One Big Fiasco

Our new book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. Trump and his congressional supporters are on track to blow up the federal debt.

CBO:

The Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) previously reported that H.R. 1, the One Big Beautiful Bill Act, as passed by the House of Representatives on May 22, would increase the primary deficit by $2.4 trillion over the 2025-2034 period.[1] That estimate reflects a $3.7 trillion reduction in revenues and a $1.3 trillion reduction in noninterest outlays.[2] It does not account for how the bill would affect the economy.

Under House Rule XIII(8), H.R. 1 is classified as major legislation and CBO and JCT are required, to the extent practicable, to account for the budgetary effects of changes in the economy resulting from the bill. CBO and JCT have now had time to complete that analysis and estimate the following relative to CBO’s January 2025 baseline:

• The economic effects of H.R. 1 would decrease the primary deficit by $85 billion over the 2025-2034 period, primarily reflecting an increase in economic output; and
• The bill would increase interest rates, which would boost interest payments on the baseline projection of federal debt by $441 billion.

Accounting for those budgetary effects, CBO’s estimate under House Rule XIII(8) is that H.R. 1 would increase deficits by $2.8 trillion over the 2025-2034 period (see Table 1).

First time I've seen a tax cut so poorly designed that the dynamic score RAISES the cost by $356 billion.

The infinitesimal growth revenues are dwarfed by the rising inflation and $441 billion in interest costs from higher interest rates. pic.twitter.com/mIfvIG7Qfd

— Jessica Riedl 🧀 🇺🇦 (@JessicaBRiedl) June 17, 2025

Trump v. Musk

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.

CBO estimates that debt-service costs under H.R. 1, the One Big Beautiful Bill Act, would total $551 billion over the 2025–2034 period—increasing the bill's cumulative effect on the deficit to $3.0 trillion.

AP:

President Donald Trump said Thursday he’s “disappointed” with Elon Musk after his former backer and advisor lambasted the president’s signature bill.

Trump suggested the world’s richest man misses being in the White House and has “Trump derangement syndrome.”

The Republican president reflected on his breakup with Musk in front of reporters in the Oval Office as Musk continued a storm of social media posts attacking Trump’s “Big Beautiful Bill” and warning it will increase the federal deficit.

“I’m very disappointed in Elon,” Trump said. “I’ve helped Elon a lot.”

Musk has called Trump’s big tax break bill a “disgusting abomination.”

Annie Karni and Theodore Schleifer:

House Republicans suddenly find themselves scrambling to mollify Elon Musk, who has been venting his rage at them for voting for a Trump-backed domestic policy bill he calls a “disgusting abomination.”

After Mr. Musk threatened to “fire all politicians who betrayed the American people,” Republicans from Speaker Mike Johnson on down are trying to manage an unmanageable tech billionaire who has become one of the most powerful figures in Republican politics.

Even as Mr. Johnson insisted at a news conference on Wednesday that “policy differences are not personal,” he admitted that Mr. Musk’s hard turn against the bill had come as a surprise given the “happy texts” they had shared 24 hours earlier. Mr. Johnson said he had tried again to talk to Mr. Musk but could not get through.

“I called Elon last night, and he didn’t answer, but, uh, hope to talk to him today,” he said.

Such ingratitude

— Elon Musk (@elonmusk) June 5, 2025

One Big Beautiful Bill Act and Liberation Day, Continued

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.  His reconciliation bill will blow up the debt and his trade policies will blow up the economy.

 The Joint Committee on Taxation looks at "The One Big Beautiful Bill Act."

The Joint Committee staff estimates that enacting these provisions would increase the 
average annual growth rate of real Gross Domestic Product (“GDP”) by 0.03 percentage points, from 1.83 percent in the present-law baseline to 1.86 percent, over the 2025-2034 budget window. The Joint Committee staff estimates that the macroeconomic effects due to this proposal would increase Federal revenues by about $103 billion. Relative to the conventional revenue effect of about -$3,819 billion, the Joint Committee staff estimates that the proposal would have a total revenue effect of about -$3,716 billion over the budget window.

The Joint Committee staff also estimates that after the budget window, cumulative  increases in Federal deficits under the proposal will continue to increase Federal debt as a
percentage of GDP relative to the present-law baseline. While the Joint Committee staff
estimates that labor supply will continue to be higher than projected in the baseline, the growth in Federal debt will increasingly crowd out private investment, reducing the capital stock relative to the baseline. The long-run effect on real GDP remains positive at first—primarily over the second decade following enactment—driven by labor supply effects. However, by the third decade, the crowding-out effect dominates, and real GDP falls below baseline projections. As a result, the budgetary feedback from the macroeconomic effects of the proposal diminishes over time.

From CBO:

Tony Romm and Colby Smith at NYT:

One day after House Republicans approved an expensive package of tax cuts that rattled financial markets, President Trump pivoted back to his other signature policy priority, unveiling a battery of tariff threats that further spooked investors and raised the prospects of higher prices on American consumers.

