Devil’s Cut | The Federal Budget Distilled

Summary

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

Transcript

[Denver Riggleman]

Foreign.

[Amy McGrath]

Welcome to Truth in the barrel. I'm Amy McGrath with Denver Riggleman and it's budget time. You hear about this every year and here are some of the things that you might hear throughout the years. Okay? Things like Democrats spend too much and that's why we have a national debt. Or we can balance the budget if we just get rid of fraud, waste and abuse. Or my favorite, this is from Trump 1.0, quote, I'll fix the debt, lower your taxes, increase the military budget all at once. Spoiler alert. That's really impossible. But why can't we fix this budget? And what's that all about? That's what we're going to talk about today on Truth in the Barrel. But first I hand it over to Denver to talk about what's more important. Whiskey.

[Denver Riggleman]

Whiskey. Truth always comes out of the barrel, right? So again, I know it's been back to back days and a whole week for me of being sick. So as we go through all this, I apologize to Amy and to our listeners for my husky, cold ridden voice. But you know what helps with a cold ridden voice? You know What? Old Forester, 1910. Right. Lovely old fine whiskey. And I want to read about it. So this is a special bottle my wife and I got so here and we're opening it for this show. By the way, Amy, that's how special you are to me. Just let you know. So in 1910, a fire on whiskey row led to Old Forester being re barreled into heavily charred barrels. This double barreled expression follows the same process as the original old fine whiskey.

[Amy McGrath]

Love it. From 19.

[Denver Riggleman]

Pretty sweet, huh? Look at this. The color.

[Amy McGrath]

Beautiful. And how does it taste, Denver? How does it taste?

[Denver Riggleman]

I'm gonna pop it for the first time right here. Took off the label. Right. So I'm gonna pop at the cork. Oh, that's a pop. That means it's bottled perfectly. And I'm gonna pour it.

[Amy McGrath]

Oh, yeah, I hear that.

[Denver Riggleman]

Did you hear that? Did you hear that? Yes, that's right. That's right. So, hey, so this is a. Oh my God, the nose. Remember, you know, we've had this a while back, but I'm just smelling it. It's 93 proof. Just to let people know. So that's 46.5% ABV, man, the nose. You know, a lot of people come up with the nose. Like the nose is cherry with a hint of butterscotch, a little bit of leather. Hmm. And spaceship metal. Unbelievable. But this really just has a nose of beauty. So here's to To. To Old Forester whiskey in the 1910 Whiskey Row series. Beautiful.

[Amy McGrath]

Cheers.

[Denver Riggleman]

Cheers. Cheers.

[Amy McGrath]

Let's start this thing. All right.

[Denver Riggleman]

Yeah. Oh, my God. Oh, that is sweet butterscotch love right there.

[Amy McGrath]

We're going to need it today because we're tackling on this deep dive. This is the Devil's Cut episode of Truth in the Barrel, where we take one issue and we go into it so that you understand it a little bit better. And, you know, I. I started learning about the federal budget after my third combat tour, actually, when I was living in 10 in Afghanistan. And after I. I got out of that, I came home and I did a congressional fellowship and I went to Capitol Hill as an independent, not knowing anything about the budget. And it was right around the time, if you remember that the budget, it was sort of the middle of Obama's time frame, his eight years in office. And you're really trying to get the budget under control. And we'll talk about why that happened. But that's where I came to really understand this stuff. And so I've taught the federal budget at the U.S. naval Academy. I taught it as well at the University of Kentucky. And it's one of these things that you hear so much about, but most people don't fully understand it. They don't understand necessarily how we got into this mess. And there's a lot of lies out there. So.

[Denver Riggleman]

No, no, Amy, things like.

[Amy McGrath]

Things like, you know, who is to blame and how do we fix the deficit and how do we fix the debt? These are the questions that we're going to tackle today.

