rating. That today even Moody’s has lost its once-unshakable confidence in the sustainability of U.S. fiscal policy is more than a canary in the coal mine: America cannot afford a ‘big beautiful bill’ with policies that would add more than $5 trillion to our national credit card over the next decade if permanently enacted. No lawmaker who supports this budget-busting boondoggle or anything like it moving forward can call themselves a ‘deficit hawk’ ever again.”
Read more PPI analysis of the “Big Beautiful Bill” and its grave fiscal consequences:
Launched in 2018, the Progressive Policy Institute’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. To that end, the Center develops fiscally responsible policy proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, transform our tax code to reward work over wealth, and put the national debt on a downward trajectory.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.
PPI warned last week that Republicans’ “Big Beautiful Bill” was shaping up to repeat and compound many of the problems that doomed Joe Biden’s “Build Back Better” plan in 2021, such as bloating the legislation with a partisan wishlist and relying on budget gimmicks to mask its outrageous costs. But as House Republicans unveiled and began marking up legislative text this week, the details proved to be even worse than anticipated.
Republican lawmakers eagerly packed their big budget bill with niche giveaways and unrelated policies. To name just a few examples: there’s a $5,000 tax credit for conservative education activists to subsidize private (often religious) school enrollment, a tax break for gym memberships that mostly benefits the wealthy, and the seemingly random addition of “MAGA” savings accounts. And that’s just the Ways and Means Committee — other committees have tacked on their own miscellaneous riders, from a partisan rewrite of the farm bill in the Agriculture Committee to a moratorium on subnational AI regulation in the Energy and Commerce Committee.
They also relied on even more budget gimmicks than expected to hide the legislation’s true cost. It was widely anticipated that Trump’s many campaign proposals, such as exempting auto loan interest payments, overtime income, and tips from income taxes, would be made temporary to lower the bill’s sticker price. But the bill included several additional tax cuts, such as an enhanced Child Tax Credit (for everyone but low-income families) and a larger standard deduction, which are also set to expire after only a few years.
In reality, Republicans don’t intend to allow any of these provisions to ever expire. They used the same tactic to reduce the scored cost of the Tax Cuts and Jobs Act (TCJA) in 2017, only to now argue that preventing the scheduled expiration of that bill’s tax cuts should cost nothing at all because they are not creating “new” tax cuts. As a result, the debt impact of Republicans’ BBB would be substantially higher than they claim. While the “official” cost of the bill’s tax cuts is roughly $3.8 trillion over 10 years, they would actually cost around $5.3 trillion — plus as much as $900 billion in interest costs — if enacted permanently.
These problems are only likely to grow worse as Republicans make changes needed to win over uncommitted votes. Blue-state Republicans in the House are demanding a far greater increase to the $10,000 cap on State and Local Tax (SALT) deductions than the $30,000 level included in the bill, which they called an “insulting” offer. A critical mass of members in both the House and Senate have opposed the bill’s rollback of clean-energy tax credits from the Inflation Reduction Act, which they say will kill emerging technologies and cost their constituents jobs. Many oppose the bill’s deep Medicaid cuts that would leave 7.6 million more Americans uninsured — with one senator referring to them as “morally wrong and politically suicidal.” Meanwhile, Conservative hardliners in both the House and Senate are still demanding deeper spending cuts that might be more fiscally responsible but could make the bill even more difficult for swing-district Republicans to support.
Ironically, Republicans are repeating the same mistakes that helped sink President Biden’s BBB plan in 2021. That bill also relied on arbitrary expiration dates to cram in a disjointed wishlist of policy priorities, even if they risked exacerbating budget deficits and inflation. As a result, the version that passed the House in 2021 lacked a clear strategy and made it easier for critical lawmakers to walk away when inflation continued to worsen. Yet Republicans have taken this playbook to an even greater extreme by proposing a bill that would add roughly three times as much to the annual budget deficit in its worst year as Biden’s BBB would have — despite the fact that inflation remains a pressing concern for voters.
If Republicans continue down this road, their BBB could very well fall apart entirely as Biden’s did. However, if they do successfully manage to jam their partisan megabill through Congress, the fallout would be substantially worse: stuffing the tax code with a myriad of giveaways, cutting critical social services for working families, and risking another round of inflation by blowing up the budget deficit – leaving Americans to pay the price for years to come.
Uncapping the SALT deduction would provide nearly three-quarters of the benefits to households making over $430,000, with an average annual tax cut of roughly $140,000 for the top 0.1% of households.
From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.
Donald Trump was elected in 2024 on a promise to “End Inflation and Make America Affordable Again.” He criticized “Joe Biden’s reckless spending spree, which is more reckless than anybody’s ever done or had in the history of our country.” And he complained that the incumbent Democrat was guilty of “weak, ineffective, and virtually nonexistent leadership.” In survey after survey, voters made clear they largely agreed with Trump’s assessment.
Perhaps no episode of Biden’s presidency better displayed the traits that fueled these criticisms than his failed effort to pass a sprawling “Build Back Better” domestic spending bill through the filibuster-proof reconciliation process in 2021. But as Congressional Republicans begin crafting a “big beautiful bill” to enact the bulk of Trump’s economic agenda through that process, there are early signs that they’re making all the same mistakes — or perhaps even more.
Although very different in their origins and ideological goals, these two BBBs have far more in common than just their initials. Both Biden’s BBB and Trump’s BBB seem crafted more to fulfill a lengthy wishlist for the president’s ideological allies than address a pressing national need. Both parties struggled to find a way to pay for these wishlists in large part because of shortsighted tax pledges their presidential nominee made during the previous campaign. Rather than right-sizing their ambitions, Republicans today are seeking to ram through their BBB using legislative tactics eerily reminiscent of those that backfired on Democrats in 2021. And both parties pursued their BBB with a cavalier disregard for their contributions to inflation, provoking voters’ ire on their top economic concern.
But there are many ways in which the 2025 Republican BBB is likely to be even more damaging — both economically and politically — by piling on debt and exacerbating inflation at a time when the country can least afford it. If Republicans continue going down this path, they risk betraying their electoral mandate to cut the cost of living and giving Democrats a perfect opportunity to regain something that’s long eluded them: public confidence on handling the economy.
House Republicans have claimed that their proposed tax cuts “will generate $2.5 trillion in additional revenue through economic growth,” but several independent analyses have found that they would actually shrink the economy over the next decade.
