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Estimated reading time of this week’s update: 15 minutes
(1) IMPACT OF TRUMP ADMINISTRATION ACTIONS DURING THE FIRST 8 MONTHS:
1. TRUMP’S TARIFF TAXES LEAD TO RISING PRICES, SLOWING GROWTH, AND INTERNATIONAL TENSIONS: President Trump’s global tariffs are raising consumer prices, curbing business investment by spreading economic uncertainty, and increasing international tensions by replacing a rules-based trade system with the chaos of tariffs and counter-tariffs.
U.S. Importers and Consumers hit by Tariff Taxes: The White House continues to claim falsely that foreign governments pay U.S. import tariffs; the reality is that U.S. importers pay tariff taxes when goods are brought into U.S ports—with costs eventually passed along to consumers as higher prices.
The most recent core inflation rate is 3.1% as of July 2025; the core rate measures the change in prices of goods and services excluding the volatile food and energy sectors.
Growth is down: During the first half of 2025 “the U.S. economy only expanded at a muted 1.4% average pace…revealing soft underlying private sector demand.”
Overall impact of tariffs: The Yale Budget Lab projects the overall impact of Trump’s unnecessary trade war will be clothing prices rising by 37%, unemployment rising 0.7%, and the overall economy 0.4% smaller. Friday’s weak jobs report showed U.S. employers created just 22,000 new jobs in August. Read more.
Recession concerns: Moody’s is saying the U.S. economy is “on the precipice of recession,” blaming U.S. tariffs and restrictive immigration policies. Friday’s revised jobs numbers for June showed a loss of 13,000 in June—the first loss since December 2020.
2. OBBBA EXPLODES DEFICITS, PUBLIC DEBT: Deficits will increase by $4.1 trillion over 10 years due to enactment of the “One Big Beautiful Bill Act (OBBBA),” escalating annual interest payments on the public debt to $1.8 trillion by 2035—equivalent to nearly half of all individual income tax receipts. OBBBA's impact on the national debt is projected to create a “feedback loop” where higher debt leads to higher interest rates, which in turn leads to even higher interest payments, further increasing the debt.
While it is true that increased tariffs are currently bringing more revenues into the Treasury, the new tariff revenues will at most offset OBBBA’S deficit increases, but do nothing to reduce ongoing structural deficits which were already nearing $2 trillion per year before enactment of OBBBA.
3. 17 MILLION -- BIGGEST EVER ROLL BACK IN HEALTH INSURANCE COVERAGE: Contrary to President Trump’s repeated promises to do no harm to the three major entitlement programs—Social Security, Medicare, and Medicaid—OBBBA cuts Medicaid by nearly $1 trillion over 10 years and—without further congressional action—will trigger a half trillion dollars in automatic cuts to Medicare.
The Medicaid program—which provides health coverage for low-income and disabled Americans of all ages as well as long-term care for seniors—will be cut by provisions that: impose new work requirements for adults 19-64; place caps on state provider taxes that states use to fund their portion of the Medicaid program; place limits on state-directed payments to providers; increase the frequency of eligibility determinations; reduce retroactive coverage; and narrow the eligibility of lawfully present immigrants. See this KFF summary for more details on the cuts.
The Congressional Budget Office estimates that 11.8 million Americans could lose health coverage as a result of these Medicaid cuts. In addition, the impending lowering of Affordable Care Act premium subsidy rates at the end of this year, and other pending policy changes by the Administration, could add another 5.1 million Americans losing coverage, leading to an overall increase in uninsured individuals of 17 million—the “biggest roll back in health insurance coverage ever due to federal policy changes.”
The Medicare program—which provides national health insurance to seniors and disabled workers—will also be cut as a result of OBBBA. The Statutory Pay-As-You-Go Act of 2010 (“Statutory PAYGO”) triggers automatic Medicare cuts when legislation is enacted that increases deficits. This “PAYGO” requirement will cut Medicare by 4 percent in each of the next 10 years—amounting to a half trillion dollars in cuts. It is unclear, as yet, how the cuts might impact covered services.
4. GROWING HUNGER: Millions will go hungry in the U.S. and around the world due to:
$186 billion in nutrition cuts in OBBBA including cuts to the SNAP program (formerly “food stamps”);
millions of pounds of emergency food aid rotting in warehouses around the world due to Trump shuttering USAID supply chains; and
failure of the Administration’s new food delivery system in Gaza run by contractors inexperienced in humanitarian relief.
