What's In The Big Beautiful Bill And Why Elon Musk Hates It

President Trump and Senate Majority Leader John Thune are pushing to get the Republicans' reconciliation bill passed by July 4th, but several senators are saying there needs to be more spending cuts. The best way I think to think about the Trump meta-bill is that it's sort of two pieces combined. One piece are priorities that Republicans have. These are things like securing the border, boosting defense, boosting energy production. It's stuff that Republicans ran, campaigned, and won on in 2024, and things they hope will help them continue to keep their power in D.C. in the next midterm and next presidential election. The other piece of this bill has to do with tax. Back in 2017, Congress passed this absolutely massive tax package, but because of the way they passed it, most of that package will expire by the end of this year. And if that happens, millions of Americans are actually going to see an increase in the amount of taxes that they have to pay. Republicans definitely do not want that, and so the other part of this package is extending a lot of that work that was done in 2017, as well as, again, a number of things that Trump campaigned on. Certain lawmakers have complaints about various provisions in the bill. However, it's difficult to vote against the entire thing if there are, you know, 100 provisions in it, and you really only hate one of them. Voting against the bill means you voted against the other 99 ones that you like. And so this is why, especially today in Congress, you see a lot of legislation move that are these absolutely massive packages, because it really puts pressure on individual lawmakers to get over some of their individual concerns with the bill and ultimately support it. If you look at the tax portion of the bill, you can also break that down into about three different parts. The first part is just everything that's extending that 2017 tax package that passed that is now set to expire at the end of the year. So this includes things like a larger standard deduction. It includes things like changing personal income tax brackets so that most people did wind up having to pay less taxes. It includes things like extending the child tax credit and actually adds a sort of plus up to it for the first couple of years. It includes bringing back some of these tax credits and deductions for businesses to help them out with interest deductions and R&D expenses. There's a lot of different things that are packed into the tax bill that are mostly, they're just trying to continue what was in 2017 and make sure that it doesn't expire. I will pass historic tax cuts for our workers and small businesses. The second piece of this tax bill are the things that Trump campaigned on that he now wants to include things like new tax on tips. No tax on tips. It also includes some benefits for those folks who are paying off an auto loan. If the auto is made in the United States, you can take a deduction on that. These are all different things that are included in the bill to kind of fulfill that Trump campaign promise. The third bucket is a bit of the newer things, maybe things that Trump didn't really talk about, and maybe they were in the 2017 tax bill, but now they're getting a bit of a change. This includes that higher deduction for state and local taxes, $40,000 rather than $10,000. This includes endowment taxes being raised on certain universities if they have large endowments compared to what their student population is. It includes taxes on private foundations. It includes a retaliatory tax for international corporations and investors whose home countries have put what a lot of lawmakers see as President Trump and Elon Musk falling into an intense feud over the president's major tax and spending bill. What was surprising about it was just the idea that it came so quickly, right? I mean, Elon Musk was in the Oval Office with the president a week before this blow up, and they were both heaping praise on one another. He happens to be a really good person. I'm very disappointed because Elon knew the inner workings of this bill better than almost anybody sitting here, better than you people. He knew everything about it. He had no problem with it. All of a sudden, he had a problem, and he only developed the problem when he found out that we're going to have to cut the EV mandate. There are a couple of different thoughts as to why exactly Elon Musk came out to oppose the bill the way he did. One of the things that this bill does is it cuts a tax credit that was encouraging Americans to buy electric vehicles like the ones that Tesla produces. And Musk has come out and publicly stated that he was upset that these incentives were not kept in the bill and that Republicans tried to cut them. Obviously, Tesla is impacted by the EV tax credits getting rolled back in this bill. Tesla stock had dropped double digits yesterday, really erasing a month of gains. A couple of folks that I've spoken with on the Hill feel that one of the main concerns of Elon Musk is that he really came in because he was concerned about the level of debt that we currently hold, this more than $36 trillion. And there are a lot of folks, I think both on Wall Street and in D.C., who recognize that that's a valid concern. We are again heading towards the point where the U.S. is no longer going to be able to pay its debtors. And so what this bill would do is it would raise the debt ceiling. We don't know exactly the final number at this point, but they're looking in the range of $4 trillion to $5 trillion, which would give lawmakers a couple of years of leeway before they'd have to worry about raising the debt limit again. Again, this is that interplay between if you want to reduce the debt, you are going to have to find additional sources of revenue and giving tax breaks to companies to reduce revenue. So it's even within Musk, you can kind of see this interesting push and pull. He wants these tax credits to benefit himself and his companies and electric vehicles. However, if he actually wants to reduce the debt, what he would want to do is eliminate those tax credits because that is going to allow more money to come into the U.S. and for the debt to get smaller. Elon Musk's arc in American society, he is as influential an industrialist as we have maybe ever seen in this country, overseeing cutting edge technology companies in all these different fields, the richest man in the world. And you look at, you know, so what's the predicate for that role in American society? This is a man who is incredibly wealthy, who spent millions helping Republicans get elected and boosting them across the country, not just Trump, but many at the congressional level in the 2024 elections. And while he said that he wants to step away from politics, he also recently tweeted that he would be working to oust Republicans who supported the Trump mega bill. And if you're a Republican and you are worried that you might get a primary challenger funded by Musk and with the Musk dollars and the Musk support and the support of a That's something to be concerned about. And I think it's something right now that you're seeing Speaker Mike Johnson really try and get in touch with Elon Musk, you know, make sure that he's walking a fine line. He's not criticizing him. He's digging the door open for conversations. But this is something I think that congressional leadership recognizes is a big threat, not just to passing this Trump mega bill, but then to their elections in November of 2026. The latest developments in these bills are fundamentally inflationary. We have a series of senators who have come on this program to talk about their concerns with the bill, including Ron Johnson and Rand Paul, who both have said they will not support the bill in its current status because they think it adds trillions of dollars to the deficit. What I'm urging my Senate colleagues is, OK, let's take what the House said is a starting point, but let's be more aggressive. Let's rein in spending. Let's be more aggressive on tax cuts. Let's pass a really good bill. We're not there yet, but I've got some real hope and optimism that that's what we're going to do. There's no way to please everyone within the Republican Party. There's no way to give your moderates everything they want and the fiscal hawks everything they want and your blue state Republicans everything they want either. Everyone's going to have to take some sort of loss here. And I think everyone's goal is that if they can walk away with something, they can at least pitch their constituencies as a win. They're going to take that win. The markets know that if you're not bringing in enough revenue to cover your expenses, that's going to be a real problem. And the bond market is starting to show that. So I'm very concerned about where the Republicans are driving this. They can't get where they want to be because they need magic math to be able to fix it. And you may be able to sell magic math on the floor of the United States Senate to the Republicans, but you can't sell magic math to the American people and particularly to Wall Street and bond markets. It just isn't going to work. You look at Trump's big, beautiful tax bill, you're going to take on that much debt, and you combine that with consumer price increases and tariffs, it really needs to hurt for the Fed to cut rates. And a combination of the instability and higher rates is not great for that deal. If you're a business or a company in the United States, you need to be able to plan several years down the line. And if you're not sure whether or not these taxes are going to be around or how long they're going to be around for or what they're going to look like, that kind of stability can lead to companies stopping certain investments, reeling back on what they're spending, reeling back on their research and development, maybe not even looking to necessarily come to the U.S. but invest in other places. I think to a certain extent, what lawmakers are really endeavoring to do here, at least with the tax portion of the bill, is to provide more of that stability, certainty, and clarity.