President Donald Trump and the Republican caucus made the GOP’s 2017 tax cuts permanent in last year’s One Big Beautiful Bill Act. In fact, the party added other tax breaks, like no tax on tips or overtime. Millions of Americans now fork over a smaller percentage of their hard-earned money to the federal government’s redistribution schemes.
Republicans cut taxes. Zero Democrats voted for those cuts in 2017 or in 2025. In fact, Dems wanted to impose a $4.5 trillion tax hike on the American people. But sure, the donkeys are the party of “affordability.” Give me a break.
Democrats call those tax rates “giveaways” for the rich, which is a funny word for allowing someone to keep their own money. Their claim is also false, since every tax bracket got a break.
Lower tax rates fueled phenomenal economic growth during Trump’s first term, hampered only by that dratted COVID pandemic. Democrats exploited the pandemic to oust Trump and jack up federal spending, often on their “green” priorities. Baseline federal spending is drastically higher now than it was in 2019, both in nominal terms and as a percentage of GDP. No real cuts can ever be made because even small reductions in growth are met with howls of outrage.
Which brings me to yesterday’s news from the Congressional Budget Office.
In short, the federal government has a major problem, and it’s not that the IRS should be pillaging your paycheck for even more money.
“The federal budget deficit totaled $2.0 trillion in fiscal year 2026 ... $218 billion more than the deficit recorded in fiscal year 2025,” reports the CBO. And here’s the kicker, right in the first paragraph of its report: “Although revenues rose by $169 billion (or 3 percent), outlays rose more — by an estimated $386 billion (or 6 percent).”
The Wall Street Journal adds, “The U.S. spent $7.4 trillion last year, up 6%, and it collected $5.4 trillion in revenue, up 3%.”
Democrats routinely claim that tax cuts will “cost” the government money and drive up deficits. This is a lie for two reasons: 1. It’s your money, not theirs. 2. Better tax rates often yield higher revenue because of increased economic activity.
Nevertheless, the CBO scored the OBBBA as adding $3.3 trillion to the debt largely because of decreased revenue, which it estimates based on flawed static scoring. Reality showed why that prediction was flawed.
However, the federal deficit has risen — thanks to never-ending spending increases. The Journal notes, “Six-plus years into an economic expansion, the U.S. is running annual deficits normally seen only during recessions and wars.”
Yet also according to the Journal, “The Trump administration and the Republican-controlled Congress took several steps to reduce red ink since gaining full control of Washington in early 2025. They shrank the federal workforce, curtailed clean-energy tax breaks, let some healthcare subsidies expire and lowered food-stamp enrollment.”
So why are deficits so high?
For one thing, the federal debt is $40 trillion and rising rapidly. That debt comes with interest — that cost more than $1.1 trillion last year, which is more than half the deficit and 11% higher than Fiscal 2025. Interest alone is the second-biggest line item in the federal budget, trailing only Social Security.
Speaking of Social Security, spending on that program rose by $86 billion (5%) because of “increases in average benefits and in the number of beneficiaries.” Medicare and Medicaid are the third- and fourth-largest programs, and they increased even faster, at 8% — $132 billion combined. Entitlements, earned or unearned, are the main drivers of our debt. As National Review’s John Puri notes, that’s because the big three “run on autopilot, expanding each year based on predetermined formulas.”
Side note: Deficit spending and the inevitable inflation are why Trump’s pitch for $5,000 dividend checks is such a horrible idea.
I’ve been trying to look at various news items with a glass-half-full approach of late, but I’m going to let my Eeyore spirit animal loose for a moment. If you think a $2 trillion annual deficit is bad, the CBO projects that we’ll hit $3 trillion within a decade, and $4 trillion in 15 years — and the CBO often underestimates.
Republicans at least espouse fiscal responsibility and occasionally reform programs or cut taxes. Democrats never stop pitching new entitlement programs and expanded spending, supposedly paid for with higher taxes. Take a look at the Democratic Socialists of America’s platform, and remember how many DSA members are running as Democrats.
Which option sounds more appealing in November?
