At some point a clarifying event occurs which confirms that you are at the end of the road. In this particular case we are talking again about the bothersome subject of fiscal sanity—and the exclamation point the Donald supplied recently when his was trolling the House GOP caucus in behalf of his Big Beautiful Bill.

In order to ensure the extension of his precious (but unpaid for) 2017 tax cut and provide budgetary sanction for a 13% increase in defense spending and 60% rise in outlays for border control, the Donald doesn’t want any “grandstanders” upsetting the works: How To Cut $2 Trillion... Stockman, David A. Buy New $11.00 (as of 07:46 UTC - Details)

“Don’t f‑‑‑ around with Medicaid,” Trump told lawmakers in the private meeting. Trump had told reporters before the meeting that the bill is not cutting “anything meaningful (from Medicaid),” and instead was focused on “waste, fraud and abuse.”

Well, let’s see. Along with his defense and border control increases, Trump has ruled out cuts in Social Security, Medicare, veterans benefits and presumably interest on the public debt. So those sacred cows alone account for fully $62 trillion or 66% of total Federal spending over the next 10-years, and today he was commanding the corporal’s guard of fiscal hawks left in the GOP caucus to stay away from another $8.2 trillion in Medicaid spending over the decade, too.

So that’s a no-fly zone amounting to more than $70 trillion or 77% of Federal spending during the 10-year budget window ahead. In turn, that means there’s only $24 trillion left to cut, representing the entirety of the rest of the Federal government from the Washington Monument to the Klondike National Park in Alaska.

Then again, what’s left outside of this $70 trillion ring-fence also happens to be less than the size of the out-of-control deficit that would result from the Donald’s Great Big Beautiful Bill over the next 10-years. The idea of painting yourself into a corner, therefore, hardly does justice to the sheer fiscal lunacy of where the Trumpified GOP has implanted itself.

And, no, you are not going to save more than nickels and dimes by attacking “fraud, waste and abuse”, which the Donald apparently claims to be his alternative. Indeed, we know from first hand experience that “waste, fraud and abuse”reduction is the go to hiding place for chicken shit politicians who don’t want to face the fact that there are only two levers to save real money when it comes to the major entitlements. To wit, you must change the statutory language to either reduce the number of people eligible or cut the level of benefits per person. And since these kinds of measures save real money, they also generate angry constituencies. The truth being, of course, that there is no politically antiseptic way to cut the budget.

In the case of Medicaid, there were about 80 million recipients in 2024 and average spending per capita was $11,400 overall, of which the Federal share was $7,300 per person. So if you just eliminated the ObamaCare expansion of Medicaid, which most Republicans have advocated ever since its 2010 enactment, the recipient rolls would total 40 million, not 80 million; and, all other things equal, you could save $325 billion per year or about $4 trillion over the budget window.

That’s real money, of course. It could pay for the $2 trillion cost of extending the most important part of the TCJA—the marginal rate reductions—and still provide another $2 trillion for reduction of the $22 trillion baseline deficit over 2026-2035.

Or, in the alternative, you could cut the rolls to the 70 million level that Trump inherited in 2017 before he also massively expanded Medicaid in 2020, and reduce real benefits/per recipient to about the $9,000 level (2024 $) that prevailed in the year 2000. Back then, even Bill Clinton thought Medicaid was doing its safety net job. Yet taken together pre-Trump recipient rolls and Bill Clinton levels of real benefits per recipient would reduce spending by about $200 billion in 2026 and $2.5 trillion over the next decade.

But, no, the GOP legislative draftsman didn’t even have the cajones to attempt either of these reasonable roll-backs. Instead, they marked-up barely $700 billion of savings, and even that much is sketchy in the extreme. That’s because the one measure that would actually reduce the beneficiary rolls—a work requirement for able-bodied beneficiaries—does not really kick-in until after 2028, and is so loophole ridden that it is sure to invite extensive work-arounds out in the blue states of New York and California were a high share of working-age Medicaid recipients reside.

So the truth is, the Trumpified GOP is apparently copacetic with de facto socialist health care. With Medicare off-limits, ObamaCare left in tact and now Medicaid consigned by the Donald himself to the “no f*ck around” zone, what we actually have is a combined Medicaid, Medicare and the ObamaCare insurance subsidy population that totals 141 million Americans after you eliminate the dual and triple eligibles.

That’s 41% of the entire US population! And yet the Donald had the audacity to attack Congressman Tom Massie and his small band of fiscal conservative stalwarts for insisting that the final Reconciliation bill include meaningful Medicaid and other cuts to at least begin to whittle down the $22 trillion of deficits built in over the next 10 years under the CBO baseline. And, as we showed yesterday, upwards of $30 trillion of cumulative deficits under the Trumpified GOP’s Great Big Ugly Debt Bomb as currently written.

Stated as succinctly as possible, if you think that Tom Massie is the problem and should be kicked out of the GOP, it’s a sign that you are so full of shit that your back teeth will soon be floating. Truly, the Donald’s attack below marks the end of the road for any hope that the GOP will ever rise to the occasion and take on the budgetary Doomsday Machine that is now careening rapidly toward Fiscal Armageddon. The Triumph of Politic... David Stockman Best Price: $2.56 Buy New $15.99 (as of 05:55 UTC - Details)

“I don’t think Thomas Massie understands government,” Trump told reporters before the meeting. “I think he’s a grandstander, frankly. I think he should be voted out of office.”

After all, here again is the record of runaway Medicaid growth since the turn of the century. Constant dollar spending has tripled and the number of recipients has doubled. Yet if the Trumpified GOP is going to give this fiscal abomination a hall pass, pray tell what is left that they might actually have the courage to seriously cut?

After all, we dare say their are precious few Republican voters among the 80 million Medicaid recipients. And even among the estimated 800,000 resident of Medicaid nursing homes, we’d guess there are precious few GOP votes. Once the Dem vote harvesters sweep through the nursing homes, in fact, there are not normally many GOP votes in the absentee sheets they later stuff into the ballot boxes.

In short, we think the Donald’s demarche on Medicaid is a very big deal. It literally means that any serious attention to the nation’s soaring public debt is over and done—at least through 2028; and after that point the debt/bond yield/interest expense doom loop may be too powerful for any democratic government to stop.

Reprinted with permission from David Stockman’s Contra Corner.

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