May 1, 2025 • 9 mins
I can explain this in an understandable way that’s considerably less convoluted than the budget estimating process.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Brian Mudshow podcast is driven by Brayman Motor Cars.
My family is a Brayman Motor Cars family. Your family
should be to visit Braymanmotorcars dot com.
Speaker 2 (00:13):
You have questions, Brian has answers. It's time for today's
Q and AM. Today, this is the Brian mud Show.
Today's gonna understanding.
Speaker 1 (00:23):
The BBB and congressional cost savings Joel, You still down
with the BBB?
Speaker 3 (00:29):
Yeah?
Speaker 4 (00:29):
You know me.
Speaker 3 (00:32):
Now.
Speaker 1 (00:32):
This is brought to you by Melissa Ashes check Mark Collections.
Each day I feature a listener question sent by one
of these methods. You may email me Brian mud at
iHeartMedia dot com, hand me up on social at Brian
mud Radio. You may also use the iHeartRadio talk back feature.
We would love it if you would go to wjn
NO or Verra Patriot inside of the iHeartRadio app and
(00:55):
make us your number one PRESEP would love it if
you would then make the Brian Mudshow podcast your number
two pre set. When you do that, we are right
there for you every time you go into the app.
Super easy to find that we can always listen on
demand and the case of my podcast, never miss any
of the content always there for you, all right. So
(01:16):
today's by the way, while you're in there, you'll see
a little microphone button. You see it, you tap it,
you may lay down the message right there, maybe for
a future Q and A. And on that note, today's
note is this. I hope that Trump big beautiful bill
is passed soon. And in this bill there's a reportedly
a spending cut of one and a half trillion dollars.
(01:39):
But I understand this is over ten years. If so,
in with the US deadlomit just increase another five trillion.
There is danger one day of real default. Spending cuts
must be today and much more. Trump wisely wants to
grow the economy and the tax income base for increase
(01:59):
the taxing cut base for the government. But if the
debt keeps rising, there may be default soon. Sadly, pray
for Trump and his administration. So yes to the prayers.
I'm by the way, I do pray for the president
every day. And actually your note reminded me that I
should be praying for Congress too. I actually prayed for
(02:19):
Congress last night to do the right thing. That to
the add that to the rundown for sure. Now on
this note, give you the idea of this is the latest.
This is where we stand as of this morning. Ryan
schmelts with a little Lindsey Graham.
Speaker 4 (02:36):
Senate Budget Committee Chairman Lindsay Graham says he's committed to
finding one point five to two trillion dollars in spending
cuts as part of Republicans one big beautiful bill.
Speaker 1 (02:46):
I think, delaway, you don't have to do that is
be able to go into the to the programs that
are being abused and fixed on. Okay, that's big, right,
especially if you are cost conscientious, as certainly the listeners
submitted this note. Is because the House had been the
more aggressive in terms of cost savings, the Senate had not.
That's why we almost didn't get to reconciliation in the
(03:06):
first place. So Lindsey Graham, who was leading the Senate effort,
saying yeah, I'm there on the one and a half
to two trillion thing. Now, that's that's massive, that's massive,
tells you the conversation has shifted in the House's direction
now as we take a look at this thing. The
federal budget process complex, to say the least, and the
(03:26):
way that legislation is scored or determined to impact our
federal deficit a bit convoluted too. But that said, I
think I can understand explain this in an understandable way.
We'll use Joel as a parameter that is considerably less
convoluted than the budget estimating process. So let's start with
(03:49):
how this happens and why it happens the way that
it does. The federal government's budgeting process is mandated under
the can Congressional Budget Act of nineteen seventy four. You know,
usually I make like, you know, we go back a
little ways, and I'm making Biden reference or a joke.
(04:10):
Was he in the Senate in seventy He might have
actually been there at that point.
Speaker 3 (04:13):
I think he was. Joe Biden was definitely in the Senate.
Speaker 1 (04:18):
I want to say it was close, might be a
little early, but it was a minimum. No. Shoot, I've
derailed myself because I'm so curious about this.
Speaker 3 (04:29):
So yeah, no, I think he might have been in there.
And I'll come back and give verification word and start
seventy three. He was Biden literally voted on this thing.
