Latest news with #BalancedBudgetAct
Fast Company
09-06-2025
- Business
- Fast Company
Republicans shrug off alarms over nation's ballooning debt, forward Trump's tax agenda
U.S. President Donald Trump and his Republican allies in Congress are determined to enact his tax-cut agenda in a political push that has largely abandoned longtime party claims of fiscal discipline, by simply denying warnings that the measure will balloon the federal debt. The drive has drawn the ire of Elon Musk, a once-close Trump ally and the biggest donor to Republicans in the 2024 election, who gave a boost to a handful of party deficit hawks opposed to the bill by publicly denigrating it as a 'disgusting abomination,' opening a public feud with Trump. But top congressional Republicans remain determined to squeeze Trump's campaign promises through their narrow majorities in the Senate and House of Representatives by July 4, while shrugging off warnings from the official Congressional Budget Office and a host of outside economists and budget experts. 'All the talk about how this bill is going to generate an increase in our deficit is absolutely wrong,' Senate Finance Committee Chairman Mike Crapo told reporters after a meeting with Trump last week. Outside Washington, financial markets have raised red flags about the nation's rising debt, most notably when Moody's cut its pristine 'Aaa' U.S. credit rating. The bill also aims to raise the government's self-imposed debt ceiling by up to $5 trillion, a step Congress must take by summer or risk a devastating default on $36.2 trillion in debt. 'Debt and deficits don't seem to matter for the current Republican leadership, including the president of the United States,' said Bill Hoagland, a former Senate Republican aide who worked on fiscal bills including the 1997 Balanced Budget Act. The few remaining Senate Republican fiscal hawks could be enough to block the bill's passage in a chamber the party controls 53–47. But some have appeared to be warming to the legislation, saying the spending cuts they seek may need to wait for future bills. 'We need a couple bites of the apple here,' said Republican Senator Ron Johnson of Wisconsin, a prominent fiscal hardliner. Republicans who pledged fiscal responsibility in the 1990s secured a few years of budget surpluses under Democratic former President Bill Clinton. Deficits returned after Republican President George W. Bush's tax cuts and the debt has pushed higher since under Democratic and Republican administrations. 'Thirty years have shown that it's a lot easier to talk about these things when you're out of power than to actually do something about them when you're in,' said Jonathan Burks, who was a top aide to former House Speaker Paul Ryan when Trump's Tax Cuts and Jobs Act was enacted into law in 2017. 'Both parties have really pushed us in the wrong direction on the debt problem,' he said. Burks and Hoagland are now on the staff of the Bipartisan Policy Center think tank. DEBT SET TO DOUBLE Crapo's denial of the cost of the Trump bill came hours after CBO reported that the legislation the House passed by a single vote last month would add $2.4 trillion to the debt over the next 10 years. Interest costs would bring the full price tag to $3 trillion, it said. The cost will rise even higher—reaching $5 trillion over a decade—if Senate Republicans can persuade Trump to make the bill's temporary business tax breaks permanent, according to the nonpartisan Committee for a Responsible Federal Budget. The CRFB projects that if Senate Republicans get their way, Trump's One Big Beautiful Bill Act could drive the federal debt to $46.9 trillion in 2029, the end of Trump's term. That is more than double the $20.2 trillion debt level of Trump's first year at the White House in 2017. Majorities of Americans of both parties—72% of Republicans and 86% of Democrats—said they were concerned about the growing government debt in a Reuters/Ipsos poll last month. Analysts say voters worry less about debt than about retaining benefits such as Medicaid healthcare coverage for working Americans, who helped elect Trump and the Republican majorities in Congress. 'Their concern is inflation,' Hoagland said. 'Their concern is affordability of healthcare.' The two problems are linked: As investors worry about the nation's growing debt burden, they demand higher returns on government bonds, which likely means households will pay more for their home mortgages, auto loans and credit card balances. Republican denial of the deficit forecasts rests largely on two arguments about the 2017 Tax Cuts and Jobs Act that independent analysts say are misleading. One insists that CBO projections are not to be trusted because researchers predicted in 2018 that the TCJA would lose $1.8 trillion in revenue by 2024, while actual revenue for that year came in $1.5 trillion higher. 'CBO scores, when we're dealing with taxes, have lost credibility,' Republican Senator Markwayne Mullin told reporters last week. But independent analysts say the unexpected revenue gains resulted from a post-COVID inflation surge that pushed households into higher tax brackets and other factors unrelated to the tax legislation. Top Republicans also claim that extending the 2017 tax cuts and adding new breaks included in the House bill will stimulate economic growth, raising tax revenues and paying for the bill. Despite similar arguments in 2017, CBO estimates the Tax Cuts and Jobs Act increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects. Economists say the impact of the current bill will be more muted, because most of the tax provisions extend current tax rates rather lowering rates. 'We find the package as it currently exists does boost the economy, but relatively modestly . . . it does not pay for itself,' said William McBride, chief economist at the nonpartisan Tax Foundation. The legislation has also raised concerns among budget experts about a potential debt spiral. Maurice Obstfeld, senior fellow at the Peterson Institute for International Economics, said the danger of fiscal crisis has been heightened by a potential rise in global interest rates. 'This greatly increases the cost of having a high debt and of running high deficits and would accelerate the point at which we really got into trouble,' said Obstfeld, a former chief economist for the International Monetary Fund.