For a president who has fashioned himself as a shrewd steward of the economy, the decision to escalate his global trade war on Friday appeared curious and costly. It capped off a week that saw Mr. Trump ignore repeated warnings that his agenda could worsen the nation’s debt, harm many of his own voters, hurt the finances of low-income families and contribute far less in growth than the White House contends.

The tepid market response to the president’s economic policy approach did little to sway Mr. Trump, who chose on Friday to revive the uncertainty that has kept businesses and consumers on edge. The president threatened 50 percent tariffs on the European Union, and a 25 percent tariff on Apple. Other tech companies, he said, could face the same rate.

Since taking office, Mr. Trump has raced to enact his economic vision, aiming to pair generous tax cuts with sweeping deregulation that he says will expand America’s economy. He has fashioned his steep, worldwide tariffs as a political cudgel that will raise money, encourage more domestic manufacturing and improve U.S. trade relationships.


But for many of his signature policies to succeed, Mr. Trump will have to prove investors wrong, particularly those who lend money to the government by buying its debt.

So far, bond markets are not buying his approach. Where Mr. Trump sees a “golden age" of growth, investors see an agenda that comes with more debt, higher borrowing costs, inflation and an economic slowdown. Investors who once viewed government debt as a relatively risk-free investment are now demanding that the United States pay much more to those who lend America money.

That is on top of businesses, including Walmart, that say they may have to raise prices as a result of the president’s global trade war. The onslaught of policy changes has also left the Federal Reserve frozen in place, unsure as to when the economy will call for lower interest rates in the face of persistent uncertainty. As a result, borrowing costs for mortgages, car loans and credit cards remain onerous for Americans.

Moody's Blues

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. Trump and his congressional supporters are on track to blow up the federal debt.

Tony Romm,Andrew Duehren and Joe Rennison at NYT:

The credit rating of the United States received a potentially costly downgrade on Friday, as the ratings firm Moody’s determined that the government’s rising debt levels stood to grow further if Republicans enact a package of new tax cuts.

The downgrade, to one notch below the highest triple-A rating, amounted to a repudiation of Washington, where President Trump only hours earlier had pushed his party to adopt a legislative package that might add trillions of dollars to the nation’s fiscal imbalance.

The downgrade from Moody’s means that each of the three major credit rating agencies no longer gives the United States its best rating. Fitch downgraded the United States in 2023, citing fiscal concerns, and Standard & Poor’s downgraded the country in 2011.

The new rating decrease could send ripple effects throughout the economy if it prompts investors to demand higher payments on bonds, which in turn could raise consumers’ borrowing costs. So far, though, past downgrades have proved largely symbolic, as the American government’s debt remains the bedrock of the global financial system.

DOGE Debacle

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start. Trump and his congressional supporters are on track to blow up the federal debt.

 Jessica Riedl at The Atlantic:

These spending data do not flatter the Musk project. Total federal outlays in February and March were $86 billion (or 7 percent) higher than the levels from the same months a year ago, when adjusted for timing shifts. This spending growth—approximately $500 billion annually—continues to be driven by the three-quarters of federal spending allocated to Social Security, Medicare, Medicaid, defense, veterans’ benefits, and interest costs. These massive expenses have been untouched by DOGE’s focus on small but controversial targets such as DEI contracts and Politico subscriptions.

...

Cost reductions from laying off federal employees have been too small to show up in the data. This is not surprising, because even laying off one quarter of the 2.3 million federal civilian employees would shave off just 1 percent of federal spending. To be fair to DOGE, more savings will materialize in October, when the salaries of the 75,000 federal employees who took a buyout come off the books. That should save Washington $10 billion a year, or 0.1 percent of federal spending—except even that is an overestimate, because Washington will surely end up hiring contractors to perform at least some of the work previously handled by those civil servants, and many contractors cost more than employees.

That, by the way, is the good news for DOGE. The bad news is that the project seems quite likely to expand long-term budget deficits. Slashing IRS enforcement will embolden tax evasion and reduce revenues by hundreds of billions of dollars over the decade. Laying off Department of Education employees who ensure collection of student-loan repayments will increase the deficit. Illegally terminated federal employees are already being reinstated with full back pay, leaving the government with little to show for its trouble besides mounting legal fees.

Even if DOGE somehow manages to end up in the black, any modest savings it achieves will be completely overwhelmed by the GOP’s push to expand the 2017 tax cut at a cost of roughly $500 billion annually. Claims that Washington can no longer afford to spend 0.1 percent of its budget providing lifesaving HIV treatments to 20 million impoverished Africans cannot be taken seriously when the administration and Congress are preparing to cut taxes and expand other spending by trillions of dollars.

 

Trump-o-nomics Will Blow Up the Debt

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.

Peter G. Peterson Foundation:

New analysis released today from the nonpartisan Congressional Budget Office (CBO) shows deficits doubling and debt skyrocketing under a scenario where the expiring provisions of the Tax Cuts and Jobs Act (TCJA) were made permanent. If interest rates were also higher than projected, a second scenario shows that the United States would incur even worse fiscal damage.

