“Treasury Secretary Scott Bessent wildly insisted on Tuesday that President Donald Trump’s proposed $5,000 checks to Americans could be sent out without adding to the national debt,” Mediaite reports.
Just dropped · Trial Balloon · Ep. 192
November Surprises
Trial Balloon · Ep. 192: November Surprises
Budget Office Estimates Iran War Has Cost $38 Billion
“The war in Iran cost the United States roughly $38 billion through Aug. 1 and significantly depleted U.S. munitions, the Congressional Budget Office, the nonpartisan scorekeeper, said on Tuesday,” the New York Times reports.
“In a 19-page analysis, which the office said had been limited because the Defense Department did not respond to its requests for information, the CBO also projected that the war would continue to cost approximately $2 billion to $3 billion per month, and that rebuilding depleted U.S. stockpiles could take ‘at least five years.'”
CNN: Iran war expected to cause a spike in U.S. inflation, according to budget watchdog.
‘Trump Dividend’ Wins Instant Republican Critics
“President Donald Trump dropped a hot mess of a half-baked midterm promise in lawmakers’ laps last night,” Politico reports.
“Trump at the GOP’s convention pledged to send $5,000 to every adult in the U.S. if Republicans retain control of Congress in the midterms… And while the crowd of thousands of his supporters gathered at Dallas’ American Airlines Center cheered the announcement, GOP fiscal hawks were balking at the effort before Trump even left the stage.”
“The payout, which would need to be approved by Congress, would dwarf the amount distributed during the Covid pandemic and likely explode the deficit.”
“A GOP operative, granted anonymity to discuss the idea, expressed skepticism, calling it ‘a desperate attempt to change the political mood.'”
Bloomberg: What is the $5,000 “dividend” Trump is proposing?
Trump Has Promised Cash Payments Before
“First, at the start of his second term, President Trump promised a DOGE dividend, a pledge to take the money that Elon Musk’s team would cut from the federal budget and send it to the American people,” the New York Times reports.
“Then Mr. Trump moved on to a ‘tariff refund,’ a plan to use the money the government was collecting in import taxes to fund payments for the public.”
“Those ideas never panned out. Nevertheless, Mr. Trump is again talking up the possibility that the federal government will send Americans thousands of dollars in cash.”
Some Republicans Eye Tax Increase for Social Security
“For decades, Washington has replayed the same fight over taming the soaring national debt: Democrats cite a need for more taxes. Republicans refuse. And anyone who suggests cutting the biggest source of spending — federal retirement benefits — gets attacked,” the Washington Post reports.
“But a coming crisis in Social Security appears to be pushing at least a few Republicans off the GOP’s long-standing pledge never to raise taxes.”
“This summer, Sen. Bernie Moreno (R-OH) joined Sen. Elizabeth Warren (D-MA) in proposing to raise the payroll tax cap so people with higher incomes pay more into the program. Now the idea is emerging as an acceptable fix among other GOP lawmakers, including Rep. Tom Cole, the influential chair of the House Appropriations Committee.”
San Francisco Dems Break with Party Over Billionaire Tax
“San Francisco Democrats have broken with their statewide party over California’s proposed billionaire wealth tax, rejecting Proposition 40 in a lopsided vote that exposes a growing divide over whether taxing extreme wealth is worth the potential economic consequences,” Fortune reports.
“The San Francisco Democratic Party voted 17-4 to oppose Proposition 40—with five members abstaining, five members absent, and one member with no endorsement.”
Fiscal Restraint Goes Out the Window Under Trump
“Donald Trump returned to the White House promising to get the United States’ financial house in order by slashing the scope of the federal government, ending costly ‘forever wars’ and spurring economic growth to tame spiraling deficits,” Reuters reports.
“Instead, the national debt has surged past $40 trillion in the first 19 months of his second term. Federal spending has grown, not shrunk. The six-month-old Iran war has become an expensive stalemate. And the cost of servicing the U.S. debt, meanwhile, has grown as yields on some U.S. bonds hit their highest levels in nearly two decades.”
Congress Clears Funding Patch to Avert Shutdown
“The House cleared a stopgap funding patch Tuesday to keep cash flowing to federal agencies until mid-December — preventing a government shutdown before Election Day and setting up two major policy battles at year’s end,” Politico reports.
Trump Calls for Federal Film and Television Tax Incentive
“President Trump on Monday declared his support for federal tax credits to support film and television production in the U.S. which entertainment industry veterans say could boost a struggling industry that has lost huge amounts of business to foreign countries,” the Wall Street Journal reports.