Yahoo
09-06-2025
- Business
- Yahoo
Defying debt warnings, Republicans push forward on Trump tax agenda
By David Morgan WASHINGTON (Reuters) -U.S. President Donald Trump and his Republican allies in Congress are determined to enact his tax-cut agenda in a political push that has largely abandoned longtime party claims of fiscal discipline, by simply denying warnings that the measure will balloon the federal debt. The drive has drawn the ire of Elon Musk, a once-close Trump ally and the biggest donor to Republicans in the 2024 election, who gave a boost to a handful of party deficit hawks opposed to the bill by publicly denigrating it as a "disgusting abomination," opening a public feud with Trump. But top congressional Republicans remain determined to squeeze Trump's campaign promises through their narrow majorities in the Senate and House of Representatives by July 4, while shrugging off warnings from the official Congressional Budget Office and a host of outside economists and budget experts. "All the talk about how this bill is going to generate an increase in our deficit is absolutely wrong," Senate Finance Committee Chairman Mike Crapo told reporters after a meeting with Trump last week. Outside Washington, financial markets have raised red flags about the nation's rising debt, most notably when Moody's cut its pristine "Aaa" U.S. credit rating. The bill also aims to raise the government's self-imposed debt ceiling by up to $5 trillion, a step Congress must take by summer or risk a devastating default on $36.2 trillion in debt. "Debt and deficits don't seem to matter for the current Republican leadership, including the president of the United States," said Bill Hoagland, a former Senate Republican aide who worked on fiscal bills including the 1997 Balanced Budget Act. The few remaining Senate Republican fiscal hawks could be enough to block the bill's passage in a chamber the party controls 53-47. But some have appeared to be warming to the legislation, saying the spending cuts they seek may need to wait for future bills. "We need a couple bites of the apple here," said Republican Senator Ron Johnson of Wisconsin, a prominent fiscal hardliner. Republicans who pledged fiscal responsibility in the 1990s secured a few years of budget surpluses under Democratic former President Bill Clinton. Deficits returned after Republican President George W. Bush's tax cuts and the debt has pushed higher since under Democratic and Republican administrations. "Thirty years have shown that it's a lot easier to talk about these things when you're out of power than to actually do something about them when you're in," said Jonathan Burks, who was a top aide to former House Speaker Paul Ryan when Trump's Tax Cuts and Jobs Act was enacted into law in 2017. "Both parties have really pushed us in the wrong direction on the debt problem," he said. Burks and Hoagland are now on the staff of the Bipartisan Policy Center think tank. DEBT SET TO DOUBLE Crapo's denial of the cost of the Trump bill came hours after CBO reported that the legislation the House passed by a single vote last month would add $2.4 trillion to the debt over the next 10 years. Interest costs would bring the full price tag to $3 trillion, it said. The cost will rise even higher - reaching $5 trillion over a decade - if Senate Republicans can persuade Trump to make the bill's temporary business tax breaks permanent, according to the nonpartisan Committee for a Responsible Federal Budget. The CRFB projects that if Senate Republicans get their way, Trump's One Big Beautiful Bill Act could drive the federal debt to $46.9 trillion in 2029, the end of Trump's term. That is more than double the $20.2 trillion debt level of Trump's first year at the White House in 2017. Majorities of Americans of both parties -- 72% of Republicans and 86% of Democrats -- said they were concerned about the growing government debt in a Reuters/Ipsos poll last month. Analysts say voters worry less about debt than about retaining benefits such as Medicaid healthcare coverage for working Americans, who helped elect Trump and the Republican majorities in Congress. "Their concern is inflation," Hoagland said. "Their concern is affordability of healthcare." The two problems are linked: As investors worry about the nation's growing debt burden, they demand higher returns on government bonds, which likely means households will pay more for their home mortgages, auto loans and credit card balances. Republican denial of the deficit forecasts rests largely on two arguments about the 2017 Tax Cuts and Jobs Act that independent analysts say are misleading. One insists that CBO projections are not to be trusted because researchers predicted in 2018 that the TCJA would lose $1.8 trillion in revenue by 2024, while actual revenue for that year came in $1.5 trillion higher. "CBO scores, when we're dealing with taxes, have lost credibility," Republican Senator Markwayne Mullin told reporters last week. But independent analysts say the unexpected revenue gains resulted from a post-COVID inflation surge that pushed households into higher tax brackets and other factors unrelated to the tax legislation. Top Republicans also