[Denver Riggleman]

Excellent. I'm ready. As you know. And, you know, it's funny, Amy, you talked about, you know, where you learned about it. I actually learned about it well before Congress because I was a Department of Defense CEO and contractor, and we had to submit our own PE lines. Right. How to deal with the ndaa, sending people up from specific organizations in the Air Force to lobby to make sure we got into the approbes packages that go to every office. You know what's going to be interesting about this, Amy? Your vast knowledge of the budget. It's going to be interesting with your knowledge of the budget and what I know now after being in Congress and going through the budget and the approach process, this should be a fascinating conversation because I think you can give strokes where people are going to really understand it. And if I may, I want to scare the hell out of people if you let me do that during the show, Amy, just on really how it.

[Amy McGrath]

Works, we need to do that occasionally. But let's just take it back initially and just talk very basics, because I get this question, what is a deficit anyway? And people have to understand there's two parts to even thinking about the federal budget. Very simple. The first part is spending. How much we spend as a country, how much does the federal government spend every year? Those that's called outlays. And for the past few years, we spent Denver, right, around 6 trillion per year, 6.1 trillion in 2023, for example. And then there's the other side, right? The other side is how much you bring in. We call it revenues, taxes. It's basically how much the federal government is taking in. And for the last few years, we've taken Right, around 4.4 trillion. And so the difference there, right, the difference between how much you take in and how much you spend is the deficit. All right, that's the deficit. In the last few years, our deficit has been right about 1.6 trillion. That's. That's a lot. And we have to borrow money to make.

[Denver Riggleman]

We do. I'm gonna have a shocking number here, and I know that as people are listening to us, Amy, they better be listening to us on our podcasts and on our YouTube. Right. You know, as we're going forward on this, because I want to remind people, while Amy is talking these incredible numbers, you better be going on our podcast or our YouTube channel and downloading our socials. And you better be knowing this, we're on True Social, too, because we're that brave. Anyway. It's not brave to be on social media, but people think so. I think true Socialist. But it's funny. You talk about the deficit. You know, I was reading a bipartisan report today, and I know people are like, oh, my God, Denver reads. I do, Amy. I do. Okay, when I said I was going to scare people, let me scare people really quick. The initial nonpartisan look at what they thought the deficit was going to be right there. Amy was almost right on. That's what's amazing, listeners. About 1.9 trillion, however. So it's going up. But what's amazing is that they are not counting. They had when the budget resolution. And I don't know if we want to go over the whole hierarchy of this beforehand, but when they submitted the budget, you know, and the budget is actually generated from the White House, and then it goes to. It's actually a budget process that starts with that actually specific asks based on mandatory funding and discretionary funding and all that. But what Amy was talking about Is that what's the gazentas and the Gazaltas. Right. And for a long time, our gazentas ain't matching our Gazaltas. So right now, though, with the new rules from budget, which pretty interesting, they didn't count the Tax Cut Act. Amy, so based on maneuvering through the rules, do you know what the real deficit could be this year? Do you want to take a guess?

[Amy McGrath]

I would say over 2 trillion.

[Denver Riggleman]

5.7 trillion.

[Amy McGrath]

Oh, my God. That's insane.

[Denver Riggleman]

So it's going to be any. Based on accounting or magic numbers, it's going to be between probably 1.9 and 5.7 trillion.

[Amy McGrath]

