Larry Kudlow: Congressional spending drama a lesson for GOP to ‘simplify’



A lesson for the GOP: simplify, simplify, simplify, and that’s what the riff is all about.

The most important thing I’ve seen this whole New Year Congressional spending drama and the difficulty of reaching agreement is what this tells us about the difficulty of more than one reconciliation bill next year.

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

And avoiding a government shutdown is desirable, not in economic terms, but in political terms, it could give Senator Chuck Schumer more power by certifying the presidential election on January 6 and even the inauguration on January 20 .

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

Now, House Republicans have reached a third continuing resolution deal and it awaits President Trump’s approval.

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It will look a lot like the short term deal that was defeated last night. It would delay the debt ceiling until March 14 and would reportedly cut roughly $2.5 trillion in federal spending during yet-to-be-determined reconciliation bills next year.

But as everyone can clearly see, this relatively simple exercise of extending funding over a couple of weeks has been very difficult, very contentious and very unpredictable.

And I think it’s a leading indicator of the potential trouble the GOP may find itself in next year if they continue to casually believe they can pass multiple reconciliation bills in 2025. They must be kidding.

Recent McLaughlin & Associates polls show that nearly half of voters believe we are in a recession and more than four-fifths continue to worry about inflation.

Thirty-five percent of voters say it’s more important for Trump to secure the border, followed closely by 26% who say they will continue to grow by making Trump’s tax cuts permanent. The global economy remains the number 1 problem, surpassing the border.

I Trump Tax Cuts 2.0 are very popular: 82% favor ending federal taxes on Social Security income, 71% favor ending federal tip taxes for service workers, 64% are favor ending federal taxes on overtime pay for workers and 70% favor making the Trump 2017. tax cuts permanent.

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

But back to the legislative strategy that will be so crucial, Mr. Trump’s policy term of the election, and I think that Republicans who think that it will be easy to pass several reconciliation bills are very wrong.

The parliamentary confusion within Republican ranks in recent days, centered on what should be a relatively straightforward exercise, is a major red flag warning against overcomplicating things next year.

Delaying the tax cuts would be a big mistake. Delaying the tax cuts will not put extra money in the hands of workers. Delaying tax cuts won’t fatten blue-collar wallets. These are the people who voted for Mr. Trump in the battleground states and they gave him his landslide.

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The GOP has winning issues, like closing the border; cut taxes; and drill, boy, drill; and cut the regulatory state. Collect them all and do it as soon as possible.

And be realistic about the nearly impossible problems that multiple massive reconciliation bills will create.

A nearby source President Trump he says he wants a big, beautiful ticket. As usual, he’s right.

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



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