Speaker 1 (04:38):
Wow, Biden was in there voting for the Congressional Budget
Act of nineteen You can thank you can thank Biden.
Speaker 3 (04:48):
For the process.
Speaker 1 (04:50):
So the Act not only established the process by which
budgeting must take place, but it also established an office
that's at the root of the budgeting process, the Congressional
Budget Office the CBO.
Speaker 3 (05:02):
You've heard of that, Rachel, Yeah.
Speaker 1 (05:04):
Okay, Now that's the office that is tasked with estimating
the financial impact of all legislation under consideration, not just budgets.
So I'm going to come back to that aspect of
the budgeting process in a moment. But first, here is
a breakout of the five step process of federal budget
budgeting that is mandated under that law those past and
(05:25):
seventy four. Step one the President's budget proposal. The process
begins with the president's submitting a budget proposal to Congress.
The second step Congressional budget resolution. The House and Senate
budget committees review the president's proposal and develop a budget resolution.
(05:48):
I will say in theory, because how many times you
want to bet they never even dented like the president's
proposal and just one did their own thing. But anyway,
Number three appropriations process. The House in Senate Appropriation committees,
through their twelve subcommittees, draft appropriations bills to allocate discretionary
spending This is usually where they will do the baseline
(06:09):
budgeting thing because they don't even know what goes on.
Number four reconciliation. Of the five steps, this is the
optional process and it's the only process though that can
pass a budget with simple majorities in both chambers of Congress,
and it is the process that has been adopted for
this year's budgeting process. Now under reconciliation in mandates that
(06:33):
projected impacts to the federal deficit are incidental, cannot be
more than incidental, or will reduce the deficit. So there
are restrictions that come with reconciliation. And then five final
budget approval and enactment, that is when Congress passes it
and the President is signs it into law. Okay, so
(06:57):
about that ten year projected spending thing. When the CBO,
the Congressional Budget Apple Office, was established and was given
the task of estimating the financial impact of the legislation,
they had to figure out how to set standards for
doing so. The CBO's directive under the law was to
assess the long term fiscal sustainability of legislation, so immediately
(07:21):
adopted was a ten year standard of judgment and the
ideal idea behind the ten year thing was to prevent
potential short term shenanigans from taking place. For example, let's
say that you're in Congress right now, You've got an
election coming up.
Speaker 3 (07:36):
You want to try to win votes, so you're going
to do all the goodies.
Speaker 1 (07:39):
I'm going to put all the goodies in here, and
look what I did for you without any consideration to
the consequences. They're going to come for paying for it
after the fact, and so that is why they do
it on this ten year standard, so you can't play
short term shenanigans that can end up having problems for
future congresses and sustainable Bloe Lune effects down the road.
Speaker 3 (08:01):
Does that kind of make sense, Jill, Yeah, okay, it
makes yeah, knowing politicians, yes, a lot of sense.
Speaker 1 (08:07):
So the tenure standard is viewed as a balance between
short term accuracy and then what they call long term trends,
because in reality, everybody knows none of us know what
the heck is going to be in ten years, right,
You really are just guessing, So they don't take it
like literally ten years out. They say this is the
projected trend. So to your point, the reductions of government
(08:30):
spending are spread out over a decade, and even with
the House's current BBB version, which calls for the largest
spending cuts, you know, we are talking about an estimated
deficit increase of two point eight trillion.
Speaker 3 (08:43):
Okay, so that's where we are.
Speaker 1 (08:45):
Things are probably going to change before this is all
said and done, so don't get super hung up on
that number, because that's just what the framework that we've
been given right now now is taking on another two
point eight trillion in debt over the next ten years
a good thing, obviously not But at the same time,
consider this, the last five years we've run annual deficits
at three point one trillion, two point eight trillion, one
(09:07):
point four, one point seven and one point eight. We've
had two years where we've done at least as much
as we're talking about doing in a decade here. So
if the annual deficit does shrink to an annualize two
hundred and eighty billion.
Speaker 3 (09:19):
Over the next decade, again not good.
Speaker 1 (09:21):
But the last time we even had a year with
the deficit that low was two thousand and seven. So
these changes are made in theory we might be able
to grow our way out of this with fiscal restrain
over time,
The Brian Mudshow podcast is driven by Brayman Motor Cars.
