Larry Kudlow: Congress’ spending drama is a lesson for the GOP to ‘simplify’

A lesson for the GOP. Simplify, simplify, simplify, and that’s the theme of the riff.

The most important thing I’ve seen since the end of the year Congressional spending drama and the difficulty of reaching agreement, this tells us about the difficulty of more than one reconciliation bill next year.

So far, the House has twice struck a deal to avoid a government shutdown.

And avoiding a government shutdown is desirable, not economically, but politically, it could give Sen. Chuck Schumer additional leverage through confirmation of the January 6 presidential election and even the January 20 inauguration.

Schumer’s Democrats are diabolical and you never know what will happen if you leave them in charge, even for a few more weeks.

Now, a third ongoing settlement deal has been struck by congressional Republicans and is awaiting President Trump’s approval.

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It would be very similar to the short-term deal that was defeated last night. It would delay the debt ceiling until March 14 and would supposedly cut about $2.5 trillion in federal spending during the reconciliation bills still to be decided next year.

But as anyone can clearly see, this relatively simple exercise of extending funding for a few weeks was very difficult, very controversial and very unpredictable.

And I think that’s a leading indicator of the potential problems the GOP could face next year if they continue to casually believe they can actually pass multiple reconciliation bills in 2025. They’ve got to be kidding themselves.

Recent McLaughlin & Associates polls show that nearly half of all voters believe we are in a recession, and more than four-fifths remain concerned about inflation.

35 percent of voters say securing the border is the most important thing for Trump, and 26 percent say growth continues, making Trump’s tax cuts permanent.

And Trump Tax Cuts 2.0 overwhelmingly, with 82% in favor of ending federal taxes on Social Security earnings, 71% in favor of ending federal taxes on tips for service workers, 64% in favor of ending federal taxes on overtime pay, and 70% in favor of ending federal taxes on employee tips in 2017. permanent tax cuts.

Right now, Mr. Trump and his transition team are very popular, with approval ratings well above 50%. He is enjoying an almost unprecedented post-election honeymoon.

But back to the legislative strategy, which will be so important, Mr. Trump’s policies mandate from the election, and I think Republicans who think it’s going to be easy to pass a few reconciliation bills are sorely mistaken.

The parliamentary turmoil within Republican ranks in just the last few days, focused on what should be a relatively simple exercise, is a major red flag warning of overcomplicating things next year.

Postponing tax cuts would be a big mistake. Delaying the tax cuts will not put more money into the hands of working people. Delaying tax cuts will not fatten blue wallets. These are the people who voted for Mr. Trump in the battleground states and gave him his landslide.

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The GOP has winning issues like closing the border. tax cuts; and dug, child, dug; and regulatory state reduction.Compile them all and do it as soon as possible.

And be realistic about the near-impossible problems that would create some massive reconciliation bills.

Near source President Trump says he wants one big, beautiful bill. As always, he’s right.

This article is adapted from Larry Kudlow’s opening commentary in the December 20, 2024 edition of Kudlow.