What the giant House spending bill tells us about Republicans’ vision for America

Why it’s a bad idea to let the guy who bankrupted casinos run your fiscal house, in four charts.

The US House of Representatives passed the “One Big Beautiful Bill Act” (H.R. 1) last week (May 22, 2025). To give credit where it’s due, “Big Beautiful Bill” is a much better name than “reconciliation bill,” which is the technical name for legislation of this type. While the “BBB” heads to the Senate for consideration, we can pause to learn a thing or two about what the 119^th Congress and its Republican majority communicate with this bill.

First, the bill costs about $5 trillion. That’s a number that is enormously difficult for humans to wrap their heads around. The mathematical difference between a billion and a trillion is literally a difference of 100x. Still, it’s just hard to conceptualize– “trillion” and “billion” rhyme and seem like they should be close, but they’re not.

Time is a useful grounding metaphor here. For example, a million seconds is 11.6 days. A billion seconds is 31.7 years. But a trillion seconds is 31,709 years. In other words, a billion seconds ago, Bill Clinton was just getting his presidency started, but a trillion seconds ago, humans were still in the Stone Age.

With a bill this size, one of the things we learn is that Congress is not planning to do much legislating outside of this mega legislation. The only reason to pack so much into one moving vehicle is if you think it’s the only vehicle that is going to move anytime soon. Republicans’ insistence on this harried form of policymaking is partly due to the very narrow majorities they hold in both chambers, which keeps things precarious, and partly due to the legislative privileges of a reconciliation bill, which cannot be filibustered, by rule.

Back to the bill. Most of the $5 trillion goes to extending various tax cuts that were enacted during Trump’s first presidency in 2017. Analysis shows that the cuts will primarily benefit the wealthiest Americans, while those in the lowest income categories may see their after-tax income actually decline. About $4 trillion of the BBB is tax cuts, but there is also some spending in there, too. There is $144 billion for shipbuilding and missile defense, and around $100 billion for border security and, yes, a border wall.

The BBB pays for the $5 trillion bill by cutting costs and borrowing money. It breaks down to roughly one-third of the $5 trillion getting covered by reducing government spending and two-thirds through borrowing. Specifically, it proposes to cut $1.7 trillion in services––Medicaid ($700 billion), clean energy ($560 billion), education ($350 billion), food stamps ($267 billion), and then borrow the remaining $3.3 trillion – yes, that’s with a “t.”

On one hand, this is consistent with Republican Party values—burdensome taxes are more important than social welfare programs in their book. This isn’t new. But it’s important to put the scale of what they’re proposing into perspective. What does it mean to borrow $3.3 trillion dollars and how unusual is that?

Chart #1: Federal surplus/deficit. (All of the charts below are from the Federal Reserve and are publicly available here.) Except for a short blip in the late 1990s during the internet boom, the federal government has run budget deficits for my entire lifetime. This means that each year, the federal government spends more than it takes in in revenue. Historically, the largest deficits were during economic recessions, which happen regularly, and the US also tends to run deficits when it wants to do expensive things it prioritizes, like fight wars.

For example, we ran a big-for-the-time deficit in 2004 under George W. Bush ($~400 billion) to finance tax cuts while fighting foreign wars. After the financial crisis in 2008, we ran a massive deficit of $1.4 trillion (“t”), but it was short-lived. By 2015, most of that added debt was back to Bush-era levels. The next big thing was the pandemic in 2020, and the deficit got massive again. The US borrowed a whopping $3 trillion to get through that mess. Fortunately, it was halved just two years later. Still, running a regular budget deficit in numbers measured in trillions is not normal.

To put it back into context, Republicans are proposing to purposefully run deficits larger than the one we accepted during Covid, to finance—not a war, not an emergency stimulus response to a crisis—a tax cut that overwhelmingly benefits wealthy Americans.

Federal surplus or deficit since 1900

But so what? We’re a rich country. Why shouldn’t we have nice things?