CBO finds that:

1. If provisions of the TCJA were made permanent (and there were no other changes to fiscal policy), debt held by the public (DHBP) would reach 214 percent of gross domestic product (GDP) in 2054 — 47 percentage points higher than under the baseline scenario in which the provisions expire as scheduled and well above the level in 2024 of 98 percent of GDP.
2. Making those provisions permanent would lead to a near-doubling of the annual deficit relative to GDP — from 6.3 percent this year to 12.3 percent in 2054.
3. In addition, if interest rates also increased each year until they were higher than projected by 1 percentage point, DHBP would exceed 250 percent of GDP within 30 years. Macroeconomic feedback effects would further increase interest rates and, therefore, lead to even worse fiscal outcomes. Such findings demonstrate the sensitivity of the nation’s finances to borrowing costs.

But wait, there's more!

Jacob Bogage at WP:

Senior tax officials are bracing for a sharp drop in revenue collected this spring, as an increasing number of individuals and businesses spurn filing their taxes or attempt to skip paying balances owed to the Internal Revenue Service, according to three people with knowledge of tax projections.

Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024, said the people, who spoke on the condition of anonymity to share nonpublic data. That would amount to more than $500 billion in lost federal revenue; the IRS collected $5.1 trillion last year. For context, the U.S. government spent $825 billion on the Defense Department in fiscal 2024.

Trump Does Not Care About the Debt

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. It notes that neither candidate talked a lot about specific deficit reduction plans.

Lachlan Markay and  Asawin Suebsaeng, Daily Beast, Dec. 5 2018 10:32AM EST:

Since the 2016 presidential campaign, Donald Trump’s aides and advisers have tried to convince him of the importance of tackling the national debt.

Sources close to the president say he has repeatedly shrugged it off, implying that he doesn’t have to worry about the money owed to America’s creditors—currently about $21 trillion—because he won’t be around to shoulder the blame when it becomes even more untenable.

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the national debt in the not-too-distant future. In response, Trump noted that the data suggested the debt would reach a critical mass only after his possible second term in office.

“Yeah, but I won’t be here,” the president bluntly said, according to a source who was in the room when Trump made this comment during discussions on the debt.

Catie Edmondson and Andrew Duehren at NYT:

While Republicans have traditionally agitated for less government spending, Mr. Trump has displayed a laissez-faire attitude toward cutting costs and proposed a number of policies that would actually increase the nation’s debt.

Some Republicans have privately made it clear that they’d rather not include some of Mr. Trump’s most expensive proposals in the legislation, especially as they battle concerns from hard-right Republicans that the bill will cost too much.

But Mr. Trump has personally been lobbying lawmakers on some of the issues he campaigned on. In a private meeting with Republican congressional leaders in the Cabinet Room at the White House on Wednesday, he urged them to implement his campaign promise to eliminate taxes on tips.

He told them repeatedly that he saw the move as a winning issue, according to two people familiar with his comments who were not authorized to discuss the private meeting.

Of the suite of tax cuts Mr. Trump proposed during the campaign, terminating taxes on tips has gained the most traction on Capitol Hill. The idea won bipartisan support during the campaign, and Republican aides are working on legislation that would translate the “no tax on tips” slogan into policy that won’t kick off a gold rush of tax avoidance.

There are several other promises Republicans would rather avoid. Free traders on Capitol Hill have particularly bristled at Mr. Trump’s vows to enact across-the-board tariffs. While the president has the authority to unilaterally impose tariffs, some Republicans have studied the possibility of imposing tariffs through law — an idea that quickly proved unpopular within the party.

Health and the Deficit

Our forthcoming book is The Comeback: The 2024 Elections and American Politics. It notes that neither candidate talked a lot about specific deficit reduction plans.


Meredith Lee Hill at Politico:

House Republicans in competitive districts warned GOP leaders Thursday: We could lose our seats if you gut Obamacare to pay for a massive border, energy and tax bill.

A group of about a dozen centrist Republicans delivered the message in a meeting with GOP Whip Tom Emmer (R-Minn.) and other senior lawmakers, according to four Republicans familiar with the meeting who were granted anonymity to speak frankly. GOP members are already concerned that they’re poised to lose their trifecta and a swath of seats in the 2026 midterms — they worry GOP efforts to pare back the Affordable Care Act could pour fuel on the fire.

Hans Nichols at Axios:

GOP tax writers are gathering support for creative ways to make the price tag $0 for extending Trump's 2017 tax cuts.

Why it matters: The procedural and budgetary gambit will free Republicans from the burden of finding the $4 trillion in spending cuts. But deficit hawks, including member of the House Freedom Caucus, haven't completely signed off on the novel approach.

Zoom in: Scott Bessent, Trump's nominee for Treasury secretary, has privately indicated to senators that he's sympathetic to their view that the cost of extending the 2017 tax cuts should be zero, according to people familiar with the matter.

By the numbers: Under a "current law baseline," extending Trump's personal and estate tax cuts will cost $4 trillion over 10 years.The tax cuts expire at the end of 2025, and the Congressional Budget Office has to score how much revenue the Treasury will miss if Congress passes it for another 10 years.

But what if Congress runs the numbers from a different starting point, and considers "current policy"?

