The struggle to pass Donald Trump’s second-term agenda in Congress has never been between Republicans and Democrats; the minority party has had little real role so far. Instead, it’s been a battle between the House and Senate GOP, between moderates and hard-liners, and, most salient, between Republicans and reality.

Any straightforward accounting points to one conclusion: The president’s “One, Big, Beautiful Bill” (as Republicans insist on formally calling it) would make the country’s fiscal situation worse. It would slash taxes for years to come, and although it would make some budget cuts, they aren’t anywhere near enough to cover the difference. The bill is projected to add trillions of dollars to the deficit; the only real disagreement among analysts is over how many trillions. Yet Republicans leaders keep trying to pretend otherwise.

The past few days have seen a flurry of activity on the bill. On Friday, the House Budget Committee failed to advance the bill after Republican fiscal hawks voted against it. Representative Chip Roy pointed out that the plan relies on lots of upfront spending and claims cuts based on future actions that Congress is unlikely to take. “We didn’t come here to claim that we’re going to reform things and then not do it, right?” he said last week.

Later on Friday, the credit-rating agency Moody’s lowered the nation’s rating from the top Aaa to Aa1 with a negative outlook, citing, um, greater federal spending without greater taxes to cover it. “Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent, large fiscal deficits will drive the government’s debt and interest burden higher,” Moody’s said in a statement.

Republican leaders’ response to the downgrade has been denial. On Meet the Press, Treasury Secretary Scott Bessent said, “I think that Moody’s is a lagging indicator. I think that’s what everyone thinks of credit agencies.” Even insofar as this is true, why exacerbate the existing problems that Moody’s notes? This morning, Majority Leader Steve Scalise told CNBC, “This bond downgrade is another serious blow that shows that America needs to get its fiscal house in order. We start to do that in this bill.” Never mind that Moody’s is responding to exactly the bill’s approach.

Russell Vought, the White House budget chief, made the tortured argument that because the bill cuts more than the 1997 Balanced Budget Act agreement, it must be fiscally conservative, as though the huge reductions in revenue included in the bill are somehow irrelevant. Vought also noted that the GOP’s accounting is based on “$2.5 trillion in assumed economic growth”—in other words, keeping their fingers crossed for the rosiest results. Among other things, the bill would extend tax cuts passed in Trump’s first term, which didn’t live up to GOP projections that they’d pay for themselves.

White House Press Secretary Karoline Leavitt went with a simple up-is-down approach. When asked this morning whether Trump was okay with the bill adding to the deficit, she deadpanned, “This bill does not add to the deficit.”

The Budget Committee voted again yesterday and this time advanced the bill—an unusual weekend vote, in which four hard-liners agreed to vote “present” rather than “nay.” Few details have emerged about what exactly had changed to satisfy or at least pacify them, and the committee’s chair, Jodey Arrington, said that negotiations remain open.

But none of the structural contradictions in the bill have gone away. They are, in fact, the bill’s essence. Republicans are determined to extend Trump’s tax cuts (most of which were set in his first term to expire at the end of 2025), but they are unwilling to raise other taxes, notwithstanding the president’s flirtation with a millionaire’s tax. They are also unwilling to really make spending cuts: Though they plan to slash Medicaid, they realize that attacking Medicare and Social Security is politically toxic. The rub is that Medicaid cuts are also very unpopular. The only way to dress the bill up is with wildly optimistic projections of future growth. And that doesn’t even touch all the other rotten Easter eggs tucked into the bill, such as a provision to prevent federal courts from enforcing contempt rulings against federal officials.

The Republican bill still has quite a long way to go before it passes the House, much less the Senate. The fact that Republicans scheduled a Rules Committee vote for 1 a.m. on Wednesday does not suggest a great deal of confidence in either the substance or the viability of the bill. When markets opened this morning, stocks sank, the dollar was down, and yields on Treasury bonds rose—a sign of dropping confidence in the U.S. government. (Markets recovered a bit in the afternoon.) Congress is trying to wrangle this while Trump’s tariffs have drastically increased the chances of recession—a truth that many of his aides refuse to acknowledge. Reality can be denied, but it always gets the last word.

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P.S.

It takes a lot to laugh about political stories at the moment, as I recently wrote, but I emitted several loud cackles reading Christopher Hooks’s recent dispatch from Greenland for The New Republic. Like Molly Ivins, Hooks is a very funny Texan with a sharp eye for politics. He conjures the bleakness of the Arctic ice sheet as well as the bleakness of the current administration’s imperialist ambitions. “Trump’s push to annex the island is best understood in terms of American psychology and pathology, habits of thought and action. It doesn’t take long to realize that the rest of it is nonsense,” he writes. “What Greenland does have in great abundance is nothing, a biblical amount of nothingness.”

— David

Stephanie Bai contributed to this newsletter.

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