My family is a Brayman Motor Cars family. Your family
should be to visit Braymanmotorcars dot com.
Speaker 2 (00:13):
You have questions, Brian has answers. It's time for today's
Q and AM. Today, this is the Brian mud Show.
Today's gonna understanding.
Speaker 1 (00:23):
The BBB and congressional cost savings Joel, You still down
with the BBB?
Speaker 3 (00:29):
Yeah?
Speaker 4 (00:29):
You know me.
Speaker 3 (00:32):
Now.
Speaker 1 (00:32):
This is brought to you by Melissa Ashes check Mark Collections.
Each day I feature a listener question sent by one
of these methods. You may email me Brian mud at
iHeartMedia dot com, hand me up on social at Brian
mud Radio. You may also use the iHeartRadio talk back feature.
We would love it if you would go to wjn
NO or Verra Patriot inside of the iHeartRadio app and
(00:55):
make us your number one PRESEP would love it if
you would then make the Brian Mudshow podcast your number
two pre set. When you do that, we are right
there for you every time you go into the app.
Super easy to find that we can always listen on
demand and the case of my podcast, never miss any
of the content always there for you, all right. So
(01:16):
today's by the way, while you're in there, you'll see
a little microphone button. You see it, you tap it,
you may lay down the message right there, maybe for
a future Q and A. And on that note, today's
note is this. I hope that Trump big beautiful bill
is passed soon. And in this bill there's a reportedly
a spending cut of one and a half trillion dollars.
(01:39):
But I understand this is over ten years. If so,
in with the US deadlomit just increase another five trillion.
There is danger one day of real default. Spending cuts
must be today and much more. Trump wisely wants to
grow the economy and the tax income base for increase
(01:59):
the taxing cut base for the government. But if the
debt keeps rising, there may be default soon. Sadly, pray
for Trump and his administration. So yes to the prayers.
I'm by the way, I do pray for the president
every day. And actually your note reminded me that I
should be praying for Congress too. I actually prayed for
(02:19):
Congress last night to do the right thing. That to
the add that to the rundown for sure. Now on
this note, give you the idea of this is the latest.
This is where we stand as of this morning. Ryan
schmelts with a little Lindsey Graham.
Speaker 4 (02:36):
Senate Budget Committee Chairman Lindsay Graham says he's committed to
finding one point five to two trillion dollars in spending
cuts as part of Republicans one big beautiful bill.
Speaker 1 (02:46):
I think, delaway, you don't have to do that is
be able to go into the to the programs that
are being abused and fixed on. Okay, that's big, right,
especially if you are cost conscientious, as certainly the listeners
submitted this note. Is because the House had been the
more aggressive in terms of cost savings, the Senate had not.
That's why we almost didn't get to reconciliation in the
(03:06):
first place. So Lindsey Graham, who was leading the Senate effort,
saying yeah, I'm there on the one and a half
to two trillion thing. Now, that's that's massive, that's massive,
tells you the conversation has shifted in the House's direction
now as we take a look at this thing. The
federal budget process complex, to say the least, and the
(03:26):
way that legislation is scored or determined to impact our
federal deficit a bit convoluted too. But that said, I
think I can understand explain this in an understandable way.
We'll use Joel as a parameter that is considerably less
convoluted than the budget estimating process. So let's start with
(03:49):
how this happens and why it happens the way that
it does. The federal government's budgeting process is mandated under
the can Congressional Budget Act of nineteen seventy four. You know,
usually I make like, you know, we go back a
little ways, and I'm making Biden reference or a joke.
(04:10):
Was he in the Senate in seventy He might have
actually been there at that point.
Speaker 3 (04:13):
I think he was. Joe Biden was definitely in the Senate.
Speaker 1 (04:18):
I want to say it was close, might be a
little early, but it was a minimum. No. Shoot, I've
derailed myself because I'm so curious about this.
Speaker 3 (04:29):
So yeah, no, I think he might have been in there.
And I'll come back and give verification word and start
seventy three. He was Biden literally voted on this thing.
