Truth in the Barrel: Episode Summary – "Devil’s Cut | The Federal Budget Distilled"

Release Date: April 22, 2025

Hosts:

• Amy McGrath – Military veteran, political analyst, and educator in federal budgeting.
• Denver Riggleman – Military veteran, former Congressman, and business owner.

Podcast Overview: Truth in the Barrel is a bipartisan podcast hosted by Amy McGrath and Denver Riggleman, both military veterans and political enthusiasts with a shared love for whiskey. Despite their political differences, they unite in their commitment to the United States, the Constitution, and the appreciation of fine bourbon. Each week, they delve into topical issues, interview notable guests, and engage listeners through call-in segments.

1. Introduction: Setting the Stage for Budget Discussions

Amy McGrath [00:06]:

"It's budget time. You hear about this every year and here are some of the things that you might hear throughout the years... [but] why can't we fix this budget? And what's that all about?"

Amy introduces the episode's focus on the federal budget, highlighting common misconceptions and political rhetoric surrounding the national debt and deficit.

Denver Riggleman [00:57]: Before diving into the budget discussion, Denver shares a lighter moment by introducing a special bottle of Old Forester's 1910 Whiskey Row series, emphasizing the personal connection and camaraderie between the hosts.

2. Understanding the Federal Budget: Deficit vs. Debt

Amy McGrath [05:21]:

"A deficit is you're not taking in as much as you're spending."

Amy breaks down the basics of the federal budget, explaining the two primary components:

• Outlays (Spending): Approximately $6.1 trillion in 2023.
• Revenues (Taxes): Around $4.4 trillion annually.

The deficit is the gap between spending and revenue, which was about $1.6 trillion in recent years. Persistent deficits contribute to the national debt, the cumulative total of yearly deficits.

3. Historical Context: Trends in Deficit and Debt

Amy McGrath [04:33]:

"I started learning about the federal budget after my third combat tour... I did a congressional fellowship and I went to Capitol Hill as an independent, not knowing anything about the budget."

Amy provides a historical overview of federal budgeting, tracing deficit trends from the Clinton administration's surplus to subsequent deficits under Bush, Obama, Trump, and Biden.

Key Points:

• Clinton Administration: Achieved a surplus for four years, leading to political debates on surplus distribution.
• Bush Administration: Implemented tax cuts and expanded entitlements without corresponding revenue increases, pushing the budget back into deficit.
• Obama Administration: Initially increased deficits to combat the 2008 financial crisis but worked towards deficit reduction.
• Trump Administration: Passed the Tax Cuts and Jobs Act, further increasing the deficit.
• Biden Administration: Continued deficit spending with major legislative acts like the Infrastructure Bill, American Rescue Plan, and Inflation Reduction Act.

4. Current Deficit Projections and Political Narratives

Denver Riggleman [08:26]:

"I'm gonna make a guess... we're going to hit the 3 to 3.5 trillion mark in deficit spending this year."

Denver discusses varying projections of the current year's deficit, highlighting discrepancies between nonpartisan estimates and partisan reports.

Amy McGrath [18:22]:

"The Republican plan would add $580 billion to the deficit. The House Republican plan would add $280 billion."

Amy contrasts Republican budget proposals with Democratic legislative spending, asserting that bipartisan initiatives have historically added less to the deficit than recent Republican plans.

Notable Quote: Amy McGrath [31:00]:

"We cut the corporate tax rates. And that was, everybody loved that. Right. Well, that costs us $500 billion a year."

Amy emphasizes the significant impact of tax cuts on federal revenues, challenging the notion that such measures can offset deficit growth without additional spending cuts or revenue increases.

5. Mandatory vs. Discretionary Spending: Where to Cut

Amy McGrath [21:43]:

"Mandatory spending simply is spending that goes out no matter what every year... Social Security, Medicare, Medicaid, VA, Veterans benefits, military retirement, pension... Discretionary spending is the piece that Congress has to appropriate."

Key Definitions:

• Mandatory Spending: Programs that require funding by law, including Social Security, Medicare, Medicaid, and defense pensions. This accounts for approximately 50% of federal spending.
• Discretionary Spending: Programs that require annual appropriations by Congress, split roughly 50/50 between military and civilian expenditures, constituting about 26% of the total budget.
• Interest on Debt: Accounts for the remaining 12% of spending.

Discussion: Amy and Denver explore the challenges of cutting spending in discretionary areas versus mandatory programs. Amy stresses that even eliminating all discretionary spending would not eliminate the deficit, as mandatory spending alone constitutes a significant portion of federal expenditures.

6. The Appropriations Process: Navigating Complexity and Partisanship

Denver Riggleman [25:00]:

"Earmarks were renamed to congressionally directed spending in the Senate and community project funding in the House."

Denver explains the intricacies of the appropriations process, detailing how lobbying and earmarks (now rebranded) influence budget allocations.