Well, let's take a step back for just for everybody, so we know what a deficit is. A deficit is you're not taking in as much as you're spending. All right? So every year, as Denver just said, that's happened for many, many, many years. And each year that adds up, deficit after deficit after deficit after deficit adds up. And what do you get when you add all that up? You get the national debt. That's what you get. So when you hear national debt, you need to know that that is the deficits added up year after year after year, because that goes on a credit card, folks. That goes on a credit card. We pay interest in that. And that's why the national debt goes up and up every single year. Now, as you mentioned, Denver, we've had deficits for a long time. We didn't have deficits at the end of the Clinton administration. We had for four years what's called a surplus. A surplus is when you have, you're taking in more money than you're spending. And that actually happened for four years. And that election in, in 2000, that was a big campaign issue because the candidates, the two candidates were asked about what to do with that surplus. One candidate said, we're going to give it back to you. That's the people's money. The other candidate said, we're gonna famously, we're gonna put it in a lockbox for when we need it. Now, which candidate do you think in America's political system won that particular debate? The one that said we' give the money back. Right. George Bush to won that and he gave that money back. But in Al Gore's defense, we kind of needed that money because right after Bush got into office and we went right back into deficit spending. Why? Because Bush cut taxes and he added another entitlement program called prescription drug medication for seniors, which I think is great, but wasn't paid for. And Then guess what happened? Nine, 11 happened, and we went to war. We went to war. We built dhs, Department of Homeland Security, tsa, which we all now have, and rightfully so. He built that part of the government, but he didn't pay for it, and he didn't ask the American people to pay for it because he not only didn't ask them to raise taxes to pay for it, but he actually cut taxes on top of that. So, bam, we're right back into deficit spending. And we've been that way ever, ever since at the end. And there's a great chart that I know our producers will throw up there. But at the end of Bush's era as president, what happened? The economy tanked. And the single most important piece that determines whether how big the deficit is, besides tax policy, which you just talked about, is the economy. And if the economy tanks, guess what? There's less people employed. They're not making as much money. So the income tax goes down and we're not getting as much revenue. And that's exactly what happened. Obama came in, Bush had to bail out the economy. So we spent. Obama spent some money to try to bail out and get us in the right trajectory. And we were going in the right trajectory. In fact, Obama cut the deficit during his time frame. But then Donald Trump got in office and passed. I know you know this pretty well, the big fat tax cut to.

[Denver Riggleman]

I wasn't there when that happened, Amy.

[Amy McGrath]

Yeah. Oh, God darn it. The Tax Cut and Jobs act, which added more to the deficit. And there, bam, we're back into major deficit spending again. Joe Biden gets in office, and guess what happens? Starts going in the other direction. And now here we are with Donald Trump and the Republicans in the House and Senate, and as you mentioned, massive, massive adding to, potentially adding to our deficit yet again.

[Denver Riggleman]

Yeah. When, you know, I was looking at the numbers, obviously Biden with the Infrastructure act and things like that, there was deficit spending. Right. We definitely added to the deficit and the debt at a rate that was a little bit lower than the Trump years, which I know people would be like, what? Wait a minute, what do you mean? A Democrat had a lower deficit and debt, increased spending than Republicans? That's sort of the way it goes. Right. And it's sort of funny that the Republicans talk about. And you know, I was there, I said it. Right. We're the ones who care about taxes and cutting spend it to balance the budget. Yet when you look at the numbers this year from the nonpartisan reports, it's pretty interesting. Also, I looked at some of the budget reports from the CBO and they did a lot of their stuff in January 2025 where they were forecasting a slightly lower deficit. I think it was about 1.3 trillion, Amy, before all the rigmarole and crazy happened with the terror stuff and the awful policies that Trump is implementing right now, for instance, I mean, we're looking like Covid years. It's like we shot ourselves in the face. Or 2008, when you see the precipitous decline of the stock market and also you see the suppressed job market and you see the rise in inflation simultaneously, which you just a, it's a frightful thing to have. A president doesn't understand how the economy works, even though he says he does. But here's the issue to scare people. If you go look at the CBO reports, the nonpartisan reports from independent reports, and you go look at the Republicans in the budget office, right in the Budget Committee, who put out their own report, they came out with arbitrary numbers that they said that the CBO missed, that actually Trump was so much better than Biden. Where do you actually go for facts and truth? And that's the issue we have right now. So here's what's going to happen, Amy. I'll tell you. I think we're going to have one of the single biggest deficit spending years this year and maybe even into next year. I'm going to make a guess. And Amy, I know you're going to be like Denver, you got to be shitting me. I'm going to think we're going to hit the 3 to 3.5 million or, I'm sorry, the 3 to 3.5 trillion mark in deficit spending this year. That's what I'm thinking. Now. It's going to depend on math. The Republicans are going to say that they're not accounting. They're going to, they're going to rationalize the spending to say that Biden was worse because they never accounted for Biden inflation, what they call it, which is some arbitrary numbers where they're trying to rationalize the Trump spending years to the Biden spending year. So here's what's going to happen. You're going to have Republicans saying that the deficit spending is about equal to Biden. Think that they're going to think that's a win, by the way, Amy, I just want to tell you that again, they're going to say it's about equal to Biden. I'm going to guess the CBO and nonpartisan Groups are going to say it's higher than Biden by 30 to 40%. I'm going to say the far left partisan reports are going to say it's higher from 60 to 70%. That's the first thing the American people are going to have to actually get their arms around. What we're really seeing though is this sort of irresponsible way of looking at the ledger. Amy, you just put it so perfectly right. It's the deficit every year is how much more or less we spend based on revenues. And now there's other things there too. And by the way, what's really interesting right now with the debt and I just want to make sure everybody knows this, Amy, and we can go into how the budget process works. Right now, 100% US taxpayers own 100% of the public debt is now of GDP is actually owned by us. It's on us. 100%. Amy, where do we go? That's not counting intra governmental spending. That's just the public spending side. So there's two parts to debt too. And Amy, that's why I love this conversation with you. Is that, is this sustainable? Where do we go? But then how does it keep getting so high? And that's where I want to go next. After, after, you know, you're talking about, is it sustainable? Because I want to talk about why it's so pathetic and ridiculous.

