Big Bill Gets Some Big Backlash

I’m glad to hear a number of significant conservative voices fully agreeing with my own position on Trump’s Big Beautiful Bill. Apparently, there is still a little life left in the true conservative minority that remains within the Republican Party. Let’s start with Elon Musk, who is more a Republican of recent convenience, but he just stated clearly that he is “disappointed” in Big Beautiful Bill:

Elon Musk's bromance with President Donald Trump has taken a hit after the tech billionaire blasted the White House for 'undermining' him and treating DOGE like 'whipping boys….'

'It undermines the work that the DOGE team is doing,' Musk bluntly told CBS….

'The massive spending bill, frankly … increases the budget deficit….

Musk twisted the knife a little further with outspoken criticism of Trump's 'Big, Beautiful Bill.'

'I think a bill can be big or it can be beautiful, but I don't know if it can be both,' he said….

'The federal bureaucracy situation is much worse than I realized,' he said.

'I thought there were problems, but it sure is an uphill battle trying to improve things in D.C., to say the least.'

Yeah, because he didn’t even have Trump on his side when Trump and the House Republicans were birthing Big Beautiful Bill, which completely failed to capitalize on a single thing DOGE said it accomplished. While DOGE’s $160-billion accomplishment in waste elimination remain far, far short of the $2-trillion originally promised by Musk, Big Bill doesn’t even include those savings that were supposedly already realized.

These comments from a couple of big beautiful influencers on X with Elon’s response sum up the truly sad situation left by Big Beautiful Bill:

X

One senator heard the backlash and agreed with the conclusions about Bacon Bill:

Sen. Ron Johnson blasts House Republicans for failing to codify DOGE spending cuts into law.

No one else is asking the question—but @SenRonJohnson is sounding the alarm.

“I would ask the question: where are the rescission packages so we can codify the DOGE savings?”

Even Trump fan girl Maria Bartiromo said,

This is really important because I was questioning why it is that the House Republicans refused to codify into law … the DOGE cuts! What’s the problem?

Johnson agrees with her and asks,

Where has Trump been in terms of putting pressure on the House to actually codify those recessions?

Senator Rick Scott also agrees:

Just moments ago, Sen. Rick Scott said he's a NO on the One Big Beautiful Bill in its current form. He's demanding more spending cuts and setting America on the path to a balanced budget.

“Oh absolutely I’d vote no. If they brought it to the floor right now there’s not a chance it would get to 51 votes. We all know we have to balance the budget. We all know it’s getting harder to sell our treasuries.”

As Musk warned prior to Big Fat Bill’s passage (may he rest in peace):

The ability of Doge to operate is a function of whether the government, and this includes the Congress, is willing to take our advice. We are not the dictators of the government. We are the advisors

Apparently, the cacophony of voices against Big Bill have caught the White House’s ears because suddenly a package of rescissions is on its way belatedly to congress:

The package set to land on Capitol Hill is expected to reflect only a fraction of the DOGE cuts, which have already fallen far short of Musk's multi-trillion-dollar aspirations. The two Republicans said it will target NPR and PBS, as well as foreign aid agencies that have already been gutted by President Donald Trump's administration.

The easy stuff for sure, but it is on its way with Speaker Mike Johnson’s approval:

@ElonMusk and the entire @DOGE team have done INCREDIBLE work exposing waste, fraud, and abuse across the federal government - from the insanity of USAID’s spending to…

The House is eager and ready to act on DOGE’s findings so we can deliver even more cuts to big government that President Trump wants and the American people demand.

That’s a nice way to package it … by saying “deliver even more cuts.” Big Bloated Bill didn’t look like you delivered any cuts, Mr. Johnson, so way to paint lipstick on that pig. However, the rage has been heard already, and now Johnson promises quick action:

We will do that in two ways:

1. When the White House sends its rescissions package to the House, we will act quickly by passing legislation to codify the cuts.

2. The House will use the appropriations process to swiftly implement President Trump’s 2026 budget.

Steve Miller, in defense of what congress and Trump did, says (lamely in my opinion),

DOGE cuts are to discretionary spending. (Eg the federal bureaucracy). Under senate budget rules, you cannot cut discretionary spending (only mandatory) in a reconciliation bill.

