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House Committee advanced President Trump's massive tax cut bill over the weekend. As it stands, the current bill would boost projected budget deficits by nearly $3 trillion through 2034, according to the Wall Street Journal. This comes as Moody slashed its rating on US credit citing the federal government's growing budget deficit. Jessica Riddle is a senior fellow at the Manhattan Institute, a conservative think tank and she recently wrote an op-ed titled, I'm a conservative economist. Here are six reasons Trump's plans won't work. She joins us now. Jessica, it's great to have you on here and and I really wanted to get your specific perspective on the administration because of that exact headline you calling out. I'm a conservative economist and I don't think this is going to work. But I want to start on today's news with the debt ceiling, an issue that you've been flagging for decades. It hasn't become this zombie issue yet. Is this time different?

Ultimately, I think Congress is going to raise the debt ceiling at the end of the year, um, because Republicans don't even seem to care anymore. But this tax bill's enormity is being underplayed. Um, if you take out the expiration dates, which even Republicans say are are not real, this tax bill will cost more than the 2017 tax cuts, the pandemic Cares Act, Biden stimulus, and the inflation reduction Act combined. It would add $6 trillion over 10 years to the deficit. Ultimately, my projections show deficits heading to about $4 trillion a decade from now, uh, if this bill is passed combined with the baseline, and even higher if interest rates rise, and we've seen that interest rates are rising.

Well, Jessica, talk to me about the the kind of growth side. We've been talking a lot this morning about the risks when it comes to the deficit, but I'm curious, is there a potential pro-growth narrative to come from the tax bill that maybe markets are mispricing that we're missing?

I'm not sure what in this tax bill would create faster economic growth, and as a matter of fact, the tax Foundation, uh, did an economic analysis and found that it really does not significantly increase economic growth because the pro-growth parts of the tax cut, such as business expensing, making it easier for government to write off investments are temporary and expire in a couple years, but the other things like no taxes on tips, no taxes on overtime, that's not really pro-growth, um, economics. And a lot of the rest of it is just continuing current tax policy, renewing the tax cuts. But again, the pro-growth stuff is going to be expiring in a couple years. Um, it probably won't expire, as I mentioned earlier, but it does create uncertainty for business investment, while the stuff that doesn't help is goes long term. And ultimately, the economic growth angle is really endangered by tariffs, by the size of the workforce dropping, by Trump telling the Federal Reserve not to raise interest rates. Um, it's it's it's going to be a challenge.

And Jessica, my guest host, Amy Wu Silverman, has a question for you as well.

Hi, Jessica. So I actually want to ask you to go back to kind of this idea of there being exemptions on overtime and on tips. I feel like that's something, uh, Trump had talked a lot about on the campaign trail. And right now from a macro data perspective, we've seen really bad consumer sentiment, kind of like down in down in the dumps and, you know, if something like that passes, do you think it gives a turbo boost to sentiment that could in a way, you know, offset all the bad news we're getting from tariffs and maybe that does down the line hit hard data, or do you really think that it's still not going to have any impact on the growth level?

I think if you look at the design of no tax on tips and no tax on overtime, they're they're more limited. And ultimately, not enough workers work in tipped industries right now, I don't think for it to be a game changer. Same with overtime, it's pretty limited. Of course, that may change if people redesign their jobs to be paid in tips, but ultimately, I don't see it being as big of a game changer compared to the wet blanket on the economy tariffs are providing. I think if we want to get rid of the economic effect of tariffs, we should get rid of the tariffs.

Well, let's talk about the tariffs, Jessica, before we let you go. Uh, and I I want to bring back your headline from this political piece. I'm a conservative economist, but you're not seeing these plans working. When I've spoken with other conservative economists, they've talked to me about boosting American jobs, increasing and bringing us back to a manufacturing economy. What issue do you see with that?

Right. Tariffs can't both bring home manufacturing like Howard Lutnick said, we're going to have American fingers putting, uh, the screws in the iPhones, but then also just be a negotiating tool when Trump turns the dials back. Um, businesses need investment. Businesses need certainty. And if the tariff dials are going up and down, if Trump is going to pull back the tariffs as soon as they're tanking the market and say it was just the art of the deal, then ultimately you're not bringing back manufacturing, you're just creating chaos because you're not giving businesses the certainty and predictability to reshore manufacturing.

Jessica, really great overview. Thank you so much for making the time for us this morning. Appreciate it.

Thank you.