[Amy McGrath]

Yeah, yeah. And we're going to get to that. But there was something you said that I want to just clarify a little bit. You were talking about what the Republicans are going to say and what others were going to say about the deficit. There are numbers out there and they're real in terms of past numbers, okay? And there are quantifiable projections that we can see right now of the Senate Republican plan and the House Republican plan. And I checked those numbers over 10 years, which is what most people look at, and I broke it down into one year because I think in one year terms. So the Republican plan would add 580 billion to the deficit. 580 billion. And the House Republican plan would add 280 billion. Now, you talked about Biden's infrastructure bill and some of the other bills. President Biden and Democrats passed three major pieces of legislation that, that dealt with money, okay? The American rescue plan, the bipartisan infrastructure law and the Inflation Reduction Act. Now, it is absolute truth to say that the three of those combined, how much they cost us, the three of three of those combined are actually less than what either the House or the Senate Republican budget. This Year would cost us.

[Denver Riggleman]

Well, here's the thing. I guess what I was trying to say with the reimagining of the past by the Congressional Budget Office, which is majority written document, right, Amy, they own the committee. That's what I'm trying to tell people is that you're going to go need to look at sourcing of where you're getting your numbers because the arguments are going to come in a partisan way as the GOP line right now tries to protect the spending. It's absolutely true. The infrastructure bill yielded things. It's fantastic. Right. But we also have to look at the inflationary measures which are part of the deficit and debt additions. Right. But we also have to. What people don't understand too is that there is spending that's frivolous and there's spending that actually equals something as a long term payoff. When you're looking at the voting on the Infrastructure act, the thought was infrastructure has a long term payoff for increased revenues. And right back to everybody. Amy already taught everybody that revenues or taxes coming in. So what we're seeing right now though is we're seeing a tax cuts. Listen, I hate taxes. God dang. I love tax cuts. I love them. I run companies. If I went through the taxes on.

[Amy McGrath]

My company, people that run for office do love tax cuts.

[Denver Riggleman]

Yeah, you can. Yeah, I sure. Amy, I'm probably, you're up there. The debaters like, Amy, what do you think? Mitch McConnell wants tax cuts. What do you want, Amy? Amy goes, well, I really want tax increases across the board to bounce the budget.

[Amy McGrath]

Yeah. You know, you can't answer for office and say you want. And that's part of the problem. Right. There's only two ways to fix this. You either spend less or you get more revenue. There's no other way. The shit doesn't fall out of the sky. There is no other way to fix this. You either spend less or you get more revenue. And you can get more revenue with, with, with tweaking, you can get more revenue with having a better economy. You can, you know, Trump thinks he can get a lot of revenue with tariffs. I, I can talk about why that might be misguided or. But what most voters say, because most voters don't really want you to ever say we need to get more revenue. Right. Because that's tax stuff. We don't want to increase taxes. And nobody ever runs for office and wins by saying they're going to do that. So most voters, most people think about we got to cut spending. How many times did you hear on the campaign, Charlotte, we gotta cut spending. Or, you know the Senator Thune who's now the majority leader. Oh, the problem with the debt is the Democrats spending. Okay. The question then becomes, Denver, what do you want to cut? What do you want to cut from our budget? And that gets into you. You talked about it earlier. I, I think people do need to understand the difference very quickly between mandatory and discretionary spending. Mandatory spending simply is spending that is, goes out no matter what every year. Congress would have to change the law, proactively change the law in order to tweak that spending. It goes. If Congress does nothing, which happens a lot, if Congress does nothing, then that money gets doled out. That is Social Security, Medicare, Medicaid, va, Veterans benefits, military retirement, pension, that sort of thing that goes out in the snap, Right, snap, snap.

