The Senate’s Last Stand Against the Big, Beautiful Deficit

Last week, the House passed what Trump is calling the “big, beautiful” bill—an economic stimulus and manufacturing reboot wrapped in flags, tariffs, and America First rhetoric. But markets noticed something else: spending. Bonds sold off. Yields rose. And anyone still pretending we can borrow our way to prosperity got a reminder that eventually, the math wins.

Now the bill heads to the Senate. And here’s where things could get interesting—if, and it’s a big if, the fiscal hawks still have a spine.

The Spending Problem

Let’s not sugarcoat it. The U.S. government now spends $6.5 to $7 trillion annually, and it breaks down like this:

• $1.1 trillion on interest payments (and rising fast)

• $900 billion on defense

• $1.4 trillion on Social Security

• $1 trillion on Medicare

• $1.3 trillion on discretionary spending (much of it bloated and misallocated)

• Plus another $700 billion on miscellaneous welfare, subsidies, and tax expenditures

Every dime is borrowed. There is no austerity. There is no discipline. And there is no end in sight.

Since the 2008 financial crisis, Americans have been sold the fantasy that deficits don’t matter, the Fed will always bail us out, and there’s such a thing as free money. There isn’t. And we’re fat off the lie.

The MAGA Dilemma

Trump’s bill is populist in all the right ways—tariffs to incentivize onshoring, tax cuts to spur growth, deregulation to streamline investment. But it’s also expensive. The House version is loaded with unfunded stimulus, and the “China’s paying for it” line only stretches so far when tariffs bring in $80–$120 billion a year and spending is 10x that.

So now we look to the Senate.

The Hawks’ Playbook

If Senators like Rand Paul, Ron Johnson, Mike Lee, and maybe even Rick Scott still care about fiscal credibility, here’s how they trim the beast without blowing it up:

• $200–$300 billion in defense cuts: not troops or readiness, but waste—bloated procurement, ESG contractors, and programs the Pentagon can’t audit.

• $300 billion in Medicare restructuring: means testing, benefit tweaks, and a harder look at fraud. Trump won’t love it, but might let it slide if it’s framed as “future-proofing.”

• $300 billion in Social Security changes: push retirement age for Gen Z, slow the COLA formula, maybe even introduce a voluntary opt-out for high earners.

• Eliminate step-up in basis: the quiet tax loophole that shelters generational wealth from capital gains. This is a big revenue source (~$200B), but also political suicide in red states unless it’s offset with estate tax relief on true small business and farms if the tax is delayed, not avoided.

• PAYGO triggers: if interest rates spike or revenues fall short, auto-spending cuts engage. Think of it as a fiscal kill switch.

This wouldn’t be Ryanomics. It’s not austerity porn. It’s just math.

But Will They?

Here’s the uncomfortable truth: they probably won’t. The MAGA coalition wants growth and strength, not belt-tightening. Trump’s red line is no cuts to entitlements, full stop. He’ll give you tariffs and tax cuts, but not tough love. And the House already gave him the win.

So what happens now?

The Senate either:

• Grows a spine and makes real cuts, forcing Trump to negotiate, or

• Folds, delivers a “clean win,” and pretends that inflation, debt service, and bond markets don’t matter.

And if they fold? After DOGE—the Department of Government Efficiency, one of the most popular and effective initiatives in modern government—who’s left to rein in spending? Elon basically threw his hands up, which is terrifying.

Because even if DOGE could find the waste and they could audit the process and shine a light on the rot, they can’t legislate structural cuts. That’s Congress. And right now, Congress is fat, happy, and addicted to free lunch economics.

But the lunch bill is coming due.