To grasp a party’s true values, study its budget. By that test, Donald Trump’s Republicans loathe science, medical research, victims of overseas disasters, food stamps, education for all age groups, healthcare for the poor and clean energy. Each are severely cut. On the other hand, they love the Pentagon, border security, the rich and allegedly those for whom the rich leave tips. They have no desire to reduce America’s ballooning deficit. What Trump wants enacted is the most anti-blue collar budget in memory. Call it Hunger Games 2025. It is an odd way of repaying their voters.
Some Republicans, like Josh Hawley, the rightwing Missouri senator, warn that this budget could “end any chance of us becoming a working-class party”. Steve Bannon, Maga’s original conceptualiser, says the Medicaid cuts will harm Trump’s base. “Maga’s on Medicaid because there’s not great jobs in this country,” says Bannon. The plutocracy is still running Capitol Hill, he adds. It goes against what Trump promised his base — a balanced budget that did not touch entitlements. Indeed, these were the only two fiscal vows he made during the campaign.
In practice, Republicans in the lower chamber have written a plutocratic blueprint. Their bill was temporarily defeated last Friday by a handful of conservative defectors who complained the draft did not cut spending on the poor enough. They wanted to slash Medicare further and end all clean energy incentives. But what they voted against contains most of their priorities. In addition to the renewed Trump tax cuts, the bill would raise the zero inheritance tax threshold to $30mn for a couple. It would also scrap the tax on gun silencers. These are not cuddly people.
On the surface, it looks as if Elon Musk is out, while Bannon is still around. But rumours of a divorce between Trump and Musk are exaggerated. More likely is that they are taking a marital break. And to judge by the results so far, Musk’s libertarian fiscal instincts are prevailing over Bannon’s.
The two agree on “deconstructing the administrative state”, Bannon’s original phrase that Musk operationalised with his so-called Department of Government Efficiency. But Musk is more ruthless in his libertarianism than Bannon is in his economic populism. Musk thinks most federal payouts are fraudulent and that he and other corporate titans are victims of the deep state. That is in spite of the $38bn his companies have received in subsidies and federal contracts. Trump’s budget suits Musk’s tastes.
Bannon’s blue-collar agenda, on the other hand, takes rhetorical centre stage with Trump but a back seat when it comes to policy. Bannon and a handful of Maga Republicans are opposed to Trump’s tax cuts for the top brackets. He wants a 40 per cent tax on the highest earners. He also wants to regulate Musk and the other big AI titans. “A nail salon in Washington DC has more regulations than these four guys running with artificial intelligence,” Bannon says. But no AI regulation is in sight.
To be fair, some of Bannon’s agenda is going ahead. Trump’s prosecutors are squeezing Mark Zuckerberg’s Meta and attempting to break up Alphabet. But tough settlements could conclude in a Trump shakedown rather than the Silicon Valley trustbusting Bannon wants. The vice-president, JD Vance, appears to side with the anti-monopolists yet is also a protégé of Peter Thiel, who champions a bizarre form of corporate monarchism. My bet is that any adverse ruling against Google or Meta would be a transaction opportunity for Trump. He has no consistent view on competition policy.
On America’s core economic problems — inequality and the middle-class squeeze — Bannon talks a convincing game. But there are two glitches. The first is that he is a fan of cutting back the Internal Revenue Service, which collects taxes. Few things please Trump’s big donors more than the budget item that slashes IRS funding. Second, Bannon’s call for Trump to suspend habeas corpus so that at least 10mn illegal immigrants can summarily be deported seems likelier to hit home than his pro-middle class economics. Trump militantly agrees with Bannon’s dark side. He pays lip service to the light.
Of course, whatever budget is passed by the House of Representatives may be amended in the Senate. But any changes would probably be marginal. People who share Musk’s interests are feeding those of needy Americans into the proverbial woodchipper. Could that potentially split Maga? By the end of Trump’s second hundred days, we will find out how much populist economics matter to Bannon and co.
edward.luce@ft.com
