David Stockman's Contra Corner
November 13, 2025
You've got to hand it to the Republican knuckleheads on Capitol Hill. After finally getting the Dems on the run politically, they are now fixing to take a powder yet again and open the government with runaway spending as usual.
We are referring, of course, to the Dem's demand that the already generous ObamaCare subsidies, which originally capped payments for most middle class Americans using the Obama Exchanges at 10% of their income, be made far more generous by extending the "enhanced"subsidies enacted on a "temporary" basis during the pandemic. These additional pandemic era subsidies included 20% lower caps on premium costs, no income limit on eligibility and many other lesser goodies-all at a price tag of upwards of $350 billion over the next decade alone
In fact, the cost of ACA subsidies has grown by nearly 8X during the last decade--rising from $18 billion at its start to an estimated $138 billion in 2025. This spending explosion was due to growing enrollment, the inherent inflationary bias of ObamaCare and then sharply increased premium subsidy levels enacted on a temporary basis during the so-called pandemic "emergency". Extending these enhanced pandemic era subsidies would ensure that the annual costs keep climbing skyward.
Accordingly, it was the Dems who blocked a clean CR in behalf of the enhanced ObamaCare subsidies and thereby turned the current funding hiatus into the Schumer Shutdown. In turn, Senator Chuckles and the Dems could be readily blamed for causing the airports to close, food stamp credit cards to bounce for insufficient funds, Zelensky's next $5 billion Ukraine war check to be delayed and other like and similar disruptions at Federal agencies.
In sum, the GOP had the Dems by the political short hairs, but what did they do?
In a word, they gave the ObamaCare subsidies a hall pass to fight another day when they should have said hell no! to the 24 million recipients who don't vote for Republicans anyway. At the same time, moreover, they did absolutely nothing to leverage any spending reductions at all in the here and now of the FY 2026 appropriations at issue. The compromise bill literally does not save a single dimeand amounts to GOP validation of the Biden spending levels that Trump inherited.
The careerists who comprise the GOP on Capitol Hill simply don't have the stomach for the fiscal fight. They are unwilling to tell the voters that Uncle Sam is flat broke and that fiscal policy has to go into deep austerity before the Federal government can be funded as usual ever again.
Moreover, this GOP cowardice actually goes so far as to even encompass a whole lot of whimpering in Republican ranks about the alleged severe plight of several million "unpaid" Federal employees.
Well, for crying out loud. Every Federal employee's paycheck is being fully accrued, even if electronic paycheck deposits on the two-week Federal pay calendar are being temporarily delayed. However, there have been several dozen government shutdowns since the 1970s and each and every time deferred employee paychecks have been made money-good at the end of the shutdown.
So what these GOP political pantywaists are actually saying is that the average Federal employee, who is making $106,000 per year, is literally living hand-to-mouth and has no cash at all to cover living expenses until payroll accruals are distributed. And that's just plain pathetic if true, but likely is just another excuse from the GOP hypocrisy mills.
In fact, the apparent key to the impending Thune Plan "compromise" lies in three full-year appropriations bills, which go along with a temporary CR for the rest of the government, plus money to keep the food stamp EBT cards working. But the generous level of funding contained in the three bills ponied up today by the Senate GOP Leader and the porkers on the Senate Appropriations Committee, tells you all you need to know.
To wit, after years of howling about runaway spending under Sleepy Joe Biden and how that caused the recent 40-year high inflation, it turns out that the Thune Plan will fund the three appropriations bills at a level which is +$61.5 billion and+48.9% higher than the last GOP-controlled, pre-pandemic appropriations bill for FY 2019.
That's right. The appropriation bills in question include the Agriculture/FDA appropriations, the Military Construction/Veterans bill (MCVA) and the Legislative branch funding bill. What happened is that during the last year before the pandemic spending bacchanalia's incepted funding for these three bills totalled $125.9 billion. Then in FY 2020 and FY 2021 both Trump 1.0 and Biden added a huge helping of emergency spending, which took the combined figure to $144.2 billion in FY 2021, followed by another big jump to just under $187 billion in FY 2024.
The latter level represented the so-called Biden runaway spending surge, but the GOP nevertheless embraced it fully last March when the continuing resolution for FY 2025 passed with a216-1 Republican vote in the House and a 52-1 GOP vote in the Senate. As is evident in the table, the "courageous" stand now being taken by Leader Thune and the Senate GOP porkers amounts to, well, ratifying at 100% for the second time in nine months the inflationary spending levels left on the table by Sleepy Joe Biden!