Current policy has the tax cuts in place (at least until the end of the year). Among friends, say Republicans, what if we use current policy as the baseline? Then extending the tax cuts will cost … zero.

Election Forecasts

 Our most recent book is titled Divided We Stand: The 2020 Elections and American Politics.  Among other things, it discusses the politics of economic policy

🇺🇸 The Fiscal Impact of the Harris and Trump Campaign Plans 🇺🇸

Our comprehensive analysis breaks down the presidential candidates' tax and spending plans and what they would mean for the #NationalDebt.

Under our central estimate, we find:

➡️ Vice President Harris would add… pic.twitter.com/bhnZEbwiPJ

— CRFB.org (@BudgetHawks) October 7, 2024

Simon Kuper at The Financial Times

In 2016, I was one of the fools who thought people wouldn’t vote for Donald Trump. As I explained to readers before the Republican primaries, “The electorate generally just wants a leader who appears sane, which is why Republicans almost certainly won’t nominate Trump.” I was taking my lead from so-called experts. “If you want to know the future,” I wrote in May that year, “the best forecasters are betting markets . . . The Oddschecker website, which compares odds offered by different bookmakers, indicates a chance of just over one in four that Brits will opt for Brexit. The chances of Trump becoming American president or Marine Le Pen French president are judged a tad smaller.” This time, I won’t be making election forecasts. When you are wrong, you need to ask why — especially when you face a similar situation again. Perhaps I’m an out-of-touch elitist who doesn’t understand the suffering of ordinary people, but I’ve come to a different conclusion. In 2016, I still mistakenly believed that most voters were economically motivated, self-interested rationalists. The “rational actor” turns out to be a rare beast.

Justin Grimmer at Politico:

Are these calculated probabilities any good? Right now, we simply don’t know. In a new paper I’ve co-authored with the University of Pennsylvania’s Dean Knox and Dartmouth College’s Sean Westwood, we show that even under assumptions very favorable to forecasters, we wouldn’t know the answer for decades, centuries, or maybe even millenia.

...

The reason it takes so long to evaluate forecasts of presidential elections is obvious: There is only one presidential election every four years. In fact, we are now having only our 60th presidential election in U.S. history.

Compare the information available when forecasting presidential elections to the amount of information used when predicting stock prices, forecasting the weather or targeting online advertising. In those settings, forecasters commonly use millions of observations, which might be collected almost continuously. Given the difference, it isn’t surprising that forecasters in other settings are more easily able to identify the best performing model.

The paucity of outcome data means that election forecasters have to make educated guesses about how to build their statistical models.

 

Tentative Debt Deal

Our recent book is titled Divided We Stand: The 2020 Elections and American Politics.  Among other things, it discusses the state of the parties. The state of the GOP is not good. 

 Jordan Weissman at Semafor:

President Biden and House Speaker Kevin McCarthy announced Saturday night that they had reached a deal to raise the debt ceiling and avert a catastrophic federal default with a bit over a week to go before the deadline.

Afterwards, a quick consensus formed among much of the right and left: Republicans got blanked.

The agreement would temporarily freeze a portion of non-defense spending, while temporarily tightening the food stamp program’s work requireme​​nts for childless adults, and enacting modest changes to Temporary Assistance for Needy Families.

The early details prompted furious reactions from members of the hard-right House Freedom Caucus, who’d hoped to extract vastly more sweeping budget cuts and changes to the federal safety net in return for hiking the borrowing limit.

“This ‘deal’ is insanity,” tweeted South Carolina Rep. Ralph Norman. “A $4T debt ceiling increase with virtually no cuts is not what we agreed to.” North Carolina Rep. Dan Bishop tweeted a vomiting emoji after a GOP conference call, and complained about “RINOs congratulating McCarthy for getting almost zippo.”

House GOP Problems

Our recent book is titled Divided We Stand: The 2020 Elections and American Politics.  Among other things, it discusses the state of the parties. The state of the GOP is not good. 

“McCarthy also proposed stiffening work requirements for benefit programs like SNAP… That, likewise could hit Republican-leaning states harder: 3.1% of the population in those states could lose benefits, compared with 2.8% of residents in Biden states.”https://t.co/LqKXQJzq2e

— Jesse Lee (@JesseLee46) April 17, 2023

Marianna Sotomayor and Leigh Ann Caldwell at WP:

“Everybody is going to be looking at each other much more suspiciously now,” said a Republican aide who spoke on the condition of anonymity to discuss internal party dynamics. “It’s going to be much harder to do things.”

House Republicans have had some success, pushing through several bills that put Democrats on the record and were signed into law by President Biden, including those to declassify information pertaining to covid-19, end the covid national emergency and block a local D.C. crime bill from going into effect.

But Republicans’ first 100 days in the majority have been comparatively less productive than some previous Congresses. They have so far passed only a few of their top priorities, including an energy bill and voting to rescind money for IRS staffing — neither of which will be voted on in a Democratic-controlled Senate. Republicans point to the protracted speaker’s fight and slow organizing of the Congress to explain the sluggish start on the legislative front.