Chart #2: US Debt. Where the deficit is the annual difference in government revenue and expenditures, the debt is like the sum of all the deficits we’ve ever run. Since the US continues to run large deficits and there is no reset button, the total debt financed by the government grows every year. In 2024, the total amount the US was on the hook for borrowing was 32 trillion dollars. Notice how the line gets steeper at the end? That’s those big deficits compounding.

Federal debt held by the public since 1960

One reason the deficits matter is that the debt is rising at an out-of-control rate. Of course, we must pay interest on the debt, too. That takes us to Chart #3.

Chart #3: Interest on the Debt. Yes, interest rates are a bit high right now, and that’s not helping matters, but the slope of this line in the recent period is bananas. This graph shows the total amount of money the US is paying to finance its debt. In 2024, we paid $880 billion in interest payments on the $32 trillion debt. The US spent more money on interest on the debt than it spent on the entire US military in 2024 ($841 billion). The US spent 13 percent of its total federal outlays on interest payments to finance the debt. This is an enormous amount of money.

Federal outlays on debt interest since 1940

Sure, it’s a lot, but the US is big. The US dollar is the world’s reserve currency. Nine countries, outside of the US, use the US dollar as their primary currency. And another 21 countries regularly accept the US dollar for transactions, alongside their native currencies. Nearly 60 percent of global trade happens in US dollars. In other words, the US’s dominant economic position gives it enormous leverage on the global stage. So maybe it’s okay that the US is so deep in debt. Unless, of course, it’s overleveraged.

Chart #4: US Debt as a percent of Gross Domestic Product. A good way to grasp the depth of someone’s economic troubles is to examine their borrowing against their earning. How much is the US borrowing relative to how much it’s putting out there? Here we’re talking about not just what the government puts out there, but the entire US economy—the GDP. We can use the debt-to-GDP ratio to get a handle on how over our heads we are.

Back in the Clinton years, when the US was running a surplus—but there was still the debt!—the US debt-to-GDP ratio was around 55 percent. That’s high, but again, the US has a lot of economic assets in its favor, and people wanted to buy US debt.

After the 2008 financial crisis, the debt-to-GDP ratio started to balloon such that the US started holding as much debt as the economy produced. A 100% debt-to-GDP ratio happened in the middle of the Obama era, and during COVID it peaked.

Today, total debt held by the public is around 120% of GDP. Economists might prefer that we adjust this number to account for debt held by Federal Reserve Banks versus that held by private investors. In which case, the US debt-to-GDP ratio is about 80%. Whether or not the US is “overleveraged” is a matter of whether people (i.e., investors) believe the US can faithfully pay off its loans. Are we good for it?

US debt held by the public as a percent of GDP since 1960

While there has been a fair amount of tumult in the markets lately, particularly among bond traders—which is the market that matters most for getting debt financed—in general, it seems like most investors and analyst are still betting on the US to get this right, be able to cover its debts, or at least be willing to buy back bonds should lenders want to unload them. But given the extreme amount of debt the US is taking on to engage in a spending spree with narrow benefits, it’s not clear how long this will be true.

If this were a household budget, we’d be looking at someone who is purposefully bringing in less income while borrowing more money to finance lifestyle choices that do not benefit the whole family. So far, banks continue to be willing to let the family run up their credit cards, but at some point, someone is going to question whether it’s responsible to keep adding to the debt. When one or two banks decide it’s not worth it, the game of cards comes crashing down.

At the end of the day, we cannot cut enough spending to finance this spree. The total amount of money Republicans are proposing to spend on everything that is non-defense discretionary outlays—this includes everything from agriculture to transportation, research to veterans’ benefits—is around $600 billion in the 2026 spending year. In other words, if you cut the federal government down to nothing but Social Security, Medicare, and the Pentagon, the US would still have to run a deficit in the trillions of dollars to finance the very limited federal government under such a scenario. The US is poised to borrow more than it will spend, even if the government were a bare-bones entity that did nothing but act as a giant health insurance company with an army.

Budgets are an expression of values. The House reconciliation bill is telling us that Republicans want to leverage US economic dominance to finance government benefits for the most privileged members of society.