Amy McGrath [28:05]:

"Most people don't understand because, if you think you can just 'cut fraud, waste, and abuse,' here's the thing... [even with] cutting all federal outlays aside from mandatory spending, there's still a deficit."

The hosts delve into the procedural aspects of budget formulation, including the roles of various committees and the reconciliation process under the Congressional Budget Act of 1974. They highlight how partisan maneuvering and lobbyist influence complicate efforts to implement balanced budget solutions.

7. Potential Solutions: Balancing Spending and Revenue

Amy McGrath [35:51]:

"We had the Simpson Bowles plan... Both of those plans would have put us on a fiscally sound path, but Congress did not have the courage to enact any of them."

Amy references bipartisan efforts like the Simpson-Bowles Commission that proposed comprehensive budget reforms, which ultimately failed due to political reluctance.

Denver Riggleman [37:37]:

"We need to cut spending and increase revenues. That's math."

Denver advocates for a dual approach to deficit reduction, emphasizing the necessity of both spending cuts and revenue enhancements. He underscores the political difficulty of implementing such measures, especially when they involve unpopular actions like tax increases or entitlement reforms.

Key Considerations:

• Spending Cuts: Targeting discretionary spending and reforming or restructuring mandatory programs.
• Revenue Increases: Addressing tax policies, potentially increasing taxes or eliminating tax loopholes.
• Economic Impact: Recognizing how fiscal policies affect economic growth, employment, and inflation.

8. The Role of Tax Policy and Entitlement Programs

Amy McGrath [30:13]:

"We just cut fraud, waste and abuse. Here's the thing, folks... we would still have a deficit."

Amy discusses the limitations of merely addressing inefficiencies within federal programs without tackling the broader issues of mandatory spending and revenue shortfalls.

Denver Riggleman [33:24]:

"The federal tax burden is lower compared to state taxes... Payroll taxes suck on the federal side."

Denver highlights the burden of taxes at both federal and state levels, pointing out the cumulative impact on businesses and individuals. He emphasizes the need for a holistic understanding of the tax system to effectively balance the budget.

Notable Quote: Amy McGrath [36:55]:

"Since Reagan, every single Republican president has made the deficit worse and every single Democratic president has made the deficit better."

Amy challenges the notion that deficit growth is exclusively a partisan issue, presenting data that suggests Democratic administrations have generally managed deficits more effectively than their Republican counterparts.

9. The Urgency of Addressing National Debt

Amy McGrath [43:32]:

"We got to have a serious conversation about this, because again, my worry is not only are we saddling our kids and grandkids with debt... world investors are going to look at our massive debt, and we don't know when that's going to go off the cliff."

Amy underscores the long-term risks of unchecked national debt, including potential loss of investor confidence and economic instability. She draws parallels to climate change, emphasizing the unpredictability and urgency of the issue.

Denver Riggleman [40:23]:

"We need serious people in office to address serious problems."

Denver calls for competent and honest leadership to navigate the complex challenges of fiscal policy, advocating for bipartisan cooperation to implement sustainable budgetary reforms.

10. Conclusion: A Call to Action for Informed Citizenship

Amy McGrath [43:30]:

"We don't have serious people in government right now. They're spewing out a bunch of lies. They're spewing out of falsehoods and numbers, and somehow magically, we're going to fix our deficit and our debt when none of that stuff is true."

Amy wraps up the discussion by urging listeners to educate themselves on the federal budget's intricacies, encouraging active participation in the political process to elect leaders committed to fiscal responsibility.

Denver Riggleman [43:55]:

"We don't want to turn fantasy into fact, do we? We don't want to be literally eating cats when nobody can afford anything anymore."

Denver humorously yet poignantly illustrates the dire consequences of fiscal mismanagement, reinforcing the podcast's call for serious and informed dialogue on national budgeting issues.

Notable Takeaways:

• The federal deficit and national debt are complex issues influenced by both spending and revenue policies.
• Persistent deficits are a bipartisan problem, with historical trends showing contributions to deficit growth from multiple administrations.
• Addressing the deficit requires a balanced approach of spending cuts and revenue increases, necessitating difficult political choices and bipartisan cooperation.
• The appropriations process is highly intricate and susceptible to partisan manipulation, making transparent and informed citizen engagement crucial.
• Long-term fiscal irresponsibility poses significant risks to economic stability and future generations.

Final Thought: Truth in the Barrel provides a nuanced and informed discussion on the federal budget, demystifying complex fiscal concepts and highlighting the urgent need for responsible governance. By combining personal anecdotes with expert analysis, Amy McGrath and Denver Riggleman offer listeners a comprehensive understanding of the nation's financial challenges and the pathways toward sustainable solutions.

For more insights and in-depth discussions, visit www.TruthintheBarrel.com.