Morning all. We start today with an a new interview of one of our “Hopium House 7,” Rep. Tom Suozzi of New York. While we cover a lot of ground in our discussion the most important part is our in-depth discussion of the GOP’s awful reconciliation bill, one Rep. Suozzi repeatedly calls reckless. Get to the interview when you can and consider learning more and donating to our “House 7” today. The first step in our strategy to flip the House this cycle is to shore up those newly-elected Members whom we supported last time and make sure they return.
As the legislative path to rolling back Trump’s terrible tariffs has closed, for now, we will be turning our attention to defeating the ridiculous Trump budget (reconciliation) bill that is winding it’s way through the House and Senate. I will be do my best to in the coming weeks to keep you as informed as possible as this monstrosity takes on greater definition, but to be very clear - as this bill is a product of this early Trump 2.0 era, it is as destructive, reckless and batshit crazy as everything he is doing right now.
In a new Semafor article this morning Republican Senator Bernie Moreno calls the emerging House bill a “sandstorm of bad ideas.” House Rs are pissed that Trump is impulsively introducing new ideas into the process long after the window for weighing in has closed. Three House committee mark-ups have been postponed to next week due to lack of internal agreement.
The Washington Post has a good overview of where this process stands this morning, which I encourage you to read in full (gift link). Called, “These six Republican ‘red lines’ could complicate Trump’s policy plans,” it begins:
As Republican lawmakers hammer out a “big, beautiful bill” to enact President Donald Trump’s policy plans, they’re running into a problem: their colleagues’ growing list of red lines.
Some House Republicans say they won’t vote for a bill that cuts Medicaid. Others have refused to support the legislation unless it lets their constituents deduct more of their state and local taxes. Last week, one Senate Republican ruled out voting for any bill unless it pares back spending to the level before the pandemic — which would require massive additional cuts.
The growing list of policy “no-gos” will make it even harder for Speaker Mike Johnson (R-Louisiana) and Senate Majority Leader John Thune (R-South Dakota) to draft a bill that can pass their narrowly divided chambers.
“Some of these are clearly in conflict,” said Rohit Kumar, the co-leader of PricewaterhouseCoopers’ national tax office and a former aide to Sen. Mitch McConnell (R-Kentucky).
Avoiding Medicaid cuts, for instance, would make it almost impossible to slash spending enough to return to 2019 levels, he said: “It’s hard to imagine how those happen in the same bill.”
Where I want to focus this morning is on the reconciliation bill’s core problem - that Republicans are living in a Trump-induced economic and fiscal fantasy world that makes all this a deeply dangerous farce.
As this process is not a normal budget budget process, but “reconciliation,” a special process that allows Congress to adopt a budget with only 51 votes in the Senate rather than 60, the two chambers had to adopt a binding fiscal outline which they now must legislate inside of. So while the daily press coverage is focusing on the search for “cuts” or “offsets” to spending, the Senate fiscal outline adopted by both chambers would add tens and tens of trillions of debt to the US which could very well bankrupt the US government and the country. It would be an act of extraordinary sabotage, sabotage of course consistent with Trump’s ongoing assault on our government and our power, freedoms and prosperity.
Here is how the Committee For A Responsible Federal Budget described the budget framework adopted by the Senate and House with the almost $1t in Medicaid cuts includes:
the proposed concurrent Fiscal Year (FY) 2025 budget resolution would allow policymakers to add $5.8 trillion to primary deficits through 2034 via a reconciliation package. Such a bill would be historically unprecedented in its fiscal irresponsibility, adding several times more debt than any reconciliation package or other recent piece of legislation.
Remember that Trump’s fundamental attack on Harris was that the bills Biden-Harris passed spent too much money, drove up the deficit and spurred inflation (the truth of course was that inflation was a global phenomenon, managed here better than any other advanced nation). The framework Trump and the Republicans are planning on adopting would increase the deficit by about three times what Biden and Harris added. Three times. Remember that the deficit went up every year of the Trump Administration and went down every year of the Biden Administration; and yes, despite the claims of DOGE, Trump is planning to dramatically increase the deficit and not cut it.
I am now going to share the full passage from Semafor with Senator Moreno:
Some senators are closely eyeing the House’s big tax/health care/spending cuts/national security bill. Others say it’s not worth it at this chaotic inflection point, Semafor’s Burgess Everett reports. “I shut most of that out because they debate a lot of stuff. I call it a sandstorm of bad ideas,” quipped Sen. Bernie Moreno, R-Ohio. He said the GOP should focus on three simple things: passing permanent extensions of the 2017 tax cuts, restoring research and development spending, and adding in President Donald Trump’s promised tax breaks on tips, overtime and Social Security
So, Senator Moreno says, all the tax cuts for everyone, and no to the spending cuts. In fact, we need to be spending more, not less and explode the deficit even further!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
In a new analysis in Washington Monthly, our friend Rob Shapiro explains why this fiscal strategy, which would be reckless even in good times, is particularly dangerous now given the damage Trump has done to the American economy and trust in America itself these last few months:
The bond and equity markets’ thumbs-down responses to Trump’s tariffs and threats signal an even more serious problem: Investors are losing confidence in Trump, his presidency, and perhaps the United States. It’s especially true for foreign investors who reinforced the message by moving away from the dollar, because they’re investing less in our stocks and bonds.
