The ‘BBB’: Conservatism but With Caveats | The American Spectator

Suffice it to say, the Big Beautiful Bill is ambitious legislation with a conservative underpinning. And there’s much to exalt: It retains the 2017 tax cuts; it slashes bureaucratic red tape. Work requirements are restored for welfare, parental rights are expanded, religious liberty is defended, and border security can now actually ‘be enforced.’ And finally, it defunds Planned Parenthood.

Yet, there are also serious concerns to be acknowledged. Some provisions raise red flags about long-term fiscal sustainability. This is a time for both qualified praise and critical thought.

Reasons to Smile

The bill eliminates federal funding for Planned Parenthood for at least one year. Although the cuts are temporary, it sets a precedent that many thought was an impossible feat.

Trump’s 2017 Tax Cuts and Jobs Act provisions for individual tax rates were to expire after 2025. The bill makes those tax cuts permanent, including the doubled standard deduction. The vote for the BBB was really a vote against an impending tax increase.

The legislation also includes a pass-through business deduction (Section 199A), now locked in at 20 percent, Child tax credit raised to $2,200, Estate tax exemption permanently doubled to $15 million ($30 million for couples) and AMT and SALT caps, casualty-loss rules and mortgage interest deductions fixed or extended.

Great news for workers, and for families and small businesses — long-term tax planning becomes a reality.

The portion of the bill on immigration has teeth: it funds new border wall construction, triples hiring for Border Patrol and ICE agents, cuts off funding to sanctuary cities, and mandates nationwide E-Verify to prevent illegal employment.

Able-bodied adults without dependents will now need to work, look for work, or train for work in order to receive Medicaid, SNAP, or housing assistance. It’s a return to the principle that assistance should be tied to individual responsibility.

With new federal education transparency, parents will be able to see what’s being taught in their children’s public schools. The bill blocks funding for programs promoting critical race theory or radical gender ideology and expands school choice block grants to states.

Parents are put back in charge of their children’s education — public institutions are made more accountable.

Caveats

We are still spending beyond our means.

Depending upon one’s source, the bill adds trillions to the national debt, with disagreement about the plan for repayment. We’re continuing to engage in borrowing at levels which should be reserved for national emergencies. It’s a perpetuation of the perennial trend where deficits become structural and debt is openly tolerated as someone else’s problem down the line. This isn’t fiscal conservatism; it’s a gamble on future economic growth — and one that future generations may be unable to afford.

Where are the spending cuts?

Aside from work requirements for Medicaid, the bill does little to rein in federal spending. There are no new discretionary caps, no entitlement reform, and no effort to curb bureaucratic redundancy (DOGE merely scratched the surface).

It’s About the Baseline

If one takes the time to look more closely at the bill, at who does the assessments and how the numbers are derived, Trump’s “BBB” may not have the “distressing” impact on the federal budget and national debt that some critics claim. It’s a matter of assumptions.

Consider this discrepancy: The Congressional Budget Office (CBO), statutorily required to provide “objective, nonpartisan information to support the Congressional budget process,” estimated that the Senate version of the GOP’s reconciliation bill would add $3.3 trillion to the deficit over the next decade. The president’s Council of Economic Advisors (CEA) estimated that the bill could reduce the deficit by $4.5 trillion.

The dramatic discrepancy between the estimates from CBO and the CEA stems largely from differing assumptions about what counts as expected future policy, known as the “baseline.”

CBO is statutorily required to use a “current law” baseline, which assumes that key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) will expire. In contrast, the Trump administration employs a “current policy” baseline. The latter assumes that those tax cuts will be extended, as they often are, and therefore does not treat the extension of the 2017 Trump tax cuts as a new cost.

Office of Management and Budget Director Russ Vought weighed in on the debate in a post on X ahead of the bill’s passage by the Senate:

“Remember, those saying that the Senate bill increases deficits are comparing it to a projection where spending is eternal, and tax relief sunsets. That is a Leftist presupposition,” Vought wrote. “This bill reduces deficits over the next ten years, even if you ignore increased revenues from dynamic growth. And importantly, the $1.6 trillion in spending reductions exceeds the bicameral framework agreed to prior to final passage of the budget resolution with Speaker Johnson and Leader Thune.”

The Trump administration argues further that the CBO is missing the broader impact of the economic growth that Trump’s policies will create. The CEA estimates that the Big Beautiful Bill will increase the level of Gross Domestic Product by 2.5 percent to 2.8 percent — CBO projects a more modest increase of 0.4 percent.

To be fair, the CBO model focuses only on the “BBB” itself. There are, of course, “cascading effects” from Trump’s energy and trade policies, as well as the administration’s deregulatory efforts, that may very well drive growth. The CEA estimates that the reconciliation bill, scored with the “current policy” baseline and along with the full complement of Trump policies, will ultimately reduce deficits by $8.87 trillion.

CBO, it should be noted, has made notable errors in its past assessments of major legislation.

The office initially estimated that former President Joe Biden’s “Inflation Reduction Act” would reduce the deficit by approximately $58.1 billion between 2022 and 2031. Its 2024 outlook, however, was revised to a $428 billion increase in the cumulative deficit, $224 billion of which they attributed to adjusted projections of the IRA’s electric vehicle tax credits and reduced revenues from gas taxes.

Moreover, CBO has faced questions regarding political bias. The FGA group reported that of the CBO employees whose voter registration could be identified, 78.9 percent were Democrats, while only 12.5 percent were Republicans and 8.6 percent were independent or unaffiliated.

The potential for political bias notwithstanding, there is little reason to believe CBO will get it right this time. The Office of Management and Budget and the CEA inspire more confidence, as CBO’s history is one of perennial miscalculation on economic growth estimates based on assumptions employed under “current law” baseline analysis.

But let’s be clear — irrespective of one’s assumptions regarding growth, taxes, and spending — cutting taxes without cutting spending is not conservative fiscal governance. Absent structural reform in the “BBB,” the long-term fiscal outlook remains uncertain at best.

It is possible that strong economic growth will help strengthen the nation’s financial condition, making some of our worst prognostications moot. But fiscal responsibility should not be treated as ancillary to fiscal policy; it’s a political obligation central to the well-being of the republic and that of its people. The Trump administration should remember that over the ensuing three years.

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