One Big Beautiful Bill

Some thoughts on the One Big Beautiful Bill passing the Senate.

"The greatest advances of civilization, whether in architecture or painting, in science and literature, in industry or architecture, have never come from centralized government." - Milton Friedman

The Big Beautiful Bill passed the Senate by a 51-50 vote with Vice President JD Vance passing the deciding vote. Think the passing of the BBB highlights the hopes, fears, and goals of a number of participants. First let's take a look at the politicians.

The provision in the BBB that would strip 1.4 million illegal aliens from receiving Medicaid payments was stripped and the Republican Senators did not fight to have it put back. It is only common sense that these payments are illegal and should be stripped but the Senators were afraid it would make them look like they were cutting Medicaid or Medicare. They were afraid they were handing their Democratic challengers a talking point that could be used in commercials against them in the next election.

The Democrats, for their part, all voted against the bill because for better or worse it was decided that the future success of the party lays in increasing the voting bloc of illegal aliens. And if illegal aliens lose the ability to get "free" Medicaid payments - well they just may not have incentives to cross the border in the first place. (I think this strategy is crazy and perhaps tied to their earlier decision to tie their wagon to abortion but that's a subject for another time.)

President Trump, for his part, knew this reconciliation bill was a spending bill and that the proposed DOGE cuts were not going to be part of it. He hopes those cuts come later but now is not the time. Trump's main incentives were to get his previous tax cuts made permanent, increase military spending, and get no taxes on tips passed. That's why he's been pushing the BBB so hard.

"I'm in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible." - Milton Friedman

Speaking of taxes.

One of the reasons the bill looks so expensive is that the CBO (Congressional Budget Office) used the higher tax rate which was supposed to go into effect at the end of the year. But the BBB, in effect cuts the tax rate, even though it is just extending the Trump tax cuts.

Many on the left are painting the BBB as just "cutting taxes for the rich" when in effect it is really a tax cut for the working man and woman. Ask yourself when's the last time you heard a billionaire excited about having no taxes on tips going forward?

The flip side is the non-working man or woman - and we'll assume they are US citizens because paying benefits meant for citizens that are funded by taxpayer dollars to illegal aliens is a crime. This, in part, is why the Senators punted enforcement to Kristi Noem to kick off and (hopefully) prosecute those 1.4 million illegals receiving Medicaid. That reduces the costs of the program and may look like a cut but in reality is just reducing fraud.

"Higher taxes never reduce the deficit. Governments spend whatever they take in and then whatever they could get away with." - Milton Friedman.

The two loudest critics of the spending in the BBB were Senator Rand Paul from Kentucky and Elon Musk. It's hard to argue that either was wrong either. The BBB did greatly expand spending and did raise the debt ceiling, prompting Elon to comment:

"Hitting the debt ceiling is the only thing that will actually force the government to cut waste and fraud. That's the why debt ceiling legislation exists!" - Elon Musk

Again - he's right but political realists know that the other option is just to raise the debt ceiling which is what the BBB does.

Ronald Reagan is viewed as one of the greatest Presidents in modern history and he accomplished his greatness in large part by strengthening the military and lowering taxes - the two very things the BBB achieves for President Trump. Sure Reagan increased the national debt to do this but he didn’t have an Elon Musk helming a DOGE.

The time for cuts will come soon. And so will Musk’s Presidential Medal of Freedom because that’s the least Donald Trump and a grateful nation can do.

Now it’s up to the House to finish the job on the One Big Beautiful Bill.