House Speaker Mike Johnson (R-LA) achieved the seemingly impossible in getting President Donald Trump’s “one big, beautiful bill” across the finish line with a one-vote margin. However, Trump’s legislative legacy only passed the lower chamber with the promise to Freedom Caucus fiscal hawks that the Senate would expedite and expand Medicaid reforms and the reversal of former President Joe Biden’s green energy credits. The bill, which the Congressional Budget Office estimated will cost a little over $2 trillion over the next decade, would have to incorporate the $1.6 trillion in cuts pledged to the Freedom Caucus in order for economic growth to render the bill truly fiscally responsible. The Senate is facing a similar uphill battle, with holdouts across the ideological spectrum weighing in with their own requests for the bill.
However, one request from the ostensibly hawkish faction of the Senate isn’t just antithetical to the demands of the Freedom Caucus — it’s a nonstarter that Trump would never, ever agree to pass into law.
Sen. Ron Johnson (R-WI) has long lamented Mike Johnson’s single bill as a concept, instead musing that an effective three-vote margin in the House and Senate would be capable of passing not one, not two, but three separate bills that would allow Republicans to finish dessert before their meat and potatoes. The first two bills would authorize Trump’s extra defense and homeland spending and extend the expiring provisions of his 2017 Tax Cuts and Jobs Act. Then all the savings would come in a magical third bill that most of the caucus would have zero political incentive to actually vote for.
But it’s the substance of this magical third bill that calls his entire intention into question.
Ron Johnson has repeatedly reiterated that his make-or-break condition for voting for the bill is “a commitment to a pre-pandemic level of spending” and a “process” to maintain this.
During an interview with Ben Shapiro, the Wisconsin senator said entitlements are not the primary driver of our skyrocketing annual deficits.
“What’s really driving the massive increase in deficit spending is pandemic spending,” he said. “If you exclude Social Security, Medicare, and even Medicaid, there are literally hundreds of billions of dollars — probably $400 billion to $500 billion of spending — that exceeds 2019 spending increased by population, inflation. Again, that’s excluding Social Security, Medicare, and Medicaid. That’s just all the other total outlays. Again, we went on a spending spree from $4.4 trillion in 2019 to $6.5 trillion [in 2024,] and we never looked back. We kept borrowing, we kept spending at that level. Next year, we’re looking to spend about $7.3 trillion. So if you go line by line — and that’s what I’ve been arguing — we need a budget review panel. We need to do what DOGE has done by looking at these contracts. We need to go through the more than 2,000 lines of the federal budget, line by line.”
Ron Johnson has repeatedly said he has a magic third bill to bring annual outlays for fiscal 2025 down to $5.5 trillion — or deficit neutral, as that’s how much the federal government is projected to collect in revenue this year — without touching Social Security and Medicare. In his interview with Shapiro, he appeared to be suggesting he could also refuse to reform Medicaid. But the numbers tell a different story.
He is correct that between fiscal 2019 and 2024, total outlays skyrocketed from $4.4 trillion to $6.75 trillion. That’s a staggering 53% increase indeed, and many years after COVID-19. However, contrary to Ron Johnson’s claims, this trajectory is not because of COVID-19 spending but rather, as Shapiro insisted, the inherent structure of generational wealth transfers paid for by a shrinking workforce.
Total discretionary spending from fiscal 2019 to 2024 rose from $1.3 trillion to $1.8 trillion, or 38%. However, outlays for Social Security, Medicare, and net interest payments on the existing national debt rose from $2 trillion to $3.25 trillion, or 61%. Total mandatory spending plus interest also rose 61%, from $3.1 trillion to $5 trillion.
A 61% increase cannot be blamed on demographic collapse, as the population of Americans aged 65 and older increased by only 16%. And defense spending arguably held flat when adjusted for inflation, increasing from $676 billion to $850 billion, or 26%.
Ron Johnson’s $5.5 trillion spending target in his magic third bill is mathematically precise in that it accounts for a 16% increase in the senior population that consumes half of all federal funds and the roughly 21% increase in price levels across the board. But this figure is more than a trillion dollars short of what we actually will spend this year because spending is driven by the structural problem of entitlements. Cost increases, such as cost-of-living adjustments for Social Security and Medicare reimbursement rates, are automatic. Meanwhile, the demographic collapse of mass retirement means a vanishingly small number of workers are paying more than ever for each beneficiary of federal largesse.
The fact is that if Ron Johnson is saying he will not vote for a bill unless we return to pre-pandemic outlays adjusted for inflation, and the mass exodus of boomers from the workforce, that means he will not vote for any bill, let alone an iteration of the “one big, beautiful bill” on the floor. Trump has made clear for over a decade now that he will not touch Medicare or Social Security, which will go insolvent in the next eight years. This is why Ron Johnson and the bill’s authors were so wise to hone in on Medicaid to offset the bill’s costs — there simply isn’t enough nondefense discretionary spending to cut from to meaningfully pay for a $4 trillion tax cut. Medicaid was always the only way to thread the impossible needle of Trump’s pledge to ignore Social Security and Medicare and the conservative mandate to, at minimum, make the bill deficit neutral on a dynamic basis, if not an actual net spending cut.
EIGHT PROVISIONS IN THE ‘BIG, BEAUTIFUL BILL’ THE SENATE MAY CHANGE
If Rep. Chip Roy (R-TX) or Sen. Rand Paul (R-KY) were president, conservatives across the country would correctly be encouraging Ron Johnson to pursue his actual goal of bringing spending back to 2019 levels by gutting the Ponzi schemes that are Social Security and Medicare. If he actually pulled it off, Ron Johnson would be a candidate for Mount Everest.
But Roy is not president. Trump is president. And if we actually want to extend the TCJA and deliver the single largest spending reform of the decade — even if it’s less than ideal — Ron Johnson has to operate in the realm of reality rather than wish away the math that proves there’s no going back to 2019 without reforming entitlements across the board.