It's going to do one thing, and that is it's going to avoid a large tax increase in 2026 that would almost certainly lead to a downturn.
And that's its great virtue.
Past that, it's not outstanding tax policy.
It's not a real step forward on the fiscal problems, which we obviously know are really pressing given the downgrade on Friday.
So, you know, in terms of what's at stake here, it's an extension of the 2017 law, so that's more of the same.
It's not going to do much for the economy.
There are some provisions to improve business investment and research and development.
They are, I think, positives, modest.
And then there's a whole collection of promises the president made on the campaign trail, which in my view will have very little to do with economic growth and actually go the wrong direction from a tax policy point of view.
You know, the rule in tax policy is broaden the base, treat everything the same.
This part pulls out special favors for overtime or tips or seniors.
So it's not another step in tax reform.
It's actually very different than the 2017 effort.
Moody's is one of three very important rating agencies where they look at a borrower and say, you are credit worthy, you're going to pay back for sure.
There's some risk associated with you.
The first to downgrade the United States was Sander ⁇ Poor's in 2011.
They said, you're no longer AAA guaranteed to repay.
We have some concerns.
Those concerns were about the politics.
2023, Fitch Ratings, the second group, did essentially the same thing.
Said, the U.S. is showing some inability to manage its finances.
Those are largely political disputes over debt ceiling increases or shutting the government.
We've been through these episodes.
This is very different and more, I think, troubling because what Moody said is you have a lot of debt and you have a lot of interest and you might not be able to pay it.
And for that reason, we're downgrading you from a surefire repay to a little bit of risk.
The Biden administration was in the recovery portion.
And Kristen, it would have been, if not for Senators Manchin and Sinema, who were no longer in the Democratic caucus, it would have been $4 or $5 trillion more.
At some point in our trajectory, which is just ever-increasing amounts of debt, even relative to the size of a growing economy, at some point, international creditors take a look at that and lose the confidence that you will repay either the interest or the principal in a timely fashion.
And as a result, they no longer extend you the credit.
Now, the trouble is, I don't know what that day that is.
You don't know what day that is.
No one knows what day that is.
unidentified
We're going to leave this to take you live to the U.S. House for votes.