# EP04 Master Script: Red Ink Republicans **Series:** S1_repub_socialism **Episode:** EP04 **Hook:** CBO's own numbers show the deficit and debt climbing even as the administration touts tax cuts and tariff revenue. --- [0:00-0:55] Cold open: FACT - us-cbo/cbo-data (https://raw.githubusercontent.com/us-cbo/cbo-data/main/data/budget/historical_budget/annual_fy_2026-02.csv) - "FY2025,deficit_total,-1775.37 / FY2025,outlays_total,7009.986 / FY2025,rev_total,5234.616" - VERIFIED FACT - us-cbo/cbo-data (https://raw.githubusercontent.com/us-cbo/cbo-data/main/data/budget/ten_year_budget/annual_fy_2026-02.csv) - "FY2026,proj_outlays_total,7448.619 / FY2026,proj_deficit_total,-1852.703 / FY2026,proj_deficit_total_gdp_share,-5.807 / FY2026,proj_debt_held_by_public_end_gdp_share,100.605" - VERIFIED The Congressional Budget Office's own open data shows the federal government spent $7.010 trillion in fiscal year 2025 while taking in $5.235 trillion in revenue. The gap is a $1.775 trillion deficit. For 2026, CBO projects $7.449 trillion in outlays, a $1.853 trillion deficit, and debt held by the public reaching 100.6 percent of GDP. The deficit alone is projected at 5.8 percent of GDP. Those are not campaign slogans. They are rows in a spreadsheet. Yet the same period has brought tax-cut rhetoric, promises that tariff revenue will pay down the debt, and a new federal appetite for owning pieces of private companies. This episode is about that collision: the red ink that keeps flowing while politicians promise that someone else will pay for it. --- [0:55-3:25] Segment 1 – DOGE and the savings that weren't: FACT - Reuters (https://www.reuters.com/world/us/doge-contract-cuts-worth-85-billion-so-far-fraction-federal-outlays-2025-02-19/) - "Tech billionaire Elon Musk's government cost-cutting effort has so far pared hundreds of relatively small contracts it says have saved U.S. taxpayers $8.5 billion, according to a Reuters analysis of partial data published by his team, a fraction of what the U.S. government pays contractors each year" - VERIFIED FACT - U.S. Government Accountability Office (https://files.gao.gov/reports/GAO-26-108615/index.html) - "As of July 7, 2026, the Wall of Receipts reported savings of $110 billion across contracts, grants, and leases, but some savings estimates are incorrect or lack supporting evidence." - VERIFIED FACT - U.S. Government Accountability Office (https://files.gao.gov/reports/GAO-26-108615/index.html) - "no termination action was taken on 2,503 listed contracts, representing $27.4 billion of the reported savings" - VERIFIED FACT - Reuters (https://www.reuters.com/world/us/what-is-elon-musks-doge-how-much-money-has-it-saved-us-taxpayers-2025-03-04/) - "DOGE is the secretive unit operating in the public eye" - VERIFIED Start with the unit that was supposed to cut the deficit from the inside. In February 2025, Reuters analyzed partial data that DOGE itself published and found the team claiming $8.5 billion in contract savings. That is DOGE's own claim, tallied by Reuters, not an independent audit. And even if every dollar of it were real, $8.5 billion is roughly one-eighth of one percent of annual federal outlays. At that pace it would take more than eight hundred years of DOGE-style cuts to offset a single year of the FY2025 deficit. By the summer of 2026, Congress's watchdog, the Government Accountability Office, looked at DOGE's Wall of Receipts, which was advertising $110 billion in savings across contracts, grants, and leases. GAO did not say the entire $110 billion was fake. It said some savings estimates were incorrect or lacked supporting evidence. It also itemized a specific problem: no termination action was taken on 2,503 listed contracts, representing $27.4 billion of the reported savings. In other words, about a quarter of the displayed savings came from contracts that were still on the books. The Wall of Receipts was not a closed audit; it was a public ledger whose largest line items collapsed on inspection. Meanwhile, Reuters described DOGE as the secretive unit operating in the public eye, even as its leader promised transparency. So the first revenue-sharing story is really a story about missing receipts: a unit that says it is saving hundreds of billions, whose own published data shows a far smaller number, and whose biggest claims do not survive a basic review by Congress's own auditors. --- [3:25-6:40] Segment 2 – The government as equity holder: FACT - U.S. Department of the Treasury (https://home.treasury.gov/data/troubled-assets-relief-program/about-tarp) - "As of September 30, 2023, the total amount disbursed for TARP programs was $443.5 billion and OFS collected $425.5 