Unleash Prosperity Hotline
Issue #1263
05/13/2025
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1) You’ll Need a Microscope To See the GOP Spending Cuts

The latest Congressional Budget Office projection is that over the next 10 years, the United States government will spend a stratospheric $89.3 trillion.

The plan that is now being debated in the House has net spending reductions of roughly $1.2 trillion.

So in other words, instead of spending $89.3 trillion, the "cruel" Republicans want to only spend $88.1 trillion - a measly 1.5% cut! What's even more depressing is that the Senate instructions have an infinitesimal $4 billion in cuts (and $521 billion in increases).

So look at the chart.  Do you see any difference at all?

By 2035, the federal government under the Republican starvation diet will still spend $10 trillion instead of the expected $10.7 trillion. As a reference point, last year the federal government spent roughly $7 trillion. So even under the GOP plan over the next decade, the budget will be only 40% higher instead of 50% higher.

This outlook assumes over the next decade no wars, no financial crises, no pandemics, no terrorist attacks or earthquakes. In other words, these are lowball estimates of how much Congress will really spend.

Someone should tell Congress that there is no law of nature or economics that says the budget has to go up every year.

2) Another One Million Downward Revision of Jobs Created Under Biden

The one positive economic achievements under Joe Biden was decent job growth coming out of the pandemic. But as we’ve pointed out over the last four years, private job creation was routinely revised downward.  This suggests the errors weren’t random.

Sure enough, the Department of Labor’s new annual benchmark revision for the nonfarm payroll figure for last year was yet again revised DOWNWARD by another 600,000 jobs for the period from March 2023 to March 2024.

More accurate quarterly data now point to no jobs being added during the third quarter of 2024, a time when the Biden administration claimed to have created 400,000 jobs. That's on top of the second quarter, when job growth was also estimated at 400,000 but the quarterly data show net private job losses.

As our Unleash Prosperity economist E.J. Antoni noted in his recent Townhall article, "Instead of adding almost 800,000 jobs during the middle of last year, the economy likely shed more than 160,000 of them."

Unemployment was kept low because of the low number of Americans looking for work and because the government hires so many people.

3) Good News: GOP Tax Plan Takes a Bite Out of College Super Endowments

Well maybe the members of Congress are reading and digesting the Hotline after all. We’ve been the loudest voices arguing for offsetting pro-growth tax cuts in the Trump 2.0 plan with taxes on endowments with more than $1 billion. These giant, never-taxed treasure chests serve no public purpose and only make the rich richer.

So we were thrilled by this headline announcement from yesterday:

The revenues are smaller and more targeted than we would like to see.  The GOP plan would impose a top tax rate of 21% on the investment earnings of the endowments for schools with more than $2 million per enrolled student:

That’s a good start. But we also want to see a one-time excise tax of 15% on the endowments. Then, in the future, donations to universities with budgets over $1 billion should no longer be tax deductible.  This would raise more than $100 billion and help pay for ending the unfair tax on Social Security benefits.

As a useful reminder, here are the schools that would be in the top rate under the House bill: