Understanding the Big Beautiful Bill and the Laws That Surround It

The Big Beautiful Bill continues to be confusing, and, frankly, I think it’s become confusing because a whole lot of people think it being confusing is to their advantage. So let’s try to drill down into the details and try to sort out the facts.

Now, Stephen Miller has tweeted an explanation a couple of times, apparently to little avail, but let’s look at it again, and work out the details.

I’ve seen a few claims making the rounds on the Big Beautiful Bill that require correction.

The first is that it doesn’t “codify the DOGE cuts.” A reconciliation bill, which is a budget bill that passes with 50 votes, is limited by senate rules to “mandatory” spending only — eg…
— Stephen Miller (@StephenM) May 25, 2025

Here’s the full text, to which I’ll be referring quite a bit.

I’ve seen a few claims making the rounds on the Big Beautiful Bill that require correction.

The first is that it doesn’t “codify the DOGE cuts.” A reconciliation bill, which is a budget bill that passes with 50 votes, is limited by senate rules to “mandatory” spending only — eg Medicaid and Food Stamps. The senate rules prevent it from cutting “discretionary” spending — eg the Department of Education or federal grants. The DOGE cuts are overwhelmingly discretionary, not mandatory. The bill saves more than 1.6 TRILLION in mandatory spending, including the largest-ever welfare reform. A remarkable achievement.

I’ve also seen claims the bill increases the deficit. This lie is based on a CBO accounting gimmick. Income tax rates from the 2017 tax cut are set to expire in September. They were always planned to be permanent. CBO says maintaining current rates adds to the deficit, but by definition leaving these income tax rates unchanged cannot add one penny to the deficit. The bill’s spending cuts REDUCE the deficit against the current law baseline, which is the only correct baseline to use.

Another fantastically false claim is that the bill spends trillions of dollars. This is just completely invented out of whole cloth. This is not a ten year budget bill—it doesn’t “fund” almost any operations of government, which are funded in the annual budget bills (which this is not). In other words, if this bill passed, but the annual budget bill did not, there would be no government funding. Under the math that critics are using, if we passed a one paragraph reconciliation bill that cut simply 50 billion in food stamp spending, they would say the bill “added” trillions in spending and debt because they are counting ALL the projected federal spending that exists entirely outside the scope of this legislation, which is of course preposterous. The only funding in the bill is for the President’s border and defense priorities, while enacting a net spending cut of over 1.6 TRILLION dollars.

The bill has two fiscal components: a massive tax cut and a massive spending cut.

There are some facts of life that he tries to explain but doesn’t go into detail about, because, well, it’s just a tweet.

So here are the facts of life:

The Big Beautiful Bill is a reconciliation bill
Reconciliation bills have the advantage that they can’t be filibustered — a simple majority does the job
...but that doesn’t mean filibusters aren’t an issue in the whole process
One of the biggest restrictions on reconciliation is that the reconciliation bill cannot, by law, affect anything except mandatory spending, and what constitutes mandatory spending is also established by law.
Reconciliation bills are not spending bills. They establish a budget, or propose a budget, but the actual spending must be established in a bill that starts in the House. A separate bill.
Reconciliation bills are scored by the Congressional Budget Office, which imposes other restrictions
Both the limits on a reconciliation bill and on CBO’s scoring are established by law, so if you want to change them, you run into that filibuster monster again.

So, a lot of the people screaming about the BBB not codifying the DOGE cuts are either ignorant or gaslighting you. The BBB doesn’t codify the DOGE cuts because by law it can’t. Keep that in mind as we go through the details.

I think the first thing is probably to look at the CBO scoring, because a lot of the more blatant gaslighting on all sides comes from people conveniently not understanding what the CBO is required by law to do. You can expect that phrase to show up a lot, and, by God, it’s going to be in boldface every time, because it seems to be the hardest thing to understand — or the easiest thing to ignore.

So, let’s dive in. I’m going to be quoting my research assistant Grok fairly heavily, because this is buried in probably a hundred different laws, rules, and accounting terms of art that don’t mean quite what you think they mean.

CBO Scoring:

The Congressional Budget Office — which is going to be “the CBO” from here on out — was established by law. (That link is to Grok’s summary, and feel free to argue that there’s something wrong with the summary. But be prepared to provide citations.)

[The] Congressional Budget Office (CBO) was established by the Congressional Budget and Impoundment Control Act of 1974 (Public Law 93-344). The Act created the CBO to provide Congress with objective, nonpartisan analysis of budgetary and economic issues, including cost estimates and deficit projections for legislation like the Big Beautiful Bill (#BBB).