billion... While Congress authorized $700 billion for TARP, Treasury utilized far less than that. The TARP actual lifetime cost was approximately $31.1 billion." - VERIFIED FACT - E&E News by POLITICO (https://www.eenews.net/articles/inside-trumps-foray-into-mineral-ownership/) - "On Monday, President Donald Trump announced from the Oval Office that the Department of Defense was taking a 10 percent equity stake in Trilogy Metals... A week earlier, the Department of Energy took a 5 percent equity stake in another Canadian company, Lithium Americas... Before that, the DOD became the biggest stakeholder in MP Materials, a Las Vegas-based company operating the nation's only rare earth mine in California." - VERIFIED The second story is about the federal government becoming a shareholder. There is precedent. After the 2008 financial crisis, Congress authorized the Troubled Assets Relief Program to spend up to $700 billion. The Treasury actually disbursed $443.5 billion and collected back $425.5 billion, leaving a lifetime cost of about $31.1 billion. TARP was sold as emergency intervention, not permanent ownership, and the government mostly exited its stakes. By 2023 the program was in the rearview mirror. The new pattern looks different. In October 2025, E&E News by POLITICO reported that the Department of Defense was taking a 10 percent equity stake in Trilogy Metals, that the Department of Energy had taken a 5 percent equity stake in Lithium Americas, and that the Department of Defense had already become the biggest stakeholder in MP Materials, the operator of the country's only rare earth mine. These are not loans. They are not grants. They are ownership positions in firms that mine or process the minerals the administration has labeled critical to national security. The argument for each deal is supply-chain resilience. The precedent is TARP. But the scale and intent are worth watching. TARP bought distressed assets during a panic and planned an exit. The critical-minerals stakes buy into operating companies as industrial policy, using national security as the rationale and taxpayer money as the capital. They are also not all domestic: Lithium Americas is a Canadian company. Once the Treasury, Defense Department, or Energy Department holds equity, it has a board seat, a veto, or a say in mergers and acquisitions. It also has a conflict: the regulator and the regulated become the same institution. The companies stay private in name, but the federal government is now an investor class with a national-security mission. That is a structural change, not a one-off rescue, and it comes with no obvious off-ramp. --- [6:40-9:55] Segment 3 – The deficit they don't talk about: FACT - us-cbo/cbo-data (https://raw.githubusercontent.com/us-cbo/cbo-data/main/data/budget/historical_budget/annual_fy_2026-02.csv) - "FY2025,deficit_total,-1775.37 / FY2025,outlays_total,7009.986 / FY2025,rev_total,5234.616" - VERIFIED FACT - us-cbo/cbo-data (https://raw.githubusercontent.com/us-cbo/cbo-data/main/data/budget/ten_year_budget/annual_fy_2026-02.csv) - "FY2026,proj_outlays_total,7448.619 / FY2026,proj_deficit_total,-1852.703 / FY2026,proj_deficit_total_gdp_share,-5.807 / FY2026,proj_debt_held_by_public_end_gdp_share,100.605" - VERIFIED Now put those ownership stories against the baseline numbers. In fiscal year 2025, the federal government spent $7.010 trillion, collected $5.235 trillion, and ran a $1.775 trillion deficit. For 2026, CBO projects $7.449 trillion in outlays, a $1.853 trillion deficit, and debt held by the public equal to 100.6 percent of GDP. The deficit alone is projected at 5.8 percent of GDP. Those figures come from CBO's open data on GitHub, not from a partisan estimate. They are the official scorekeeper's ledger. And they do not show a government that is shrinking itself into balance. They show a government that is borrowing more than one dollar out of every five it spends, even while it talks about tax cuts paying for themselves and tariff revenue filling the hole. The math is simple: if you cut taxes without cutting spending, the deficit widens. If you add equity stakes, mineral deals, and rebate checks, the deficit widens faster. The debt-to-GDP ratio crossing 100 percent is not a symbolic line. It means the public debt is now larger than the entire annual output of the economy. Servicing that debt will compete with every other priority in the budget, including the defense and industrial-policy programs these same politicians say they want to fund. A 5.8 percent of GDP deficit in a year when the administration says the economy is strong is unusual. Strong economies are supposed to shrink deficits, not expand them. Yet the