Republicans are pushing back on criticism of their bill cutting taxes and Medicaid from an unexpected source: former White House adviser Elon Musk.
Rep. Darin LaHood (R-Ill.) said Monday that Musk, who complained the bill increases the budget deficit, doesn’t know what he’s talking about.
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“I would disagree with Elon in the sense that he doesn’t understand how the tax bill works,” LaHood said on CNBC. “This is going to be rocket fuel for the economy.”
In fact, Musk understands the legislation perfectly well. The “One Big Beautiful Bill Act” calls for $4 trillion or more in tax cuts and increased spending but less than $2 trillion in spending cuts.
“I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing,” Musk said last week.
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As criticism, Musk’s statement was extremely mild. He didn’t say anything about how the legislation would cut benefits for poor people to finance tax cuts for the rich. He just made a factual observation that the numbers don’t match up.
Musk’s gripe burns because he was the man President Donald Trump appointed to head up the “Department of Government Efficiency,” an effort to reduce federal budget deficits by slashing spending. Republicans made Musk an avatar of fiscal responsibility, a cause they’ve championed for years, and now he’s called them out for abandoning their own core governing principle.
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That’s why Republicans keep getting asked about Musk and why they insist he’s mistaken.
“I sent a long text message to my good friend Elon Musk after he made those comments the other day to explain this is not a spending bill,” House Speaker Mike Johnson (R-La.) said Sunday on “Meet the Press,” adding that he believed Musk and other critics are somehow “missing” the spending cuts in the bill.
A Congressional Budget Office analysis of the individual components of an earlier version of the legislation found about $1.6 trillion in spending cuts, about $3.8 trillion in tax cuts, and about $200 billion in spending increases for border security and the military. In total, the gap between the tax and spending cuts is around $2.3 trillion. (The CBO analysis did not account for the cost effects of interactions between the bill’s provisions and didn’t include last-minute changes to the bill; the office will put out a new analysis this week.)
Republicans make three main arguments to try to drown out complaints about the obvious deficit of the legislation. One argument is that the spending cuts, while not bigger than the tax cuts, are still really, really big.
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“There is no dispute that the bill cuts over $1.6 trillion in spending. It mainly accomplishes this through the largest welfare reform in history,” White House adviser Stephen Miller said in a social media post Sunday, referring to the bill’s cuts to federal health and food programs.
The more substantive GOP argument against the budget math is that the tax and spending cuts will boost business activity so much that federal tax receipts will rise in tandem.
“The reason we call it the big, beautiful bill is because it is a tremendous pro-growth package entwined in this legislation that is going to make everybody’s incomes go up,” Johnson said. “There’s going to be more job opportunity, more opportunity to climb up that economic ladder in America, because job creators, entrepreneurs and risk takers will have the government off their backs, that will have lower taxes, and they will be expanding their businesses.”
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Johnson and others have complained that the CBO’s long-term projections of economic growth are too low and that the CBO fails to account for the increased economic activity that will result from the tax cuts. But budget forecasters that do use so-called dynamic scoring don’t share Republicans’ optimism.
The conservative-leaning Tax Foundation, for instance, found that the bill would increase deficits by $2.5 trillion on a conventional basis, and increased economic growth would only partially reduce its deficit. “On a dynamic basis, accounting for economic growth, the deficit would increase by $1.7 trillion over ten years before interest costs,” the group said in its analysis.
(The Penn Wharton Budget Model found the bill’s economic effects would actually increase its cost, partly because higher-income households would work less as a result of the tax cuts.)
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Another argument Republicans make against the budget experts is that they should not even have to count the cost of their tax cuts since the bulk of the cuts in their bill are merely an extension of cuts they enacted in 2017. Those cuts are scheduled to expire at the end of the year, with higher marginal tax rates automatically snapping back.
“As for the deficit, maintaining current tax rates by definition cannot add a penny to the deficit,” Miller said. “It doesn’t ‘cost’ the government anything to keep current rates in place.”
Republicans scheduled a December 2025 expiration of their tax cuts in 2017 in order to make them appear less expensive in the CBO forecasts back then. Now Miller and certain Senate Republicans are trying to have it both ways by saying the expiration wasn’t real, even as they pass legislation to make sure it doesn’t happen.
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Musk, who lies prodigiously about other things, may have been more willing to tell the truth about the bill last week because he was leaving his role at the DOGE office in the White House, having fallen far short of an overly ambitious goal to save $2 trillion in spending. Now Republicans on Capitol Hill are passing legislation that does an even worse job of reducing deficits than Musk did.