 Karlyn Bowman at AEI:

The difficulty Washington will have dealing with the deficit and entitlement spending going forward was clear in several questions in the Fox News poll. When asked which of two things was most important to them, 26 percent said reducing the budget deficit, while 71 percent said continuing to fund entitlement programs such as Social Security and Medicare at their current levels was. In separate questions, 21 percent said the funding of Social Security was a crisis (43 percent a major problem), and 28 percent gave that response about the national debt (50 percent a major problem). Only 16 percent supported reducing future Social Security benefits for some future retirees.

Joseph Zeballos-Roig at Semafor:

But new polling from Data for Progress, provided first to Semafor, suggests Americans are cold on the concept. It finds that about 65% of likely voters are against lifting the retirement age for people in their 20s, compared to 27% who support it. Among self-identified GOP voters, the split is similar: 59% are opposed and only 32% are in favor.

The Data for Progress poll also looked specifically at three swing districts in New York, where GOP gains in 2022 helped the party take back control of the House. In one of the districts, just 20% supported raising the retirement age to 70 for future generations. In the other two, less than 10% supported it.

Fiscal Politics 2023

Our most recent book is titled Divided We Stand: The 2020 Elections and American Politics.  Among other things, it discusses the politics of economic policy.

CBO Director Phillip L. Swagel:.

Regarding the debt ceiling, the limit on debt of $31.4 trillion was reached on January 19th of this year. The Treasury then began to take well-established “extraordinary measures” to borrow additional funds. We project that, if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will be exhausted between July and September 2023.

The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from our projections. In particular, income tax receipts in April could be more or less than we estimate. If those receipts fell short of estimated amounts—for example, if capital gains realizations in 2022 were smaller or if U.S. income growth slowed by more in early calendar year 2023 than we project—the extraordinary measures could be exhausted sooner, and the Treasury could run out of funds before July.

If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully. As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both.

Conclusion

I will close with three key takeaways from our analysis.

• For 2023, we project stagnant output, rising unemployment, gradually slowing inflation, and interest rates that remain at or above their levels at the beginning of the year—before the economy subsequently rebounds.
• Noninterest spending substantially exceeds revenues in our projections even though pandemic-related spending lessens. In addition, rising interest rates drive up the cost of borrowing. The resulting deficits steadily increase the government’s debt.
• Over the long term, our projections suggest that changes in fiscal policy must be made to address the rising costs of interest and mitigate other adverse consequences of high and rising debt.

Trump's Legacy, in Numbers

In Defying the Odds, we discuss Trump's dishonesty and his record of disregarding the rule of law.  

Trump claimed credit for the Dow hitting the "sacred" number of 30,000.  At WP, Catherine Rampell notes some other numbers:

• 261,000 (and growing): If anything is “sacred,” it is human life. This number is the minimum tally of U.S. lives lost to the novel coronavirus as of Wednesday night. By the time Trump leaves office it will be higher. Even by Thanksgiving morning, it will be higher.
• $750: The amount Trump reportedly paid in federal income taxes the year he won the presidency. He paid the same amount his first year in the White House, too.
• 14.7 percent: The unemployment rate in April 2020. Also the highest unemployment rate on record since modern statistics on joblessness began in 1948 and likely the highest rate since the Great Depression.
• $421 million: The amount of loans and other debts for which Trump is personally responsible, with most of it reportedly coming due within four years — that is, a period when Trump had hoped to serve his second presidential term.
• 100.1 percent: Federal debt held by the public as a share of gross domestic product, in the fiscal year that recently ended, according to the Congressional Budget Office. The last time this measure exceeded 100 percent was just after World War II.
• $1.9 trillion: The 10-year cost of Trump’s 2017 tax cut. (This is “dynamic” cost — that is, it accounts for the effects of economic growth.) This contributes to the debt number above.
• $130,000: The amount Trump paid an adult-film actress with whom he had an affair; this bought her silence ahead of the 2016 election.
• 26: The number of women who have publicly accused Trump of sexual misconduct.
• 26 million: The number of American adults who reported that their household didn’t have enough to eat just ahead of Election Day.
• Eight: The number of Trump associates to date charged with or convicted of criminal offenses. The former aides and advisers are: onetime 2016 campaign chairman Paul Manafort; 2016 deputy campaign chair Rick Gates; former national security adviser Michael Flynn, whom Trump pardoned Wednesday; foreign policy adviser George Papadopoulos; informal Trump foreign policy adviser George Nader; political adviser Roger Stone; personal attorney Michael Cohen; and strategist Stephen K. Bannon.
• 666: The number of separated migrant children whose parents still have not been found, because the Trump administration didn’t keep sufficient records.
• 23,035: The number of false or misleading claims Trump had made as of mid-September, according to the Washington Post Fact Checker team. Presumably that number will continue to grow during Trump’s final weeks in office.
• $3: The amount that Trump’s Mar-a-Lago Club charged taxpayers for a glass of water served to Trump.
• 289: The number of times Trump visited a golf course while president. So far.
• 15: The number of times that people have to flush their toilet, according to Trump. (Why he made this claim on the campaign trail I do not know.)
• One: The number of viewers Trump officials sought to reach during their TV appearances (the infamous “audience of one”).
• 49 percent: The peak share of Americans who said they approved of Trump’s performance as president, according to Gallup.
• 306: The number of electoral college votes Trump won in 2016, which he called a “landslide.”
• 306: The number of electoral college votes Joe Biden won in 2020.

