On July 4th, in a mockery of the best American democratic traditions, Donald Trump signed into law his signature piece of domestic legislation. His so-called “big, beautiful Bill” offers massive tax cuts, mostly to the benefit of the very rich: today’s American aristocrats.
Yet, while it might be good news for the luxury yacht industry, it will leave an estimated 12 million without health insurance through cuts to the Medicaid programme. Trump’s ability to pass such ugly legislation through a tightly divided Congress reflects his political power, and yet it could well lead to his undoing in the 2026 mid-term elections.
The more the Republican Party changes, the more it stays the same. For all the talk about the party appealing to the working class, it remains fundamentally committed to a regressive agenda that puts the interests of the very rich above those of ordinary Americans and future generations.
This legislation is ripped straight from the playbook of Ronald Reagan. Reagan reduced the tax rate on the highest earners from 70 per cent to 28 per cent, inaugurating a new era of massive upward redistribution of wealth. He did so by slashing programmes benefiting the poorest Americans: child nutrition, housing assistance and payments to single mothers.
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Trump’s Bill also resembles Reagan’s agenda in another respect: it is as irresponsible as it is cruel. The most expensive social welfare programmes in the US – social security (old age pensions) and Medicare (health insurance for those over the age of 65) – are too popular to cut.
[ Trump takes ‘big beautiful Bill’ victory lap as his grip on power tightensOpens in new window ]
Trump, like Reagan has also increased the budget for the major area of American spending: the military. Reagan justified his cuts with the fantasy of supply-side economics, claiming that slashing taxes would generate so much economic growth that it would actually result in increased government revenue. Republicans today justify their irresponsible spending with the accounting trick that, because they only extended tax cuts due to expire, they aren’t really adding to the deficit.
When Reagan left office, the federal debt had tripled. Trump’s Bill is set to increase the federal deficit by more than $3 trillion.
Trump’s Bill was not much loved by many of the Republicans who voted for it. Deficit hawks worried about adding to the national debt; they like the tax cuts, but would have preferred more social spending cuts to finance them. Elon Musk’s criticism of the Bill on these grounds led to his public falling out with Trump.
Moderate Republicans, meanwhile, worried that cuts to Medicaid would hurt the party’s chances in 2026. Thom Tillis, one of only three Republican Senators to vote against the bill, wondered how he could face his voters “when President Trump breaks his promise by pushing them off of Medicaid because the funding’s not there anymore”.
Trump’s ability to pass such legislation reflected his considerable political muscle. He could only afford to lose three out of 53 Republican votes in the Senate (he lost three, with vice-president Vance breaking a 50-50 tie) and, even more challenging, only three of 219 Republican votes in the House of Representatives (he lost only two).
Trump held his party together by threatening Republicans who voted against the Bill that he would support primary challengers against them. For decades, the Republican Party has been distorted by the fact that most of its politicians are elected from heavily Republican districts or states. As a result, the threat to their re-election lies in primary challenges from the right rather than in winning the general election against a Democrat.
Yet Trump was able to exploit this fact like no previous leader. His personal hold on the party means that his endorsement of a primary candidate all but ensures their success.
Yet the thing about being at the pinnacle of your power is that everything is downhill from there. The passage of Trump’s beautiful Bill may well lead to an ugly Republican defeat at the polls in 2026. Polling shows that only 29 per cent of Americans support it.
It seems likely that Republicans will lose their slim majority in the House of Representatives. But it also seems possible that Democrats might re-take the Senate, even though they face a very challenging map there.
Tillis, after voting against Trump’s Bill, announced that he would not seek re-election rather than face a primary challenge. The forced retirement of a popular incumbent increases the chances that Democrats can win his vacated seat in North Carolina.
This Bill is so extreme and irresponsible that it will enable Democrats to win back moderate voters in contested electoral districts. But perhaps more importantly it will enable them to make the case that Bernie Sanders and others have been pushing: that whatever they say, the Republicans are the party of the billionaires, and the Democrats can be the party of working Americans.
Still, the massive federal deficit the Bill creates has planted a ticking time bomb for Democrats. If, and when, they do regain control of the federal government, they will be hampered in pursuing an ambitious agenda because they will be forced first to clean up the Republicans’ mess. That, too, is part of a pattern in American politics evident since the Reagan era.
How can Republicans retain popularity when their agenda so clearly favours the few at the expense of the many?
As they have done since Reagan, they will double down on culture war politics to distract from their economic agenda. Expect to see ramped up assaults on trans rights and racialised attacks on migrants. Republicans will promote misinformation so that Americans don’t realise what they’re really doing.
And, finally, if push comes to shove, Trump may employ authoritarian measures to retain his hold on power. Even so, the biggest legacy of Trump’s big, beautiful Bill might be that it shatters Republicans’ credibility as the party of working Americans.
