Republicans can con voters, but not the bond market

The big beautiful (actually quite ugly) federal budget bill passed the House. It’s got a great deal of the nasty guy’s agenda rolled into it. The nasty guy was on Capitol Hill on Tuesday to twist arms (and I hear the holdouts voted “present” instead of yes). Emily Singer of Daily Kos reported the big, well known items in the bill are cuts to Medicaid (expected to cause 13.7 million people to lose health insurance) and SNAP (cutting 11 million from food assistance). There is a lot more to the bill, much of it opposed by the American people. To keep many of those details from the public – and members of Congress – the bill this big was pushed way too fast and the last few sessions were done overnight. At the end of the visit Capitol Hill the nasty guy said:

We're not doing any cutting of anything meaningful. The only thing we're cutting is waste, fraud, and abuse. With Medicaid—waste, fraud, and abuse. There's tremendous waste, fraud, and abuse. ... We have illegal aliens that are multiple killers, with multiple murder records, getting Medicaid.

A couple things about that statement: If you don’t like bad people getting Medicaid you can change the eligibility requirements without taking Medicaid away from those who desperately need it. You certainly know how to change requirements because you just changed them – by adding work requirements, which results in people losing coverage, not because they aren’t working but because the reporting requirements are so difficult and time consuming they may miss work and lose the job they’re required to have. “Anything meaningful... waste, fraud, and abuse” – depends on your definition of “meaningful” and “waste.” Republicans have shown over and over that poor people are not meaningful to them – they have shown how much they hate poor people. And from the perspective of a rich person giving anything to the poor is “waste.” In Monday’s pundit roundup on Kos Greg Dworkin had a couple quotes about this bill. From Jonathan Cohn of The Bulwark

But the focus on the delays can be a bit of a distraction. Because right now the real question is not why the Republicans are moving so slowly but why they are moving so quickly—and what they don’t want you to see… But, then, there’s reason to believe GOP leaders are trying their best not to make the legislation’s true nature clear to members—or the public, for that matter. The polling on Medicaid cuts is clear: Voters oppose them strongly. GOP officials know this, which is why they have spent so much time denying they are making cuts to Medicaid—or, at least, framing them as a way to root out “waste, fraud, and abuse” and to strengthen the program for the “truly vulnerable.” But the longer the debate goes on, the more indefensible those claims look. Every passing day gives analysts more time to publish damning information, like these analyses showing coverage losses by state and congressional district. And the more this information gets out, the easier it is for organizations and activists to press their case.

What Dworkin included and I didn’t are links to analysis reports. Some of those are behind paywalls. Dworkin also included a tweet from Rolling Stone that links to an article that has this tagline: “Hospitals go out of business when Medicare and Medicaid are cut. Period.” LJ Slater posted a cartoon from Kevin Kallaugher. The left side has has the caption, “Robin Hood. Stole from the rich. Gave to the Poor.” The right side shows a masked elephant holding a family at gunpoint as the child puts the bag marked “Medicaid” into a much larger bag labeled “Tax cuts.” The caption says, “Robbing Hoodlum. Steals from the poor. Gives to the rich.” Bonds are been in the news lately and AmericanIdeal of the Kos community wrote a couple posts on why that is. I’ll try for a simple explanation. If bonds and economics are your thing, go ahead and enjoy the full articles. The first article was written on Monday. The author says the big ugly bill just passed by the House is a con. The nature of the con is that the tax cuts in the bill, expected to increase the national debt by $3.8 trillion will not have significant damage to the economy and government securities. Republicans can con voters, but they can’t con the bond market. Last Friday Moody’s became the last of the three major agencies that evaluate credit risk to downgrade US treasury bonds rating from AAA (the best) to AA-1. The last time all three had not rated treasuries the safest was 100 years ago. The author translates Moody’s announcement from economic speak into English:

In other words, no amount of phony DOGE cuts or “work requirements and revised eligibility standards” (e.g.: massive cuts to Medicaid) will offset the estimated $4 trillion of deficit growth caused by the Republicans’ A #1 goal of extending the tax cuts of 2017. Simply put, the bond markets aren’t having it.

They’re showing they’re not having it by selling US bonds in favor of safer and more predictable markets and by requiring higher interest rates when they do buy. Higher interest rates mean the government must pay more to pay back the bonds. The amount the government must spend each year to pay for the bonds has risen significantly over the last few years and will soon be unsustainable. Rising bond rates mean corporations must pay higher rates for the bonds they issue. And Americans also pay higher rates on mortgages. The second article on bonds was posted Wednesday. In that day’s bond market prices rose again.

Why does it matter? Mostly because bond market turmoil, especially as a result of international selling, would make it more difficult for the US to reliably repay the interest on its outstanding debt, an issue forming the basis of GOP hardliner opposition to passing another deficit increasing budget bill. It also lifts the pressure on corporations who need to borrow to refinance their own debt and/or make planned investments in infrastructure, technology, etc. While the equities market “bulls” and buy-and hold trading strategy stalwarts will continue to point to the fact that “extreme events come and go”, it has been over 100 years since the US Treasury wasn’t blessed with a pristine AAA rating from any of the major credit rating agencies. Should the “sell America” trade gripping the treasury markets take widespread hold after the big beautiful Bill passes, the US economy will likely be subject to a permanent existential restructuring forced by global monetary decisions. This isn’t small, or inconsequential, nor is it just another political debate.