Deadline: Trump backs federal film & TV tax incentive: “Hollywood is a complete & total disaster!”
The 2032 Social Security Deadline Looms
“Social Security’s looming insolvency is the country’s most foreseeable problem, a blaring demographic siren threatening automatic benefit cuts in 2032. Congress is trying to work up the nerve to solve it,” the Wall Street Journal reports.
“Discussions on the government’s largest program accelerated this summer with actuarial warnings, hearings and scattered bipartisan efforts. Lawmakers on both sides grasp Social Security’s real challenges. And, eventually, analysts expect Republicans and Democrats to hold hands and jump together to prevent benefit cuts for tens of millions of seniors and perhaps address the program’s long-term health.”
“But Congress rarely acts until it is jammed against a deadline.”
Ballooning National Debt Stirs Little Action
“It used to be that a new report of budgetary red ink would touch off a political crisis in Washington. There would be speeches and news conferences and blue-ribbon commissions and legislation and brinkmanship over how to get the nation’s fiscal house in order,” the New York Times reports.
“But when the national debt topped $40 trillion last week — that’s trillion with a T — the collective body politic all but shrugged. Never mind that the U.S. government now owes twice as much money as a share of the economy than two decades ago. Republicans and Democrats issued perfunctory, my-we’re-concerned statements and promptly moved on.”
House GOP Leaders Eye Quick Vote On Stopgap Funding
“House GOP leaders are aiming to put a Senate-passed stopgap spending bill on the floor early next week, in the first days back in session after a five-week recess,” Politico reports.
“The quick vote, coming almost a full month before the government funding deadline, underscores how Republican leaders are intent on avoiding a government shutdown before voters go to the polls in November.”
Washington Is Facing Some Unpalatable Choices
“Year after year, the federal government has spent more than it collected in taxes. Each annual shortfall increased the national debt, slowly at first and then by leaps, defying warnings of an inevitable reckoning,” the Washington Post reports.
“Now, the reckoning may be at hand.”
“This week’s bond market sell-off brought government borrowing costs to their highest level in almost two decades and prompted an extraordinary Treasury Department intervention.”
“After decades of free spending, Washington may soon be compelled to make some long-deferred, and politically unpalatable, choices that will leave few Americans unscathed.”
Vance Claims Bessent Has a ‘Discreet Plan’ to Shrink Debt
“Vice President Vance said that Treasury Secretary Scott Bessent has a ‘very discreet plan’ to shrink the nation’s debt,” NewsNation reports.
Said Vance: “He has had a very discreet plan, of course, supported by the president of the United States, to get the United States to a point where our economy is growing faster than our debt.”
He adeed: “And if you look, we are on track. So, even though the debt is too high, even though we inherited this debt bomb from the Biden administration, we actually do have a plan to get the economy growing faster than the debt and that’s the most important thing.”
Trump Accumulated Debt Equal to First 200 Years
MS NOW: “Two hundred and fifty years into the American experiment, our national debt has hit an all-time high of $40 trillion.”
“During his first campaign for president, Donald Trump promised to pay down the national debt within eight years.”
“Since then, it has doubled.”
“In fact, Trump has accumulated as much debt since entering the White House as every president from George Washington through Bill Clinton combined.”
The Path to 100%
Wall Street Journal: “Debt and deficits haven’t always been a problem in the U.S. Publicly held debt—now approaching World War II levels at about 100% of the country’s annual GDP—was just 31.5% of GDP in 2001 after four years in which the government ran budget surpluses.”
Borrowing Costs Are Soaring
NBC News: “A record national debt. A rapidly ballooning deficit. Interest payments on track to surpass Medicare as the government’s greatest expense. None of it seems to matter much in Washington, where President Donald Trump and the Republican-controlled Congress have enacted an agenda that adds trillions of dollars to the national debt, with upcoming legislative plans that would pile on even more red ink.”
“But it should matter to consumers, because it means that in the coming years they will be paying more for everything from credit cards to cars to mortgages.”
U.S. Debt Is Set to Hit $40 Trillion
“The U.S. national debt is likely to surpass $40 trillion this week, months earlier than forecasters previously expected in part because of billions of dollars in lost revenue from President Donald Trump’s invalidated tariffs,” the Washington Post reports.
Taegan Goddard
Taegan Goddard is the founder of Political Wire -- which for more than two decades has been one of the nation's most influential political news sites.
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