Very Bad Numbers

In Defying the Odds, we discuss the 2016 campaign. The 2019 update includes a chapter on the 2018 midterms. The 2020 race, the subject of our next book, is well underway.   

Coronavirus presents unprecedented challenges to public policy and the electoral process.

Families USA:

• Because of job losses between February and May of this year, 5.4 million laid-off workers became uninsured. 
• These recent increases in the number of uninsured adults are 39% higher than any annual increase ever recorded. The highest previous increase took place over the one-year period from 2008 to 2009, when 3.9 million nonelderly adults became uninsured.
• Nearly half (46%) of the increases in the uninsured resulting from the COVID-19 pandemic and economic crash have occurred in five states: California, Texas, Florida, New York, and North Carolina.
• In eight states 20% or more of adults are now uninsured: Texas, where nearly three in ten adults under age 65 are uninsured (29%); Florida (25%); Oklahoma (24%); Georgia (23%); Mississippi (22%); Nevada (21%); North Carolina (20%); and South Carolina (20%). All but Oklahoma are also among the 15 states with the country's highest spike in new COVID-19 cases during the week ending on July 12.
• Five states have experienced increases in the number of uninsured adults that exceed 40%: Massachusetts, where the number nearly doubled, rising by 93%; Hawaii (72%); Rhode Island (55%); Michigan (46%); and New Hampshire (43%).
• No federal COVID-19 legislation signed into law has attempted to restore or preserve comprehensive health insurance, which improves health outcomes, limits financial insecurity, and promotes economic recovery. Federal lawmakers can fill that gap in the next COVID-19 bill.

Kate Davidson at WSJ:

The U.S. budget deficit reached $3 trillion in the 12 months through June as stimulus spending soared and tax revenue plunged, putting the federal government on pace to register the largest annual deficit as a share of the economy since World War II.

As a share of gross domestic product, the 12-month deficit came to 14% last month, compared with 10.1% in February 2010, when the U.S. was still recovering from the last recession. In June alone, the deficit widened to a monthly record of $864 billion, the Treasury Department said Monday—nearly as much as the gap for the entire previous fiscal year, which totaled $984 billion.

The Congressional Budget Office has projected the annual deficit could total $3.7 trillion in the fiscal year that ends Sept. 30. But the gap could widen even further if Congress and the White House agree later this month on another round of emergency spending, which economists argue is vital to keep households and businesses afloat until the economy begins to recover.

Darkening Economic Skies

In Defying the Odds, we discuss the tax and economics issue in the 2016 campaign.  The update  -- recently published --includes a chapter on the 2018 midterms. and explains why the Trump tax cut backfired on Republicans.

James Pethokoukis at The Week:

Just take a look at the September jobs report, out Friday. Although the unemployment rate dipped to a 50-year low, the report also showed that both job and wage growth have slowed. JPMorgan economist Michael Feroli called it a "labor market in a controlled descent." Meanwhile, major banks, including JPMorgan, are forecasting third-quarter GDP growth will be lucky to hit 2 percent, and the manufacturing sector likely continues a contraction that began in July.

In other words, the economy could use a boost — like ending President Trump's trade war. The harmful and ill-considered conflict just isn't working out. Everything that's supposed to be down is up, and everything that is supposed to be up is down. Factory jobs are down, the trade deficit is up. Business investment is down, uncertainty is up. Once again, trade wars are proving neither good nor easy to win, despite the president's promise of easy victory over China.

From CBO:

The federal budget deficit was $984 billion in fiscal year 2019, the Congressional Budget Office estimates. CBO’s estimate is based on data from the Daily Treasury Statements issued by the Department of the Treasury; the department will report the actual deficit for fiscal year 2019 later this month.

Relative to the size of the economy, the deficit—at an estimated 4.7 percent of gross domestic product (GDP)—was the highest since 2012, and 2019 was the fourth consecutive year in which the deficit increased as a percentage of GDP.

The estimated deficit is $205 billion more than the shortfall recorded in fiscal year 2018. However, that year’s outlays were affected by a shift in the timing of certain payments. Because October 1, 2017, fell on a weekend, $44 billion in outlays was shifted to September of fiscal year 2017. If not for that, the 2019 deficit would have been $162 billion larger than the 2018 amount, rather than $205 billion larger. Excluding that effect, revenues were 4 percent higher and outlays were 7 percent higher in 2019 than they were in 2018, CBO estimates.

The deficit of $984 billion is about $24 billion larger than the shortfall that CBO projected in its August 2019 report, An Update to the Budget and Economic Outlook: 2019 to 2029. Revenues exceeded the projection by $11 billion but outlays exceeded the projection by $35 billion, according to CBO’s estimates.