If their response to our president’s ineptitude and capriciousness persists, it could be ruinous. The stability of our financial system depends on trillions of dollars in foreign capital. In 2024, foreign investors and governments held $18.4 trillion in U.S. stocks and $8.5 trillion in U.S. Treasury securities, about 30 percent of all our stock and 30 percent of all our bonds. While most American investors will likely wait out the coming storm, foreign investors with $27 trillion in American financial assets have plenty of alternatives. In a word, the United States could face destabilizing capital flight.
To stave off this grim prospect, the Treasury Department and American corporations will have to offer foreign and domestic investors higher returns. (Yields on U.S. treasuries soared after Trump revealed his chaotic tariff regime and have decreased only slightly since then.) So, regardless of what the Fed does, market interest rates may rise even as the economy declines.
And……
Our gathering economic storm includes another feature that could drive the economy onto the rocks. Apart from the tariffs, Trump’s aggrieved attacks on the rule of law also threaten the willingness of foreign investors to continue holding and buying American bonds and stocks. Along with the rest of us, they see Trump and his administration unilaterally abrogating contracts, withholding appropriated funds, dismissing court decisions, attacking judges for enforcing their rulings, deporting people without charges or hearings, providing special treatment for large contributors and favored companies, and threatening law firms and universities without any legal basis.
The erosion of the rule of law under Trump can have enormous economic significance for a foreign government, investor, or company with stakes in our economy. They now know that the U.S. government may ignore its contracts with them or decide not to enforce their agreements with others when it serves the political or personal interests of the president. That’s the way the world works in the kleptocratic dictatorships in Russia and Venezuela, and virtually no one invests in their stocks and bonds.
By following their lead, Trump and his apprentices risk devastating capital flight that could leave many of our leading financial institutions insolvent. In addition to his deeply destructive tariffs, Trump’s sweeping campaign against the rule of law in the United States has raised the economic stakes from a rocky business cycle to a potential financial and economic meltdown with terrible consequences.
So, yes, while the reconciliation bill is terrible on its face - huge tax cuts for billionaires, devastating cuts to health care for almost 100m people, budget-busting deficits - coming now after the damage Trump has already done can be rightly understood far more as fanaticism and sabotage than a “plan.”
But this is the core problem America now faces - Trump is an old, declining madman, living in an alternative world of his delusions, fantasies and grievances, who is doing profound and lasting harm to the country. Prices are going down, not up he told us again this weekend. Putin wants peace. He has a different interpretation of the Supreme Court’s plane language 9-0 decision than they and everyone else has (oh my fucking God!!!!!!!!!!!!!!!). Yes, he is going to take Greenland, land that is part of Europe and protected by NATO, by force. Climate change isn’t real. DEI is a threat. Vaccines are bad. Disappearing legal residents of the United States to a foreign Gulag permissible. This horrible reconciliation bill is somehow good for America and the American people.
As we discussed here Trump’s ABC News interview from last week had alarming moments, where it was not really clear that he still lives in the same place we all inhabit each day. His interview with NBC News also had similar moments, but he looked and sounded even more unwell in this interview than the one with ABC. I could play a lot of clips that would be disturbing, but listen to this one, below. It is not the market that decides how many dolls or pencils you get to have, or you and your family. It is he, Trump, and him alone, without any input from Congress, or any serious debate in the country, who decides (yes the tariffs are a modern day form of taxation without representation). The decision for you to pay more for things and get less has been made by him, and him alone. It is pure, L’Etat c’est moi (the State is me) stuff, as if there is any understanding of the American journey where a leader could think and speak like this. It is pure unadulterated madness:
Yesterday, on a Sunday, we were fortunate and grateful to learn that our mad leader, in all of his infinite and beneficent wisdom, has decided to levy, a 25%, a 50% no a 100%!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! tariff on
“any and all Movies coming into our Country that are produced in Foreign Lands”
Yesterday here at Hopium we talked about Owning The Fourth and using the next two months to help Americans get re-acquainted with our Founding principles which were to establish a country where a madman could never reign. This morning that work feels far more urgent than ever.
As part of our Owning The Fourth campaign I will be sharing the 27 Amendments to the Constitution on its corresponding day of the month. As today is May 5th, this morning I share the Fifth Amendment, one very much in the news right now:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Keep working hard all. We are making progress, true progress, but have a lot of work ahead - Simon
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