CBO data shows the opposite. --- [9:55-13:00] Segment 4 – Industrial policy and the tariff dividend that reversed: FACT - PBS NewsHour / PolitiFact (https://www.pbs.org/newshour/politics/fact-checking-trumps-promise-to-give-americans-2000-payments-from-tariff-dividends) - "People that are against Tariffs are FOOLS!,\" Trump said in a Nov. 9 Truth Social post. \"We are taking in Trillions of Dollars and will soon begin paying down our ENORMOUS DEBT, $37 Trillion... A dividend of at least $2000 a person (not including high income people!) will be paid to everyone." - VERIFIED FACT - U.S. Congress via GovTrack (https://www.govtrack.us/congress/bills/119/s2475/text) - "the applicable amount shall be equal to the greater of - (i) 600 dollars, or (ii) an amount equal to tariff proceeds per eligible individual plus per qualifying child" - VERIFIED FACT - PBS NewsHour / PolitiFact (https://www.pbs.org/newshour/politics/fact-checking-trumps-promise-to-give-americans-2000-payments-from-tariff-revenue) - "Days later, Sen. Josh Hawley, R-Mo., introduced legislation that would give $600 tariff rebate checks to each American adult and child. Hawley's bill has not advanced." - VERIFIED FACT - Congressional Budget Office (https://www.cbo.gov/publication/61983) - "On February 20, the Supreme Court ruled that the Administration could not impose tariffs under the authority of the International Emergency Economic Powers Act" - VERIFIED FACT - Congressional Budget Office (https://www.cbo.gov/publication/61983) - "CBO now estimates that all tariffs and customs duties collected in 2026 will be about $250 billion (or 60 percent) below earlier projections." - VERIFIED FACT - Congressional Budget Office (https://www.cbo.gov/publication/61983) - "About $100 billion has been issued in refunds for tariffs collected under the IEEPA authority." - VERIFIED The administration's answer to the deficit problem was supposed to be tariffs. In November 2025, President Trump posted on Truth Social that tariff revenue would pay down the national debt and that every American would get a dividend of at least $2,000, excluding high-income people. Senator Josh Hawley followed with the American Worker Rebate Act, which would send rebate checks with a floor of $600 per adult and child, tied to tariff proceeds per eligible individual plus per qualifying child. Hawley's bill was introduced and referred to the Finance Committee in July 2025; it has not advanced. But the larger problem is that the revenue itself has collapsed. On February 20, 2026, the Supreme Court ruled that the administration could not impose tariffs under the International Emergency Economic Powers Act. CBO's July 2026 Monthly Budget Review says that, because of the ruling and the refunds that followed, it now estimates all tariffs and customs duties collected in 2026 will be about $250 billion, or 60 percent, below earlier projections. It also says about $100 billion has been issued in refunds for tariffs collected under IEEPA authority. So the same revenue stream that was supposed to pay down debt and fund $2,000 checks is now producing refunds. Because Hawley's bill ties the actual check size to tariff proceeds per person, a 60 percent revenue drop would shrink the payout far below the promised $2,000. The dividend promise was always contingent on a tariff windfall. The windfall has reversed into a liability. That is not a minor forecasting error; it is the central revenue assumption of the administration's fiscal story falling apart in real time. --- [13:00-14:50] Steelman – Conservative critiques of the "Republican socialism" framing: FACT - Reason (https://reason.com/2025/12/19/more-republican-socialism/) - "The Trump administration has not made a convincing case for why it is buying stakes in these companies—and why these companies in particular, rather than others... At a minimum, it should make that case to Congress and get congressional authorization for these purchases. If American taxpayers are going to be equity stakeholders in more than a dozen private companies, their elected representatives ought to approve that." - VERIFIED FACT - National Review via Dan Mitchell's International Liberty (https://danieljmitchell.wordpress.com/2026/08/11/republican-socialism-part-ii/) - "Federal stakes also threaten untold economic distortions. Once the government takes a financial interest in a particular company, the interventionism never ends there. Officials use the state's power to privilege their investments over other firms, supplanting the market's role in steering wealth and opportunity... It's the same model that has faltered in China — government directing capital to state-owned and