claim that extending the 2017 tax cuts and adding new breaks included in the House bill will stimulate economic growth, raising tax revenues and paying for the bill. Despite similar arguments in 2017, CBO estimates the Tax Cuts and Jobs Act increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects. Economists say the impact of the current bill will be more muted, because most of the tax provisions extend current tax rates rather lowering rates. "We find the package as it currently exists does boost the economy, but relatively modestly ... it does not pay for itself," said William McBride, chief economist at the nonpartisan Tax Foundation. The legislation has also raised concerns among budget experts about a potential debt spiral. Maurice Obstfeld, senior fellow at the Peterson Institute for International Economics, said the danger of fiscal crisis has been heightened by a potential rise in global interest rates. "This greatly increases the cost of having a high debt and of running high deficits and would accelerate the point at which we really got into trouble," said Obstfeld, a former chief economist for the International Monetary Fund.
Yahoo
09-06-2025
- Business
- Yahoo
Defying debt warnings, Republicans push forward on Trump tax agenda
By David Morgan WASHINGTON (Reuters) -U.S. President Donald Trump and his Republican allies in Congress are determined to enact his tax-cut agenda in a political push that has largely abandoned longtime party claims of fiscal discipline, by simply denying warnings that the measure will balloon the federal debt. The drive has drawn the ire of Elon Musk, a once-close Trump ally and the biggest donor to Republicans in the 2024 election, who gave a boost to a handful of party deficit hawks opposed to the bill by publicly denigrating it as a "disgusting abomination," opening a public feud with Trump. But top congressional Republicans remain determined to squeeze Trump's campaign promises through their narrow majorities in the Senate and House of Representatives by July 4, while shrugging off warnings from the official Congressional Budget Office and a host of outside economists and budget experts. "All the talk about how this bill is going to generate an increase in our deficit is absolutely wrong," Senate Finance Committee Chairman Mike Crapo told reporters after a meeting with Trump last week. Outside Washington, financial markets have raised red flags about the nation's rising debt, most notably when Moody's cut its pristine "Aaa" U.S. credit rating. The bill also aims to raise the government's self-imposed debt ceiling by up to $5 trillion, a step Congress must take by summer or risk a devastating default on $36.2 trillion in debt. "Debt and deficits don't seem to matter for the current Republican leadership, including the president of the United States," said Bill Hoagland, a former Senate Republican aide who worked on fiscal bills including the 1997 Balanced Budget Act. The few remaining Senate Republican fiscal hawks could be enough to block the bill's passage in a chamber the party controls 53-47. But some have appeared to be warming to the legislation, saying the spending cuts they seek may need to wait for future bills. "We need a couple bites of the apple here," said Republican Senator Ron Johnson of Wisconsin, a prominent fiscal hardliner. Republicans who pledged fiscal responsibility in the 1990s secured a few years of budget surpluses under Democratic former President Bill Clinton. Deficits returned after Republican President George W. Bush's tax cuts and the debt has pushed higher since under Democratic and Republican administrations. "Thirty years have shown that it's a lot easier to talk about these things when you're out of power than to actually do something about them when you're in," said Jonathan Burks, who was a top aide to former House Speaker Paul Ryan when Trump's Tax Cuts and Jobs Act was enacted into law in 2017. "Both parties have really pushed us in the wrong direction on the debt problem," he said. Burks and Hoagland are now on the staff of the Bipartisan Policy Center think tank. DEBT SET TO DOUBLE Crapo's denial of the cost of the Trump bill came hours after CBO reported that the legislation the House passed by a single vote last month would add $2.4 trillion to the debt over the next 10 years. Interest costs would bring the full price tag to $3 trillion, it said. The cost will rise even higher - reaching $5 trillion over a decade - if Senate Republicans can persuade Trump to make the bill's temporary business tax breaks permanent, according to the nonpartisan Committee for a Responsible Federal Budget. The CRFB projects that if Senate Republicans get their way, Trump's One Big Beautiful Bill Act could drive the federal debt to $46.9 trillion in 2029, the end of Trump's term. That is more than double the $20.2 trillion debt level of Trump's first year at the White House in 2017. Majorities of Americans of both parties -- 72% of Republicans and 86% of Democrats -- said they were concerned about the growing government debt in a Reuters/Ipsos poll last month. Analysts say voters worry less about debt than about retaining benefits such as Medicaid healthcare coverage