When you own both houses of congress you don’t get to make excuses on something this central to Republicans’ decades-long claim that they will reduce government expenses for NOT doing it (once again) when you are the majority in the House of Representatives, the Senate and fully control the Executive Branch. We don’t care if it is hard because your majorities are slim. You didn’t do it, and now you’re being pressed to do the hard work of getting real cuts, through congress. After all, cuts to “discretionary spending” also means the cuts, themselves, will be discretionary.

We should be way past leaving major cuts to the discretion of department heads. Congress needs to force much deeper cuts that are embedded in law and reformation of departments and agencies. So, then, avoid the reconciliation process at this point and add to this bill substantial cuts by going through all the processes against all the filibusters, etc., the old fashioned way because you couldn’t wind up any WORSE than what you did with Bond-Hog Bill, which is the most bloated pork-fat budget ever!

You can also start approving some tax increases for the incredibly wealthy 1% to save Social Security and Medicaid by ending the obscene protective caps and special low tax rates the fat-and-happy get on 99% of their income. Stop giving them built-in welfare. Make them pay the same tax rate the top of the middle-class has to pay, and make them pay it on the same percentage of their total income from all sources, not just wages, because they don’t make their big money off of wages! You’ve got a WHOLE LOT MORE legislation to write and pass if you want to actually accomplish anything.

It’s a marathon looking forward, and what you have accomplished was far worse than nothing at all because, as Musk said, it actually made deficits WORSE. So, total FAIL! Time to ditch your smarmy little smile, Johnson, and actually do the hard work of major government reform because you only have a year and a half left to get it done before you are voted out of power.

Outrunning grizzlies

As we wait endlessly for congressional Republicans to begin the actual tough work that forces them to wrangle daily with Democrats, now that they’ve got the EASY massive spending INCREASES out of the way along with a few additional tax cuts they made at a time when revenue is already falling far short of what is needed, I need to point out faithfully whenever things run the opposite of the way I say they will be going.

While there have been a few Treasury auctions that showed exactly the trouble in Treasuries I was expecting, today delivered a spectacular Treasury auction of 5YR notes that saw the highest number of foreign bids in history. It could be that it was money fleeing desperate Japan. In which case, the US benefited by simply not being the worst horse at the glue factory.

A little over thirty days after one ugly coupon auction after another, when the market was panicking that the US had "lost its reserve status" and any Treasury auction could well be the last (it turns out that "privilege" belonged to Japan, where last week we almost saw the last ever 20Y auction), demand for US paper is once again off the charts... and we aren't even talking about yesterday's stellar 2Y auction. Moments ago Bessent's Treasury sold $70BN in 5 Year paper which saw the highest foreign demand in history!

I’m going to venture a guess this was capital flight from Japan, which is running in panic mode right now. Moreover, as I have said in the past, there are no straight lines in economics—at least not for very long—so we’ll have to see if this kind of stellar foreign demand holds or was a one-off. I wouldn’t put any bets on the second-worst horse at the glue factory (the US) if I were you for now, though. Right now we are likely just in the enviable position where two men are being chased by a grizzly bear, and the one most out-of-breath yells, “I hope you can outrun a grizzly,” as he falls behind, to which the other responds, “I don’t have to outrun a grizzly. I only have to outrun YOU.”

The Taco wagon is the new bandwagon on Wall Street

Finally, there is a new Trump trade on Wall Street. It’s called the TACO trade, in which traders are making bank by betting contrary to where the market goes whenever Trump places a new tariff. It stands for Trump Always Chickens Out:

Reportedly first coined by Financial Times columnist Robert Armstrong, the term has quickly gained traction among investors who are profiting from what they say is a predictable pattern: Trump threatens steep tariffs, the markets plunge, and days later he backs off in a way that prompts a rebound.

As I commented on yesterday,

The latest example came over the weekend. On Friday, Trump sent markets reeling by announcing sweeping 50% tariffs on European imports. But by Sunday, the White House abruptly paused the move, citing a fresh round of trade talks. When the markets reopened on Tuesday, stocks surged.

I’m going to start calling them the “yo-yo tariffs.”

The TACO trade strategy is reportedly being openly embraced by some investors, according to the New York Post.

“Once he delivers bad news, investors are buying those stocks when they are beaten down waiting for him to chicken out and watching those stocks rebound in value,” said Ted Jenkin, president of Exit Stage Left Advisors, in an interview with the outlet.

Economists say this type of market behavior, explicitly betting against a sitting president’s follow-through, is unprecedented.

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