5. MAKING AMERICA MORE VULNERABLE TO WILDFIRES, DROUGHTS & FLOODS, AND SURRENDERING THE GREEN ENERGY MARKET TO CHINA: There is a global scientific consensus that carbon dioxide (CO2) emitted by fossil fuels traps warm air in the atmosphere—driving rapidly increasing wildfires, droughts, floods and extreme weather. Yet, as part of OBBBA, the Administration has rolled back nearly all of the recent measures taken to slow these increasing dangers—terminating tax incentives and federal grants for solar panels, wind power, electric vehicles, heat pumps, and battery storage. Most recently, the EPA made the U.S. an outlier nation by denying that CO2 emissions cause global warming. In addition, the withdrawal of investments in green energy is surrendering this fast growing global green energy market to China—placing American companies at a huge disadvantage.
6. MASS ARRESTS AND DEPORTATION OF IMMIGRANTS—MOST OF WHOM HAVE NO CRIMINAL HISTORY—HURT FAMILIES AND THE ECONOMY: Nearly 200,000 undocumented U.S. residents (most of whom have no criminal record) have already been arrested by ICE agents—in some cases using unprecedented tactics such as arrest by masked federal agents. The Administration is using so-called “expanded expedited removal” to enable deportation without a hearing. Other arrestees await hearings in overcrowded detention centers.
OBBBA includes $170 billion to enable the Trump Administration to deport one million immigrants per year. This extraordinary use of federal resources—most of it borrowed due to ongoing deficits—is more than the combined annual budgets for all state and local law enforcement agencies.
In addition to this stunning use of federal resources to deport mostly non-criminal immigrants, these mass deportations are shrinking the U.S. labor force—undercutting economic growth, increasing labor costs and shortages, and reducing tax collections from immigrant workers.
7. MAKING HIGHER EDUCATION LESS ACCESSIBLE: OBBBA imposed limits on new student loans and increased monthly repayments for existing loans—reducing federal funding of student financial aid by $314 billion and raising the specter of a “mass waive of defaults.” OBBBA eliminates Grad PLUS loans reducing student access to medical, law, and other professional schools (exacerbating the physician shortage), imposes a lifetime cap on loans for graduate and professional programs, limits Parent PLUS Loans, places a lifetime limit on education-related borrowing, and delays for 10 years regulations to help student borrowers who have been defrauded. Read more about the financial aid reductions.
8. TRUMP ACTIONS HAVE UNDERMINED THE RULE OF LAW BY:
Politicizing the Department of Justice and using it to exact political and personal retribution;
Attacking judges and ignoring the independence of the judiciary;
Fueling speculation he could run for an unconstitutional 3rd term;
Promoting influence-peddling by pressuring people to contribute to Trump’s inauguration fund and presidential library; and
Earning billions through meme coins and other crypto currencies that leverage the office of the presidency for personal profit. Read more.
9. INCREASING THE RISK OF WAR: President Trump’s national security policies have increased the risks of war with Russia and China for three reasons:
President Trump’s pausing of sanctions on Russia, and pausing direct U.S. assistance to Ukraine—along with his public waffling over support for NATO—have enabled a major escalation of Russian attacks on Ukraine since January;
The weakening of U.S. reliability and support for NATO and Ukraine encourages a watchful China in its ambitions to invade Taiwan; and
President Trump’s decision to begin developing a “golden dome” missile defense system (with $25 billion in start-up funding OBBBA) will trigger a wildly expensive and dangerously destabilizing arms race in space with China and Russia in the pursuit of hypothetical technologies.
10. CHAOTIC FIRINGS AND FORCED RESIGNATIONS OF FEDERAL EMPLOYEES IS LEADING TO DIMINISHED SERVICES FOR THE AMERICAN PEOPLE:
a reduction in services to Veterans due to VA losing 30,000 employees;
declining pandemic preparedness due to CDC losing 13%;
slower identification and cleanup of toxic wastes due to EPA losing 23%;
slower approval of new drugs and identification of health risks due to FDA losing 17%;
decline in health and family services due to HHS losing 20,000;
fewer advances in cures and treatments due to NIH losing 1,200 employees including senior researchers;
deterioration of national parks due to the Park Service losing 1,000 employees;
slower processing of disaster loans due to SBA losing more than 40% of its employees;
loss of energetic young people in community services due to AmeriCorps firing 84%;
loss of consumer protections against predatory lenders due to CFPB firing 88%; and
America losing influence throughout the world due to the shutdown of USAID (with China quickly filling the vacuum).