for working Americans, who helped elect Trump and the Republican majorities in Congress. "Their concern is inflation," Hoagland said. "Their concern is affordability of healthcare." The two problems are linked: As investors worry about the nation's growing debt burden, they demand higher returns on government bonds, which likely means households will pay more for their home mortgages, auto loans and credit card balances. Republican denial of the deficit forecasts rests largely on two arguments about the 2017 Tax Cuts and Jobs Act that independent analysts say are misleading. One insists that CBO projections are not to be trusted because researchers predicted in 2018 that the TCJA would lose $1.8 trillion in revenue by 2024, while actual revenue for that year came in $1.5 trillion higher. "CBO scores, when we're dealing with taxes, have lost credibility," Republican Senator Markwayne Mullin told reporters last week. But independent analysts say the unexpected revenue gains resulted from a post-COVID inflation surge that pushed households into higher tax brackets and other factors unrelated to the tax legislation. Top Republicans also claim that extending the 2017 tax cuts and adding new breaks included in the House bill will stimulate economic growth, raising tax revenues and paying for the bill. Despite similar arguments in 2017, CBO estimates the Tax Cuts and Jobs Act increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects. Economists say the impact of the current bill will be more muted, because most of the tax provisions extend current tax rates rather lowering rates. "We find the package as it currently exists does boost the economy, but relatively modestly ... it does not pay for itself," said William McBride, chief economist at the nonpartisan Tax Foundation. The legislation has also raised concerns among budget experts about a potential debt spiral. Maurice Obstfeld, senior fellow at the Peterson Institute for International Economics, said the danger of fiscal crisis has been heightened by a potential rise in global interest rates. "This greatly increases the cost of having a high debt and of running high deficits and would accelerate the point at which we really got into trouble," said Obstfeld, a former chief economist for the International Monetary Fund. 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Medscape
04-06-2025
- Business
- Medscape
Medicare Advantage Plans: Where's the Advantage?
Medicare Advantage (MA) plans entice many seniors with their simplicity and bundled coverage, offering an alternative to the complexity of traditional Medicare's separate Parts A, B, and D. When launched under the 1996 Balanced Budget Act as Medicare+Choice, they were intended to expand options and reduce costs for Medicare beneficiaries by inviting private insurers into the fold, but over time they have become a profit center for private interests at taxpayers' expense. Madelaine (Mattie) A. Feldman, MD Industry groups like AHIP insist that MA plans 'deliver better services, better access to care, and better value.' Yet, independent voices, such as the Center for Medicare Advocacy, point out that 'private plans were supposed to deliver better care more efficiently — and they have done neither.' The gap between marketing and reality is now too large to ignore. One of the biggest draws for MA plans, which have enrolled nearly 33 million Americans, is the cap on out-of-pocket costs. Unlike traditional Medicare, which covers only 80% of expenses and requires a separate Medigap policy for the rest, MA plans set a maximum annual limit on what enrollees pay (up to $9350 for in-network services in 2025). Monthly premiums for MA plans also tend to be lower, averaging $17 in 2025, and in some cases, there's no additional premium at all. The marketing is relentless: Seniors are bombarded with ads promising extra benefits like dental, vision, hearing, gym memberships, and even cash cards for everyday expenses. These commercials often paint a picture of comprehensive, affordable care that's hard to resist. However, many of these promises come with caveats. For instance, a plan might tout dental coverage but fail to mention the $160 annual cap, promote broad provider choice while restricting access to a narrow network of doctors and hospitals, or have directories that are out of date, listing physicians who are no longer in network. What's more, many of the most generous-sounding benefits are available only to specific groups, particularly those who are 'dual-eligible' for both Medicare and Medicaid. These beneficiaries are highly sought after by MA plans, not because they are sicker or need more help but because they bring in higher payments from the government, making them especially profitable for insurers. This raises an important question: Do MA plans truly deliver on their promises, or are they simply designed to attract the most lucrative enrollees? Here is how dual-eligible beneficiaries bring in more money: Higher reimbursement rates with profit margins outpacing costs Plans will often 'cherry pick' healthier beneficiaries. For example, Humana reported a 30% enrollment increase in dual-specific plans by marketing to