politics

The Largest Upward Transfer of Wealth in American History

House Republicans voted to advance a bill that would offer lavish tax cuts for the rich while slashing benefits for the poor. By Jonathan Chait House Speaker Mike Johnson Kevin Dietsch / Getty May 22, 2025, 9:21 AM ET

House Republicans worked through the night to advance a massive piece of legislation that might, if enacted, carry out the largest upward transfer of wealth in American history.

That is not a side effect of the legislation, but its central purpose. The “big, beautiful bill” would pair huge cuts to food assistance and health insurance for low-income Americans with even larger tax cuts for affluent ones.

Hakeem Jeffries, the House minority leader, warned that the bill’s passage, by a 215–214 margin, would mark the moment the Republicans ensured the loss of their majority in the midterm elections. That may be so. But the Republicans have not pursued this bill for political reasons. They are employing a majority that they suspect is temporary to enact deep changes to the social compact.

The minority party always complains that the majority is “jamming through” major legislation, however deliberate the process may be. (During the year-long debate over the Affordable Care Act, Republicans farcically bemoaned the “rushed” process that consumed months of public hearings.) In this case, however, the indictment is undeniable. The House cemented the bill’s majority support with a series of last-minute changes whose effects have not been digested. The Congressional Budget Office has not even had time to calculate how many millions of Americans would lose health insurance, nor by how many trillions of dollars the deficit would increase.

The heedlessness of the process is an indication of its underlying fanaticism. The members of the Republican majority are behaving not like traditional conservatives but like revolutionaries who, having seized power, believe they must smash up the old order as quickly as possible before the country recognizes what is happening.

House Republicans are fully aware of the political and economic risks of this endeavor. Cutting taxes for the affluent is unpopular, and cutting Medicaid is even more so. That is why, instead of proudly proclaiming what the bill will accomplish, they are pretending it will do neither. House Republicans spent months warning of the political dangers of cutting Medicaid, a program that many of their own constituents rely on. The party’s response is to fall back on wordplay, pretending that their scheme of imposing complex work requirements, which are designed to cull eligible recipients who cannot navigate the paperwork burden, will not throw people off the program—when that is precisely the effect they are counting on to produce the necessary savings.

The less predictable dangers of their plan are macroeconomic. The bill spikes the deficit, largely because it devotes more money to lining the pockets of lawyers and CEOs than it saves by immiserating fast-food employees and ride-share drivers. Massive deficit spending is not always bad, and in some circumstances (emergencies, or recessions) it can be smart and responsible. In the middle of an economic expansion, with a large structural deficit already built into the budget, it is deeply irresponsible.

In recent years, deficit spending has been a political free ride. With interest rates high and rising, the situation has changed. Higher deficits oblige Washington to borrow more money, which can force it to pay investors higher interest rates to take on its debt, which in turn increases the deficit even more, as interest payments (now approaching $1 trillion a year) swell. The market could absorb a new equilibrium with a higher deficit, but that resolution is hardly assured. The compounding effect of higher debt leading to higher interest rates leading to higher debt can spin out of control.

House Republicans have made clear they are aware of both the political and the economic dangers of their plan, because in the recent past, they have repeatedly warned about both. Their willingness to take them on is a measure of their profound commitment.

And while the content of their beliefs can be questioned, the seriousness of their purpose cannot. Congressional Republicans are willing to endanger their hold on power to enact policy changes they believe in. And what they believe—what has been the party’s core moral foundation for decades—is that the government takes too much from the rich, and gives too much to the poor.

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