Speaker 1 (04:38):
Wow, Biden was in there voting for the Congressional Budget
Act of nineteen You can thank you can thank Biden.
Speaker 3 (04:48):
For the process.
Speaker 1 (04:50):
So the Act not only established the process by which
budgeting must take place, but it also established an office
that's at the root of the budgeting process, the Congressional
Budget Office the CBO.
Speaker 3 (05:02):
You've heard of that, Rachel, Yeah.
Speaker 1 (05:04):
Okay, Now that's the office that is tasked with estimating
the financial impact of all legislation under consideration, not just budgets.
So I'm going to come back to that aspect of
the budgeting process in a moment. But first, here is
a breakout of the five step process of federal budget
budgeting that is mandated under that law those past and
(05:25):
seventy four. Step one the President's budget proposal. The process
begins with the president's submitting a budget proposal to Congress.
The second step Congressional budget resolution. The House and Senate
budget committees review the president's proposal and develop a budget resolution.
(05:48):
I will say in theory, because how many times you
want to bet they never even dented like the president's
proposal and just one did their own thing. But anyway,
Number three appropriations process. The House in Senate Appropriation committees,
through their twelve subcommittees, draft appropriations bills to allocate discretionary
spending This is usually where they will do the baseline
(06:09):
budgeting thing because they don't even know what goes on.
Number four reconciliation. Of the five steps, this is the
optional process and it's the only process though that can
pass a budget with simple majorities in both chambers of Congress,
and it is the process that has been adopted for
this year's budgeting process. Now under reconciliation in mandates that
(06:33):
projected impacts to the federal deficit are incidental, cannot be
more than incidental, or will reduce the deficit. So there
are restrictions that come with reconciliation. And then five final
budget approval and enactment, that is when Congress passes it
and the President is signs it into law. Okay, so
(06:57):
about that ten year projected spending thing. When the CBO,
the Congressional Budget Apple Office, was established and was given
the task of estimating the financial impact of the legislation,
they had to figure out how to set standards for
doing so. The CBO's directive under the law was to
assess the long term fiscal sustainability of legislation, so immediately
(07:21):
adopted was a ten year standard of judgment and the
ideal idea behind the ten year thing was to prevent
potential short term shenanigans from taking place. For example, let's
say that you're in Congress right now, You've got an
election coming up.
Speaker 3 (07:36):
You want to try to win votes, so you're going
to do all the goodies.
Speaker 1 (07:39):
I'm going to put all the goodies in here, and
look what I did for you without any consideration to
the consequences. They're going to come for paying for it
after the fact, and so that is why they do
it on this ten year standard, so you can't play
short term shenanigans that can end up having problems for
future congresses and sustainable Bloe Lune effects down the road.
Speaker 3 (08:01):
Does that kind of make sense, Jill, Yeah, okay, it
makes yeah, knowing politicians, yes, a lot of sense.
Speaker 1 (08:07):
So the tenure standard is viewed as a balance between
short term accuracy and then what they call long term trends,
because in reality, everybody knows none of us know what
the heck is going to be in ten years, right,
You really are just guessing, So they don't take it
like literally ten years out. They say this is the
projected trend. So to your point, the reductions of government
(08:30):
spending are spread out over a decade, and even with
the House's current BBB version, which calls for the largest
spending cuts, you know, we are talking about an estimated
deficit increase of two point eight trillion.
Speaker 3 (08:43):
Okay, so that's where we are.
Speaker 1 (08:45):
Things are probably going to change before this is all
said and done, so don't get super hung up on
that number, because that's just what the framework that we've
been given right now now is taking on another two
point eight trillion in debt over the next ten years
a good thing, obviously not But at the same time,
consider this, the last five years we've run annual deficits
at three point one trillion, two point eight trillion, one
(09:07):
point four, one point seven and one point eight. We've
had two years where we've done at least as much
as we're talking about doing in a decade here. So
if the annual deficit does shrink to an annualize two
hundred and eighty billion.
Speaker 3 (09:19):
Over the next decade, again not good.
Speaker 1 (09:21):
But the last time we even had a year with
the deficit that low was two thousand and seven. So
these changes are made in theory we might be able
to grow our way out of this with fiscal restrain
over time,
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