younger, non-nursing home populations. Plans will inflate risk scores for the multiple chronic conditions that dual-eligible individuals often have. For example, coding "major depressive disorder" instead of "mild depression" adds about $2500/year per enrollee. Limited accountability for outcomes Only 5% of dual-eligible individuals are in fully integrated Medicare-Medicaid plans, allowing MA plans to avoid responsibility for long-term care costs, which are covered by Medicaid. Controversies and risks Care delays: 73% of MA prior authorization requests for dual-eligible individuals are initially denied, delaying biologics and specialty drugs. Taxpayer costs: Overpayments to MA plans for dual-eligible individuals contribute to Medicare's fiscal instability, raising Part B premiums for all beneficiaries. What the Ads Don't Tell You Unmet needs remain, even for 'extra' benefits. The Centers for Medicare & Medicaid Services (CMS) provides nearly $20 billion per year in rebates to MA plans to fund supplemental benefits, but many low-income MA enrollees still report unmet dental, vision, and hearing needs due to cost. The reality is that advertised benefits often come with low annual caps or limited provider networks, leaving many seniors unable to access or afford the care they were promised. Narrow networks limit your choice of doctors. Ads and brokers rarely mention that MA plans restrict which doctors and hospitals you can use. While traditional Medicare lets you see any provider who accepts Medicare (about 90% of US physicians), MA plans are notorious for 'narrow' networks. For example, a recent 'Network Adequacy' complaint to CMS described an MA plan in Florida that removed about 70% of rheumatologists in Palm Beach County from its network, leaving patients scrambling to find care. The Coalition of State Rheumatology Organizations (CSRO) has highlighted this and other growing problems in a recent webinar. Prior authorizations create delays and denials. Another major issue unique to MA plans is the widespread use of prior authorizations. According to AARP, over 90% of MA plans require prior authorization for services ranging from lab tests and procedures to hospital stays. For medications administered in the doctor's office (Part B drugs), 98% of MA plans require prior authorization. These hurdles often result in delays, denials, and extra administrative burden for both patients and providers, and they are not present in traditional Medicare. MA plans impose strict drug formularies and 'fail first' (step therapy) policies. In these policies, which are often placed especially on provider-administered medications, patients are often forced to try and fail on less effective or unaffordable drugs before getting the therapy their doctor originally recommended. These utilization management tools are not used in original Medicare. Rheumatologists across the country, as reported to the CSRO's Payer Issue Response Team, consistently encounter these obstacles, which delay or block access to needed care. Brokers have incentives to hide the risks of enrolling in MA plans. Seniors are often unaware that brokers earn higher commissions for enrolling them in MA plans than for signing them up for traditional Medicare with a supplement. Once enrolled in an MA plan, it can be difficult or expensive to switch back to traditional Medicare, as obtaining a Medigap plan may require medical underwriting — a barrier not present when enrolling in Medigap at the outset. Brokers rarely disclose these risks. Although CMS's 2025 Final Rule aimed to standardize and cap agent and broker compensation, lawsuits have delayed these changes, so strong financial incentives for brokers to steer seniors into MA plans remain in place. MedPAC's Assessment of MA Cost and Care Despite industry claims that MA plans save the government money, the independent Medicare Payment Advisory Commission (MedPAC) has repeatedly found the opposite. In its March 2025 report, MedPAC estimated that MA plans will cost the federal government $84 billion more in 2025 alone than if those same beneficiaries were enrolled in traditional fee-for-service Medicare — a 20% overpayment. These excess costs are driven mainly by two factors: 'coding intensity,' where MA plans document more diagnoses to increase risk scores and payments; and 'favorable selection,' meaning MA plans tend to enroll healthier individuals whose costs are lower than their risk scores suggest. MedPAC's analyses, echoed by other independent experts, show these overpayments have ranged from about $80 billion to as high as $140 billion per year. The commission also highlights that nearly half of MA enrollees face restricted provider networks, which can delay or limit access to care for complex conditions. For example, 68% of MA plans require prior authorization for rheumatology drugs, compared with 0% in traditional Medicare, leading to further barriers for patients. In summary, MedPAC does not view MA plans as a cost-saving success and continues to urge Congress to reform payment policies and address these structural imbalances. Profits Over Patients? MA's evolution into a system where profits often take precedence over