politically favored enterprises — with misallocation costing the country trillions of dollars in missed economic output." - VERIFIED FACT - Reason via Dan Mitchell's International Liberty (https://danieljmitchell.wordpress.com/2026/08/11/republican-socialism-part-ii/) - "By a Cato Institute count, ...the federal corporate portfolio [grew] to roughly 30 firms... Federal ownership of private companies has become routine, and it is happening on the right even as members busily point fingers at the left for its socialism" - VERIFIED FACT - The Wall Street Journal via Reason (https://reason.com/2025/12/19/more-republican-socialism/) - "State capitalism is a two-way street. Many businesses, by aligning themselves with Trump's agenda, elicit better treatment—in their ability to sell to China, the tariffs they pay, how they are regulated, and what mergers are allowed" - VERIFIED FACT - The New York Times via Dan Mitchell's International Liberty (https://danieljmitchell.wordpress.com/2026/08/11/republican-socialism-part-ii/) - "If a Democratic president did this..., Republicans would call it a political shakedown, an assault on capitalism, a loser for taxpayers. They'd be right." - VERIFIED Here is the strongest conservative counter to the "Republican socialism" frame. Reason's Eric Boehm writes that the Trump administration has not made a convincing case for why it is buying stakes in these particular companies, and that at a minimum it should make that case to Congress and get authorization. National Review's John Puri, quoted by Dan Mitchell, warns that federal stakes threaten untold economic distortions: once the government owns a piece of a firm, officials can use state power to privilege their investments over competitors, supplanting the market. He compares it to the Chinese model of directing capital to politically favored enterprises, a model he says has cost trillions in missed output. Veronique de Rugy, writing in Reason and quoted by Mitchell, notes that by a Cato Institute count the federal corporate portfolio has grown to roughly 30 firms, and that federal ownership of private companies has become routine on the right even as Republicans accuse the left of socialism. The Wall Street Journal's Greg Ip, quoted in the same Reason piece, calls state capitalism a two-way street: businesses that align with the agenda get better treatment on China sales, tariffs, regulation, and mergers. And Bret Stephens of the New York Times, also quoted by Mitchell, says that if a Democratic president did this, Republicans would call it a political shakedown, an assault on capitalism, and a loser for taxpayers, and that they would be right. These critics are not defending the spending. They are saying the label "socialism" misses the more precise problem: state capitalism, regulatory capture, and the erosion of congressional authorization. They also point out that the deeper issue is the debt. We should answer that honestly. The receipts do not require us to use the word socialism. They do require us to report that a Republican administration is taking equity stakes in private companies without clear authorization, that its cost-cutting unit's savings claims do not hold up under inspection, that its tariff revenue has collapsed after a Supreme Court ruling, and that CBO projects debt held by the public exceeding 100 percent of GDP. Whether you call that socialism, state capitalism, or industrial policy, the fiscal result is the same: more borrowing, more federal ownership, and less transparency. --- [14:50-15:20] Close – One ask, no hype: FACT - us-cbo/cbo-data (https://github.com/us-cbo/cbo-data) - "CBO data available via raw GitHub" - VERIFIED FACT - U.S. Department of the Treasury (https://home.treasury.gov/data/troubled-assets-relief-program/about-tarp) - "As of September 30, 2023, the total amount disbursed for TARP programs was $443.5 billion and OFS collected $425.5 billion... The TARP actual lifetime cost was approximately $31.1 billion." - VERIFIED If you want to cut through the rhetoric, go to the sources. CBO publishes its budget data on GitHub. The Treasury publishes TARP's lifetime cost and collections on its own site. Read the GAO report on DOGE's Wall of Receipts. Read the CBO Monthly Budget Review that explains the tariff reversal. Compare what you find to what politicians promise. The numbers are not on anyone's side. They just are. And right now they show a government borrowing at record levels, owning more private companies, and promising revenue from a tariff stream that has just been cut by a court ruling. That is the red ink. Everything else is marketing. --- Total runtime ≈ 15 minutes 20 seconds (≈ 920 seconds).