There are a lot of little details to that, and we’ll look at them, I promise. But one of them is this: By law — the same law —the CBO must make their baseline budget projections based on the law as it stands; it may not change the baseline to suit coming changes to the law — like the ones in the BBB.

So Miller’s first point is generally correct — the BBB doesn’t codify most of the DOGE cuts, because by law it cannot. The DOGE cuts are almost exclusively to discretionary spending, and the distinction between mandatory and discretionary spending is established, you guessed it, by law. That same law, in fact.

What’s the difference, you ask? Simply, mandatory spending is spending that is required by law under separate legislation — think Social Security, Medicare, and Medicaid. Discretionary spending is, well, everything else: everything that is funded by the annual budgetary process. Now, at this point, Miller slips a little bit in his discussion because he says, “The senate rules prevent it from cutting ‘discretionary’ spending.” It’s a tiny quibble, perhaps, but this is a discussion that is characterized on all sides by tiny quibbles made to emphasize someone’s own goals and interests.

The tiny quibble is this: You can’t do it in the BBB, because that’s not germane to the purpose of the bill. That runs into a Senate rule called the “Byrd Rule,” named for the former lion — or rather Exalted Cyclops — of the Senate, the late Robert C. Byrd (D-W.V.). That link will lead to a full summary of the Byrd Rule, but the important point right now is that to do anything that the Byrd Rule would forbid, you have to get 60 votes in the Senate. But what is mandatory is fixed by law. The Byrd Rule is how that law is enforced in the Senate.

Now, let’s just answer the inevitable comments: “Well, duh, just change the law.” You’re right, that is possibly desirable — but you can’t change the law without getting past a filibuster. You can’t do it in the BBB, because that’s not germane to the purpose of the bill.

(I say “possibly desirable” because it’s another place where some actual thought ought to be given to whether it really is desirable. But this is already going to be too long, so I’ll just refer you for the moment to the Lesson of Robespierre.)

Effect on the Deficit

So on to Miller’s next point.

Calling this a lie is an overstatement. Remember that by law (there it is again), the CBO is forced to work from current law, and the current law says the 2017 tax cuts expire on December 31, 2025. So, extending the tax cuts reduces the projected tax revenue as of that date. Miller says this is an “accounting gimmick,” but it’s an accounting gimmick that’s required by law.

So, on to the next point: The BBB increases the 10-year deficit, by CBO scoring, by $3.8 trillion.

This is another one of those gaslighting exercises — because the BBB doesn’t change the deficit at all, because the BBB doesn’t spend money.

Appropriation bills spend money. The most the BBB can do is fiddle around with mandatory spending, which it does, and realizes about $1.6 trillion in real spending reductions by limiting who gets the money from mandatory spending. (This is kind of to a first approximation, because this bill does increase some spending by a fraction, through fiddling with mandatory spending.)

And there’s the next point of confusion: The BBB does not increase the deficit. Why? Because the deficit comes from what is actually being spent, and all the CBO scoring of the BBB says is that everything else being unchanged, the deficit will increase by $3.8 trillion — over ten years, or about $380 billion per year. (It’s not really a straight line, but close enough for, as they say, government work.)

At this point, it’s worth remembering that, again by law, the effect of the DOGE cuts isn’t taken into account in the CBO estimates. So far, the DOGE cuts already realized amount to about $175 billion — which sounds kind of trivial compared to $3.8 trillion, but remember those are permanent savings. On a ten-year basis, that’s $1.75 trillion; or, going year by year, it decreases the actual deficit even without any other changes by about 46 percent.

It’s only been 136 days since Trump was inaugurated. That 46 percent ain’t bad.

Miller's Conclusion:

The bill has two fiscal components: a massive tax cut and a massive spending cut.

And that’s the bottom line, and it’s correct. The BBB does reduce taxes versus the CBO’s expectation and current law, or, more honestly, it prevents taxes — your taxes. The “tax cuts on billionaires” line is errant nonsense. Actual spending in the actual next year is actually cut.

The problem here — an ongoing problem — is that a lot of the gaslighting is coming from both sides, and it’s all built around ignorance or duplicity. Yes, Rand, I’m looking at you. Chip Roy, you too. And include all the Senate Democrats in this as well. I’ll cut Elon a little slack, because he’s made himself the richest man in the world by ignoring people who tell him something can’t be done. But sometimes, they’re telling you something can’t be done because it just can’t be done.

But what the Big Beautiful Bill does do is cut spending this year by $1.6 trillion.

Now, there’s a final point here. To do any of this stuff, the Big Beautiful Bill must pass! Maybe it does increase the SALT deduction for now. But that gains some important votes — and remember, the final House vote was 215-214.

Without those votes, it fails. Take your medicine — it may be bitter, but it’s good for you.