What is especially galling is that the alleged anti-spending GOP leadership did not hesitate to increase funding for Congressional staff and other Capitol Hill spending and perks to $7.0 billion in the Legislative Branch bill for FY 2026, representing a 45.8% increase from FY 2019. Similarly, the MCVA bill at $153. 3 billion is up by a staggering $55 billion or +56% from FY 2019 levels due to huge increases in funding for VA health care and special programs for Agent Orange and other toxic exposures.
Three Appropriations Bills Funding Level, FY 2019 to FY 2026
What stands out like a sore thumb in the above table is the $55.2 billion increase in the MCVA bill since FY 2019. As shown below, that's due almost entirely to soaring funding for VA discretionary programs.
In turn, the nearly $47 billion billion rise in VA discretionary funding (54% growth) from FY 2019 to FY 2026 stems from a combination of legislative expansions aimed at addressing health care and toxic exposure harms that have resulted from Washington's pointless Forever Wars since the 1960s. The major drivers are shown below, but the largest piece is owing to the PACT Act benefits, which were approved by large UniParty majorities in 2022 (342-88 in the House and 86-11 in the Senate).
- The PACT Act of 2022 (Honoring Our Promise to Address Comprehensive Toxics Act) added billions in health care and benefits costs by expanding eligibility for about 3.5 million veterans exposed to burn pits, Agent Orange, and other toxins during service in Vietnam, Gulf Wars, Iraq, Afghanistan, or even stateside training. This legislation also created a $53 billion program for augmenting discretionary medical care for toxic exposure-related services, leading to:
- 739,000 new VA health care enrollments since August 2022.
- Over 1 million new disability claims processed, with $6.8 billion in retroactive benefits paid.
- Surging appointments: 127 million projected for 2024, plus IT/staffing investments of about $3.5 billion for electronic health records).
- The MISSION Act of 2018 (Maintaining Internal Systems and Strengthening Integrated Outside Networks) expanded community-based care (non-VA hospitals) to reduce wait times and improve access, especially in rural areas. Funding for community care therefore ballooned from $10 billion in FY2020 to $34 billion in FY2026-a 240% increase-due to higher utilization (now 40% of VA care).
The surge in funding also reflects cost-of-living adjustments (COLAs) for VA's huge work force of 443,000, as well as demographic pressures. An aging veteran population (18 million total) and rising costs for specialized care (e.g. $6.4 billion for telehealth, $3.5 billion for homelessness/caregiver programs, $710 million for opioid treatment, $1.4 billion for women's health etc.).
Surge In VA Discretionary Funding, FY 2019 to FY 2026
FY2019-FY2026 Increase: +$46.6 billion
Seven-Year % Change:+53.8%
Here's the thing. There are currently about 10 million veterans (55% of all living veterans) receiving some kind of disability compensation, pension, education support, housing aid and health care or vocational rehabilitation services from the VA. However, only about 15,000 or 0.15% are actually still living WWII vets--with the rest attributable to a succession on unnecessary Forever Wars from Korea to the latest skirmish in the Middle East.
Stated differently, the UniParty has supported and funded what amounts to a $1.5 trillion Warfare State budget when you include the deferred cost of military interventions embodied in life-time support of wounded servicemen. So when push comes to shove on fiscal showdowns like the current impasse over FY 2026 appropriations, the massive funding for the Warfare State is invariably the tail which wags the dog.
But this is also one of the reasons why US fiscal governance is irretrievably broken. The so-called conservative party on the fiscal front is hostage to the Warfare State it sponsors and champions. At the same time, it is politically cowered and defenestrated by Dem demagoguery about theWelfare State, which the latter see as their meal ticket to re-election, regardless of the policy merits. So we have now reached the point where the Trumpified GOP says both Medicare and Social Security are off limits, despite a ten-year baseline cost of $40 trillion!
As we will lay out in Part 2, this Fiscal Incapacitation was born in the Reagan years and got reinforced by the Fed's shift to massive monetization of the public debt under Alan Greenspan and his heirs and assigns. And it has also been mightily reinforced by a phony supply-side ideology which claims that tax cuts are a magic growth elixir that will cause deficits to fade away all on their own, and that no political capital needs be squandered in behalf of spending cuts and entitlement reforms.
As is now evident beyond all doubt, however, deficits have not faded away. Accordingly, we are heading into an era of Fiscal Chaos from which there is no exit. Today's Senate capitulation is just another step along an accelerating path to disaster.
Reprinted with permission from David Stockman's Contra Corner.