Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

The GOP tax bill cuts taxes by $1.5 trillion over the next decade and will accelerate growth of the federal debt under any forecast.

Expand chart
Reproduced from the Committee for a Responsible Federal Budget; Chart: Axios Visuals

The bottom line: Expect Republicans to defend these tax cuts while Democrats step up a defense of government spending — particularly if Republicans turn next to welfare reform next year. But at some point, a reckoning is coming, and the only way to raise taxes or reform popular government programs is to do it on a bipartisan basis, which isn't how things have been working in Washington.

Congressional Republicans, most of whom are self-described budget hawks, are set to today pass into law a tax cut bill that will add between $1.5 and $1.7 trillion to the federal deficit when taking into account both economic growth and expirations no one expects to take effect, according to the Committee for a Responsible Federal Budget, a group that favors shrinking the deficit:

  • Looking ahead, this worsens the country's fiscal outlook, but it was going to be a problem regardless.
  • Entitlement spending is set to balloon in the near-term future as baby boomers hit retirement age and their Medicare and Social Security benefits kick in.

What happens next, part I: Democrats are enraged by the Republican process on tax reform. They'll fight back if they retake control of Washington:

  • "Democrats are going to have to rejigger their internal process and forget about being the only party that believes in responsible government, because we can't take much more of this massive assault on domestic spending," said Jim Manley, a former aide to Democratic Senate Leader Harry Reid.
  • And while House Speaker Paul Ryan has said he wants to do entitlement reform next year, most people say this is highly unlikely to be successful.
  • "I don't see the political environment in 2018 supporting something like this," said Doug Holtz-Eakin, president of the American Action Forum, and a Republican economic adviser.
  • That also means a $1 trillion-dollar infrastructure package is unlikely to happen next year.

What happens next, part II: At some point the growing deficit will have to be faced, and whether that's future tax increases to raise revenue, or entitlement reform to decrease spending, it's going to be very difficult to pull off.

  • "In order to meet the criteria of not increasing poverty and hardship … there will have to be a mix of increased revenues as well as a mix of" decreased spending, said Sharon Parrott of the Center on Budget and Policy Priorities, a left-leaning group. And pulling that off will "require a different policy-making environment."
  • "It's the hardest problem," Holtz-Eakin told me.

Bottom line: "We're not going to make it 10 years. Somewhere, someone's going to have to do it ... With or without tax reform, this was in the cards," Holtz-Eakin said.

Go deeper

1 min ago - Health

Health care in the New Washington

Illustration: Sarah Grillo/Axios

As America emerges from the pandemic, here's a special Axios AM Deep Dive on the Biden administration's health care agenda.

17 mins ago - World

Palestinian Authority announces new COVID restrictions as cases surge

A nurse administers the COVID-19 vaccine to a Palestinian in the occupied West Bank city of Hebron. Photo: Hazem Bader/AFP via Getty Images

The Palestinian Authority on Saturday announced fresh coronavirus restrictions, including a partial lockdown, for the occupied West Bank as COVID-19 cases surge.

The big picture: The new measures come as Israel, which leads the world in vaccinations, faces increased pressure to ensure Palestinians in the occupied West Bank and Gaza Strip have equal access to vaccines.

Myanmar military fires UN ambassador after anti-coup speech

Photo: Peerapon Boonyakiat/SOPA Images/LightRocket via Getty Images

Myanmar's military regime on Saturday fired the country's Ambassador to the United Nations, Kyaw Moe Tun, a day after he gave a pro-democracy speech asking UN member nations to publicly condemn the Feb. 1 coup, The New York Times reports.

Details: State television said the ambassador had "betrayed the country and spoken for an unofficial organization which doesn’t represent the country and had abused the power and responsibilities of an ambassador."