patient care is starkly illustrated by the recent Department of Justice criminal investigation into UnitedHealth's Medicare Advantage business practices, which follows allegations of Medicare fraud and inflated risk coding. At the same time, rising care costs and increased scrutiny have led some insurers to scale back: Many plans are exiting markets, shrinking service areas, or reducing benefits to preserve profit margins. In 2025, 60% of MA plans weakened their benefit offerings, meaning enrollees get even less coverage than before. Unlike traditional Medicare, where benefits are stable and guaranteed, MA plans can and do reduce care to maintain their bottom line — leaving seniors with fewer choices and more barriers when they need care most. Greater scrutiny of insurers' business practices for MA plans appears to be on the way. CMS recently announced that it will immediately 'audit all eligible MA contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024.' While not all MA plans are problematic, it appears that the significant issues seniors are already facing are likely to become increasingly more common in the future. If we are to preserve the original intent of this public-private partnership, we must institute some reforms: rigorous oversight, true accountability in health care decisions, and a renewed commitment to equity in care. Anything less risks turning Medicare Advantage's promise into little more than a marketing slogan, rather than the safety net our seniors deserve.
CBC
24-03-2025
- Business
- CBC
Quebec's budget will include measures to address Trump's tariff threats — but they'll be expensive
Social Sharing Quebec will present its budget on Tuesday and the province's finance minister Eric Girard has signalled it will include financial supports to help businesses adapt to tariffs and the changing economic situation with the U.S. But the new measures will increase costs at a time when Quebec is running a historically large deficit and struggling to rein in spending. Last year, Quebec presented a budget with a projected deficit of $11 billion — its highest ever, Girard said at the time. On Friday, Girard signalled that the projected deficit this year will be even larger because of economic headwinds caused by tariffs. "There's a lot of uncertainty. It has an impact on the economic situation," he said. "It has an impact on the measures we have to take." But Girard said the province was still committed to "responsible management of public finances." There is as of yet no indication on exactly how large of a deficit Quebec will run in 2025-26, but Girard has indicated that the government supports to help businesses cope with tariff threats will have a cost and that will mean increases to public spending. He said last week the government was planning to support businesses affected by tariffs and economic uncertainty in three phases. "There are emergency measures … to support businesses," he said. "There will be a period of transition because the economy will transform and there are important efforts at the level of innovation, investing to help companies to be able to face the new economic challenges." Much of the province's deficit from 2024-25 — $3.2 billion — was structural. That means that the province had some expensive budget items that were considered temporary costs, but even in a perfectly healthy economy, the cost of running the government would still exceed tax revenue by $3.2 billion. With that kind of spending, the government stands little chance of presenting a balanced budget in the next five years. The Institut du Québec (IDQ), a non-profit economic research institute, said in a report earlier this month that Quebec will be unable to attain a balanced budget by 2029-30 — as prescribed by law — unless it seriously limits spending or increases taxes. The IDQ said Quebec could reach a balanced budget sooner than projected by raising the provincial sales tax 0.5 per cent — or by drastically reducing spending. The institute said that despite a slowdown in public spending, Quebec is still taking on too much debt and is in no place to balance its budget any time soon nor reduce debt-to-GDP ratio to 35.5 per cent — another legal requirement under the Balanced Budget Act. Santé Quebec, the new Crown corporation in charge of the health-care system, has attempted to reduce spending throughout the network while reducing the impact on patients, but it has so far proven difficult. Girard told reporters last week that he was not ruling out raising taxes — but he said the government would not increase the sales tax as the IDQ suggested. He declined to provide more details about what could be in the budget, beyond suggesting that Quebec was prepping for economic uncertainty caused by President Donald Trump's tariff threats. "You'll see that the government has been thoughtful, has supported the economy in different phases," Girard said. Tariff turmoil could also throw the economy into a recession, Girard has warned. If that happens, it would constrain Quebec's public spending even further because when the economy contracts, government revenues tend to dip and program costs for things like unemployment tend to rise.
