While DOGE keeps chopping, Congress is now signaling a desire for even bigger cuts. The house budget passed last night extends the TCJA with 1.5-2tln in pay-for cuts to programs for the poor, outlining a big fiscal tightening ahead despite no deficit progress. Thread. - ThreadSky

bobeunlimited.bsky.social • 3 days ago

While DOGE keeps chopping, Congress is now signaling a desire for even bigger cuts.

The house budget passed last night extends the TCJA with 1.5-2tln in pay-for cuts to programs for the poor, outlining a big fiscal tightening ahead despite no deficit progress.

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thomaskralowclub.bsky.social•3 days ago

DOGE’s volatility vs. Congress’s fiscal tightrope is a crazy combo! Crypto’s wild swings meet real-world cuts to safety net, Anyone else balancing meme-stock bets with *actual* anxiety over policy impacts? Drop the survival strategies, are you hedging, pivoting, or just watching the chaos unfold?"

ryanwhite19750.bsky.social•3 days ago

But meh Laffer Curve, these cuts will pay for themselves!

bobeunlimited.bsky.social•3 days ago

Because TCJA is current law simply extending it will simply keeps the status quo and wouldn't have an incremental positive or negative drag on the economy.

What matters then are any other cuts that have to get passed in order to get it extended, which create a fiscal drag.

bobeunlimited.bsky.social•3 days ago

Compared to the campaign promises, these figures largely mean that the TCJA will be mostly extended, and that none of the other promised tax cuts like no tax for tips, overtime, social security, etc. will get passed.

bobeunlimited.bsky.social•3 days ago

And despite the planned pay-fors the deficit would be projected to continue to widen ahead as the tax cuts fall in revenue far outpace the other spending cuts over the next decade.

bobeunlimited.bsky.social•3 days ago

This mix could change depending tariff revenue raise. While there remains a lot of uncertainty, if the announced plans are implemented for the full next 10yrs, it'd be enough to fully offset the TCJA extension combined with pay-fors above.

https://bsky.app/profile/bobeunlimited.bsky.social/post/3lim5ovb7mc23

bobeunlimited.bsky.social•3 days ago

Even if the budget impact ends up being roughly neutral, the impact on growth is likely to be substantial, with the TCJA tax cuts largely accumulating to the wealthy, while the tariffs and cuts to programs having the largest impacts on lower income cohorts.

bobeunlimited.bsky.social•3 days ago

With this budget, Congress reaffirmed what is likely to be a substantial negative fiscal shock ahead.

While we wait to see final legislation, total spending cuts & rising tariffs (if maintained) would be in the range of 500bln/yr, or nearly 2% of GDP concentrated on the poor.

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