Last Sunday Barbara Rodriguez of The 19th, in an article posted on Kos, explained how the work requirements added to Medicaid will force people to lose health insurance. I’ll let you read the details. I’ll mentioned something I noticed. Sometimes Republicans describe their reasons for work requirements with the words “capable adults who choose not to work.” That’s not an accurate description because most already work. Others replace the first two words with “young” and “able-bodied” and “men.” That’s a big misdirection because most of the people who will lose health insurance are women. In today’s pundit roundup Chitown Kev had a couple quotes worth mentioning. Jamelle Bouie of the New York Times wrote about the war for the soul of America and its four theaters of conflict. I’ll summarize the list: One: The nasty guy is waging war on constitutional government, replacing it with himself. Two: The MAGA movement is waging war on the nation’s economic future by effectively closing borders and becoming an inpenetrable fortress. But that means Americans will have to leave service industries for manufacturing. Three: A pitched battle against a sustainable climate future. Four: The MAGA movement’s assault on the nation’s ability to produce scientific, technological and medical breakthroughs. Kev added:

Remember that an “impenetrable fortress” might be designed to keep others outside of the walls but it also functions to keep inhabitants within the fortress walls. Trump will grift for the drawbridge tolls.

Kev quoted Timothy Snyder, writing for his own Substack and talking about Ed Martin. His nomination was recently withdrawn (I don’t remember why or for what) and he is now given the title of “weaponization czar” – weaponizing the legal system to bring people into line. Snyder wrote:

He has done more visible work for the Russian state television than for any other institution. Martin, in other words, has already been part of one weaponized legal system for some time. His American career as "weaponization czar" is a natural second step of his Russian career as apologist for both Russian and American weaponizers and authoritarians. Between 2016 and 2024, Martin was a star of both RT and Sputnik, which are propaganda arms of the Russian state. Putin himself has made this completely clear. One of the central missions of RT and Sputnik is to weaken the standing and power of the United States. Anyone who goes on RT or Sputnik, as Martin did more than a hundred times, knows what he is doing. For eight years, on any issue of the day, Martin was there to spread mendacious propaganda about Americans and to defend Putin and Trump. His Russian work surpassed any media exposure in the United States.

“Weaken the standing and power of the United States...” Republicans and the nasty guy seem to be doing a pretty good job of that. And who benefits is Putin. In a third pundit roundup Dworkin quoted Philip Bump of the Washington Post:

The Trump administration is aware that Americans broadly support the deportation of undocumented immigrants who have committed violent crimes. Rather than using it as the basis for deporting violent immigrants, though, the administration often works backward: Knowing that Americans want to see violent criminals sent out of the country, it sends people out of the country, while arguing that they were violent criminals. There is a dangerous catch-22 at play. The government reserves the right to scoop people up and send them to foreign prisons, but, by ignoring due process, reserves for itself the ability to determine whether that treatment is warranted.

Elsewhere in the article Bump explains the rights immigrants and citizens have when facing ICE. Earlier this week Michigan Public had reports about the Environmental Protection Agency giving an all-clear on the Flint, Michigan water crisis. This removed the Safe Drinking Water Act emergency order. The crisis began eleven years ago when Flint water was shifted from the Detroit water system to the Flint River and insufficient water treatment and safeguards were not put in place. Lead and other contaminants leeched into the water. That’s about all Michigan Public said. Alix Breeden of Kos reported more. Benjamin Pauli is a Flint resident and chair of the city’s Water System Advisory Council. He’s not pleased with the EPA’s withdrawal. The council worked to create “institutional arrangements that allow residents to raise concerns effectively and receive meaningful follow up.” That’s needed because residents’ trust in government is still shaky and the water system still has issues that need to be addressed. But the EPA’s all-clear also removed major funding for the council. Now Pauli is afraid that citizens will be portrayed as anti-science or just determined to be victims. Pauli had also been on “the EPA’s National Environmental Justice Advisory Council, which provided recommendations to the EPA for the nation’s underserved communities.” But NEJAC got axed because it was seen as DEI. Alex Samuels of Kos wrote about the nasty guy fuming over celebrity endorsements, as in Beyoncé, Bono, Oprah, and Bruce Springsteen supporting Harris over himself. The recent tantrums and demands for investigations appear to be because public filings show the Harris campaign paid the celebrity production companies, a normal expense of campaigning, and not a bribe given to the stars.

That Trump’s still throwing tantrums about celebrity endorsements nearly six months after winning the election is absurd. Stars backed Harris because they saw what Trump was offering and wanted no part of it. His demand for a federal investigation into a defeated opponent because Beyoncé endorsed her is far from oversight—it’s full-blown grievance politics. ... And with everything else on his plate, from court cases to crises, it’s anyone’s guess why Trump keeps picking fights with celebrities instead of focusing on, you know, governing. But one thing’s clear: Nothing triggers Trump more than being left out by the cool kids.