Incompetence Update, Economics Edition

In Defying the Odds, we discuss Trump's approach to governing.  The update  -- just published --includes a chapter on the 2018 midterms.

Katia Dmitrieva , Laura Davison , and Saleha Mohsin at Bloomberg:

The U.S. posted its biggest monthly budget deficit on record last month, amid a 20 percent drop in corporate tax revenue and a boost in spending so far this fiscal year.

The budget gap widened to $234 billion in February, compared with a fiscal gap of $215.2 billion a year earlier. That gap surpassed the previous monthly record of $231.7 billion set seven years ago, according to data compiled by Bloomberg.

On the advice of a media pundit turned adviser, Trump picked another pundit for a job requiring actual expertise.

Eamon Javers and Jacob Pramuk at CNBC:

Earlier this week, Trump spoke to National Economic Council Director Larry Kudlow. The president had seen a column in The Wall Street Journal, co-written by Moore, with the headline: “The Fed Is a Threat to Growth.” In it, Moore argued that the “last major obstacle to staying on this path [of economic growth] is the deflationary monetary policy of the Federal Reserve.”

Trump asked his top economic advisor whether he had seen the column. Kudlow replied that he had and “liked it a lot.”

“Why isn’t [Moore] the Fed chairman?” Trump asked rhetorically.

After Kudlow answered that the Fed board had two openings, the president asked his advisor to talk to Moore about one of the posts. Kudlow asked whether Moore was interested, and he said he was. Trump offered Moore the Fed board job, which will not become official until he goes through a vetting process.

At New York, Jonathan Chait writes:

I first started writing about Moore in 1997. Four years before, President Clinton had raised the top tax rate to 39.6 percent, and supply-siders had insisted this would without question cause tax revenues to drop. This prediction was a necessary corollary of supply-side economic theory, which holds that tax revenue moves in the opposite direction of the top tax rate. The prediction was spectacularly wrong — revenue not only rose, it rose much, much faster than even the most optimistic advocates of Clinton’s plan had predicted.

...
He is capable of writing entire columns that contain no true facts at all. He made so many factual errors he achieved the rare feat of being banned from the pages of a Midwestern newspaper. He has sold his policy elixir to state governments which have promptly experienced massive fiscal crises as a direct result of listening to him. He believes what he calls “the heroes of the economy: the entrepreneur, the risk-taker, the one who innovates and creates the things we want to buy” should be lionized, and that the idea that a recession might be caused by anything other than excessively high rates on these heroes defies “common sense.” He was pulled into Trump’s orbit during the 2016 campaign and co-wrote a ludicrous hagiography of Trump and his agenda. By all appearances, Moore opposes mainstream fiscal theories because he simply doesn’t understand them.

Conservative economist Greg Mankiw:

A couple of weeks ago, I gave a talk at the Federal Reserve Bank of Dallas. I said that, although I am not a fan of President Trump, I have to give him credit for making good appointments to the Fed. I was thinking about people like Jay Powell, Rich Clarida, and Randy Quarles.

Then today the president nominates Stephen Moore to be a Fed governor. Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job. If you doubt it, read his latest book Trumponomics (or my review of it).

It is time for Senators to do their job. Mr. Moore should not be confirmed.

I really hope this video of Stephen Moore getting absolutely destroyed by @crampell doesn't get retweeted and seen by the rest of the internet, because it would be very embarrassing for him. pic.twitter.com/gnI3F5hheT

— Aléx Young (@AlexYoung) March 22, 2019

...

Klobuchar and Free College

In Defying the Odds, we discuss the early stages of the 2016 campaign, when many candidates were unknowns.  In our forthcoming update, we bring the story through the 2018 midterm. We are now in the early stages of the 2020 race.

At CNN, Veronica Rocha and Brian Ries report on a town hall with Sen. Amy Klobuchar (D-MN):

"I am not for free four-year college for all, no," she said. "And I wish -- if I was a magic genie and could give that to everyone and we could afford it, I would," she said.

Realizing her answer might not be popular among some of the college students in the crowd -- many of whom are likely burdened with debt of their own -- she explained why:

"I've got to tell the truth. We have this mounting debt that the Trump administration keeps getting worse and worse. I also don't want to leave that on the shoulders of all these we've got to do a balance. Some of it is major tax reform in terms of reversing some of the things this administration has done. Some of it making sure that students are getting degrees and being led to jobs where we actually have jobs."

Klobuchar invoking the national debt is a significant break with numerous top Democrats, who often dismiss the debt in face of pressing issues like climate change, health care and education.

She said she wants to find a mix of incentives for students, and talked about expanding Pell grants for students and refinancing student loans as some examples.

SOTU Omissions

 In Defying the Odds, we talk about issues that drove the 2016 campaign, and the forthcoming update brings the story up through 2018.

Philip Klein at The Washington Examiner:

" We must create a new standard of living for the 21st century," President Trump said at the outset of Tuesday's State of the Union address, later urging the joint session of Congress, "Tonight, I ask you to choose greatness." But over the course of a speech that spanned nearly 90 minutes, Trump completely ignored the biggest long-term threat to American greatness: the looming federal debt crisis.