11. POLITICIZING ECONOMIC DATA MAY LEAD TO HIGHER INTEREST RATES: Information and data drive many government programs: Social Security benefits, many tax provisions, government and military retirement programs, $2.1 Trillion in Treasury Inflation-Protected Securities (TIPS), and eligibility for many income-based safety net programs. President Trump’s recent firing of BLS chief Erika McEntarfer because he didn’t like the most recent data showing a slowdown in hiring suggests his intention to place essential data gathering and reporting under the direction of political hacks and sycophants. (See this disturbing CNN report on Trump’s pick to lead BLS.) Consider the reaction of investors if U.S. economic reporting is handed over to unqualified hacks. Investors will migrate away from U.S. Treasuries leading to higher interest rates.
For access to Trillions archives back to January, including a summary of the Trump spending and tax cut megabill (“OBBBA”), subscribe for only $5.00 per month.
(2) WHILE CONGRESS WAS IN AUGUST RECESS…
On August 29, 2025 OMB Director Russell Vought unlawfully announced a “pocket rescission,” a proposal to rescind $4.9 billion in funding that had been previously appropriated for foreign aid programs. Under the Impoundment Control Act, funds proposed by the President for rescission are withheld for 45 days to give Congress time to consider whether to approve or disapprove a proposed rescission. If Congress does not approve the rescission, the Impoundment Control Act requires the funds to be released.
However, because this proposed rescission was sent to Congress with fewer than 45 days remaining in the fiscal year, the rescission would effectively cancel the funds for the remainder of the fiscal year—an action the Government Accountability Office has previously determined is a violation of the Impoundment Control Act. Senate Appropriations Chair Susan Collins and Ranking Democrat Patty Murray both issued statements objecting to the “pocket rescission” as unlawful.Militarizing DC: On August 11, 2025, President Trump declared a “crime emergency” in Washington DC stating his intention to control the metropolitan police and deploy National Guard troops. He used a carjacking attack on a DOGE staffer as a pretext. In addition to the D.C. National Guard, troops from several Republican-led states were sent to the capital at the request of the Trump Administration, bringing the total number of National Guard members to over 2,200. On September 4, D.C. Attorney General, Brian Schwalb, filed a lawsuit against the Trump administration calling it an illegal "military occupation." On Saturday, 9/7, thousands marched in D.C. to protest Trump’s law enforcement takeover.
U.S. manufacturing activity contracted in August for a sixth month, “driven by a pullback in production that shows manufacturing remains bogged down by higher import duties.”
“More than 1.2 million immigrants disappeared from the labor force from January through the end of July,” according to preliminary Census Bureau data analyzed by the Pew Research Center. – AP
In August, Trump raised tariffs on imports from India to 50% (pushing the most populous nation into a closer alliance with China and Russia).
The IRS finally realized during August that its “meat axe” approach to slashing its workforce would leave it without sufficient staff to collect revenues. According to Government Executive, “after pushing 26,000 employees out, the tax agency is scrambling to find enough personnel to carry out its duties.”
President Trump announced on August 25, 2025, via social media his intention to remove Lisa Cook from the Federal Reserve Board of Governors, based on unproven allegations of improperly designating her primary residence on mortgage applications. Cook has refused to resign and filed suit in federal court arguing the attempted removal lacked “cause” and is a pretext for undermining the independence of the Fed. While litigation proceeds, Cook remains an active governor.
The Trump Administration on August 29, 2025, ended the tariff exemption for parcels worth less than $800.
(3) WHAT’S AHEAD THIS FALL?
Shutdown or Continuing Resolution on October 1st: The current funding resolution for Fiscal Year 2025 expires September 30, 2025, and little time remains to negotiate bipartisan agreements on any of the 12 regular appropriation bills.
Thus far, the House has passed only 3 bills (Defense, Energy-Water, and MilCon-VA) out of the 12 regular appropriations bills; and the Senate has passed only 3 bills (Ag-Rural-FDA, MilCon-VA, and Leg. Branch). The House bills are partisan with no Democratic input, while the Senate bills passed with bipartisan support. The partisan House bills call for much lower spending levels than their bipartisan counterparts in the Senate. For example, the House calls for an 11 percent cut to the Labor-HHS-Education funding bill.
There is no way the 12 regular appropriation bills will be negotiated and completed by September 30, particularly since White House Budget Director Russell Vought is arguing against bipartisan spending negotiations—ignoring the fact that Senate passage of appropriations requires 60 votes (to bring debate to an end and reach a final vote).
Therefore, funding will run out for federal agencies and the federal government will shut down at midnight on Tuesday, September 30, unless Congress passes, and the President signs, a stopgap continuing resolution (CR) to keep the government open.