When Trump took office in 2017, he inherited a substantial level of debt, which accumulated during President Barack Obama's two terms as the fallout from Great Recession coincided with the retirement of Baby Boomers. On the month Trump was sworn in, the Congressional Budget Office predicted that the debt held by the public would reach $24.9 trillion by 2027. Last week, two years after being sworn in, the CBO now projects public debt of $25.9 trillion in 2027.

The CBO noted that by 2029, "federal debt would be higher as a percentage of GDP than at any point since just after World War II — and heading still higher." Unlike World War II, which was an extraordinary event after which the U.S. was able to pay down its debt over time, the twin problems of the aging of the population and rising healthcare costs mean that absent serious reform, the problem is always going to get worse.

Trump also ignored what is perhaps the greatest international threat.  From the Senate testimony of Dan Coats, Director of National Intelligence:

Our adversaries and strategic competitors probably already are looking to the 2020 US elections as an opportunity to advance their interests. More broadly, US adversaries and strategic competitors almost certainly will use online influence operations to try to weaken democratic institutions, undermine US alliances and partnerships, and shape policy outcomes in the United States and elsewhere. We expect our adversaries and strategic competitors to refine their capabilities and add new tactics as they learn from each other’s experiences, suggesting the threat landscape could look very different in 2020 and future elections. 

From Trump?  Not one word.

Trump told supporters 40-50% of speech will be about foreign policy. When asked if the deficit will be mentioned in #SOTU speech, chief of staff Mulvaney said “nobody cares,” per attendee https://t.co/YeBTSdF3HX

— Tara Palmeri (@tarapalmeri) February 5, 2019

Trump Impact: A Lump of Coal

 In Defying the Odds, we talk about the social and economic divides that enabled Trump to enter the White House.  Those divides, however, are now working against him. Despite reports of robust economic growth, Trump's approval rating is sagging and key indicators are breaking bad.

Jim Tankersley at NYT:

The partial government shutdown is inflicting far greater damage on the United States economy than previously estimated, the White House acknowledged on Tuesday, as President Trump’s economists doubled projections of how much economic growth is being lost each week the standoff with Democrats continues.

The revised estimates from the Council of Economic Advisers show that the shutdown, now in its fourth week, is beginning to have real economic consequences. The analysis, and other projections from outside the White House, suggests that the shutdown has already weighed significantly on growth and could ultimately push the United States economy into a contraction.

...
 Mr. Hassett said on Tuesday that the administration now calculates that the shutdown reduces quarterly economic growth by 0.13 percentage points for every week that it lasts — the cumulative effect of lost work from contractors and furloughed federal employees who are not getting paid and who are investing and spending less as a result. That means that the economy has already lost nearly half a percentage point of growth from the four-week shutdown. (Last year, economic growth for the first quarter totaled 2.2 percent.)

Scott DiSavino at Reuters:

 More U.S. coal-fired power plants were shut in President Donald Trump’s first two years than were retired in the whole of Barack Obama’s first term, despite the Republican’s efforts to prop up the industry to keep a campaign promise to coal-mining states.

In total, more than 23,400 megawatts (MW) of coal-fired generation were shut in 2017-2018 versus 14,900 MW in 2009-2012, according to data from Reuters and the U.S. Energy Information Administration (EIA).

Trump has tried to roll back rules on climate change and the environment adopted during the Obama administration to fulfill pledges to voters in states like West Virginia and Wyoming.

But the second highest year for coal shutdowns was in Trump’s second year, 2018, at around 14,500 megawatts, following a peak at about 17,700 megawatts in 2015 under Obama.

One megawatt can power about 1,000 U.S. homes.

The number of U.S. coal plants has continued to decline every year since coal capacity peaked at just over 317,400 MW in 2011, and is expected to keep falling as consumers demand power from cleaner and less expensive sources of energy.

Stephen Gandel at Bloomberg:

President Donald Trump and the Republicans’ tax cut is proving to be vastly more generous for corporate America, and vastly more expensive for taxpayers, than expected. Worse, the Trump Slump is erasing the bump the stock market received from the tax cuts. And evidence is mounting that the promised economic boost isn’t materializing. The administration’s signature political achievement is being eclipsed by disarray over trade, immigration and a government shutdown.

First, the headline number: $600 billion, at least. That’s how much more than expected I estimate the companies in the S&P 500 are on pace to save. It is also how much more the tax cut is likely to add to the national debt if it runs as planned for 10 years. The total savings for all of corporate America will be well into the 13 figures.

In late 2017, soon before Congress passed the tax cut — which reduced the U.S. corporate rate to a flat 21 percent from a previous marginal rate that topped out at 35 percent — the Joint Committee on Taxation estimated it would cost $1.4 trillion over 10 years. White House officials criticized that estimate as being too high. In fact, it wasn’t nearly high enough. My current estimate, now that companies have completed 2018, is nearly $2 trillion, and that’s just for the S&P 500. That’s nearly $400 billion more than I calculated in May. And the actual bill could rise even more while the lasting benefits are still pretty questionable.