House Appropriations Chair Tom Cole is calling for a CR into November, while Senate Majority Leader Thune has previously indicated he would like to see a 3-month CR through December, and Democratic Appropriations Ranking Member Patty Murray said any short-term spending agreement, “ needs to be a real bipartisan compromise.”
Read more: GOP lurches toward shutdown as Democrats vow they won’t be rolled.
Possible 2nd Budget Reconciliation Bill: GOP leaders have been talking over the summer about advancing a 2nd filibuster-proof budget reconciliation bill. House Committee Chairs were to report their ideas for a second bill by Friday, 9/5. However, Politico reports, “(While) Speaker Mike Johnson is forging ahead with new reconciliation plans…there’s declining faith it could come together” in the absence of a unifying theme (such as extending expiring tax cuts and raising the debt ceiling which drove the first bill). Read more.
If there is a second reconciliation bill, Republicans may attempt to include a so-called “tariff rebate” in the bill. Republicans claim that tariff revenues can be used to pay "tariff dividends" or to "pay down the national debt."
FACT CHECK: This is utter nonsense. The U.S. is running annual deficits close to $2 trillion per year. New tariff revenues may generate $200 - $300 billion per year (although this is uncertain because the volume of imports will decrease as tariffs go up). Tariff revenues will simply lower annual deficits by 10 to 15%. There is no extra money on the table to distribute to taxpayers or reduce accumulated public debt. Bottom line: sending checks approximating "tariff revenues" to taxpayers would be additional federal spending, financed by federal borrowing, and would increase annual deficits and the accumulated public debt.
Trump’s tariffs could face court reversals: On Friday, Aug. 29, the U.S. Court of Appeals for the Federal Circuit ruled that President Trump exceeded his authority under a 1977 emergency powers law (IEEPA) granting the President authority to regulate international commerce during a declared national emergency. “It seems unlikely that Congress intended…to… grant the President unlimited authority to impose tariffs,” the judges wrote in a 7-4 ruling, noting that the IEEPA does not explicitly grant the power to impose tariffs or taxes.
However, they did not immediately strike down the tariffs, allowing the Administration until mid-October to appeal to the Supreme Court—an appeal which they filed on Wednesday, Sept. 3.
Trump is claiming that trade deficits with nations around the world is an “emergency” justifying the so-called “Liberation Day tariffs,” and that drug trafficking and illegal immigration justify tariffs on goods imported from Canada, China and Mexico.
If the tariffs are eventually thrown out by the Supreme Court, U.S. importing companies would receive refunds—but not consumers who paid higher prices due to the tariffs.
Democrats’ top priority this fall is extending enhanced ACA (Affordable Care Act) health insurance subsidies which expire at the end of 2025. Some Republicans are getting on board. Last week 10 House Republicans introduced legislation that would extend the enhanced subsidies.
Unprepared for multiple disasters this fall: The Government Accountability Office (GAO) warned in a Sept. 2, 2025, report that Trump’s cuts at FEMA leave the nation unable to address multiple disasters happening at once. Thirty FEMA employees who warned about this in a letter last month were suspended by the Trump Administration.
(4) This Week’s Must Reads:
Robert F. Kennedy Jr., the CDC and Me. I was fired after 29 days because I held the line and insisted on rigorous scientific review. – WSJ/Monarez
About the author: Charles S. Konigsberg, J.D., served as Assistant Director at the White House Office of Management and Budget for three successive Budget Directors; General Counsel at the U.S. Senate Finance Committee; Minority Chief Counsel at the U.S. Senate Rules Committee; Staff Attorney at the U.S. Senate Budget Committee; Director of Congressional Affairs at CFPB and AmeriCorps; and Staff Director of a national bipartisan budget task force.
He is author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. Click here to purchase.
He is also Publisher of:
Appropriations.com which tracks the 12 appropriation bills and presidential impoundment developments each day;
andGovBudget.com which tracks major developments, by subject area, each day including: Law & Democracy | Cut Tracker | WH-OMB-DOGE | Economic News | Federal Taxes | Tariffs | Health and Human Services Programs | Debt, Deficits and Debt Limit | Discretionary Spending Programs | Mandatory Spending Programs | Immigration | Disabilities Programs | Defense | Climate/Energy | Budget Process
Speaking engagements and press interviews can be scheduled by calling: (202) 818-8578 or (301) 509-5688. Email comments, suggestions, and questions to: ckonigsberg@capitolpublicpolicy.com.
You are performing an incredible public service, nowhere else have I seen as comprehensive list as the one you have prepared