[Denver Riggleman]

Unemployment insurance.

[Amy McGrath]

Unemployment insurance. That all goes out no matter what. Then there's this piece of the pie called discretionary spending. And that's the piece that everybody. That Congress has to appropriate. You were talking about appropriate earlier. That's what that means. The Congress has to appropriate every year. So Congress has to actually proactively pass a bill that says, yes, this money will go out. And that is split into two main sections. One is your military. About 50% of that is military. And the other half is the rest of the federal government. Okay, so tsa, epa, Department of Energy, faa, CIA, everything else is in the other section. So that is your discretionary spending, and that is right now about 26% of our overall budget. Oh, yeah, only 26%. And then the other 12% is interest. Interest on the debt.

[Denver Riggleman]

Interest on the debt. You know, it's amazing. You know, you talk. I hope people understand. Mandatory spending is something that's, it's, it's very difficult to run on that when you see people, white people are up in arms. Right. The Republicans were going after some of the mandatory spending lines. And this was with the whole fantasy of doge, right. On how to cut the discretionary portion of civilian agencies or DoD agencies, but also the mandatory portion of Social Security, Medicare and Medicaid. And that's what was like blowing my mind. Like, DOGE didn't just have a discretionary right or mandatory spending mandate. Right, Amy? They had a mandate just to go in and wreak havoc with no expertise on how the budget would work or what those flow downs or cascading effects would look like. The other thing, too, that people need to understand in the budget process is it generates from the White House and it has to go through multiple processes. Right. The Senate and the House both have their own take on what their budget resolutions are going to be. And they actually have to come to some sort of, sometimes some sort of agreement. The budget and the House actually do their own separate sort of budget lines. And I know people are like, what? But yeah, that's how our government works. Right. In that way. But what's interesting, it's not a bad thing. It's not a bad thing. By April 15, there has to be a budget vote. And by the way, the budget vote, I think happened April 10th this year. Do you know what the vote was, Amy? 216 to 214 to approve the budget rules. That's how close it was.

[Amy McGrath]

Yeah.

[Denver Riggleman]

So that's pretty interesting. Right. You see this huge budget line. The thing that people need to understand, though, is that when the budget goes right. And they've already voted, there's going to be reconciliation already. Right. So now that they've come to a meeting between the Senate and the budget, there's a bunch of rules and everybody needs to go look at the, the CBA, the Congressional Budget act of 1974. Right. Go and look at that. And you can see how reconciliation works is technical. It's ridiculous. That would be a whole nother deep dive with me and Amy if I went through the reconciliation process, because I've been there and it sucks. Here's what's weird. Here's where people go, what do you know that their earmarks are back. Did you know this, Amy?

[Amy McGrath]

You know, when I was on the Hill as a congressional fellow, earmarks were like a. No, no. So I'm. But I'm not surprised they're back.

[Denver Riggleman]

Here's what they're in the Senate it's called congressionally directed spending.

[Amy McGrath]

Lovely.

[Denver Riggleman]

In the House, it's called community project funding.

[Amy McGrath]

Okay.

[Denver Riggleman]

Okay, so let me tell you what's happening here. So you have the appropriations process. So once the budget outline is actually done, it goes to the Appropriations Committee. At that point, do you know who actually puts the bill on the floor? Amy knows this. I'm just being asking her listeners is Appropriations. They're the ones who actually submit the bill. Now, what is appropriations? Well, you have your budget outline bill, but appropriations is all 535 offices getting lobbied, getting lobbied for things like the defense bill. Do you know people lobby for the defense bill? Yes.

[Amy McGrath]

Stuff that happens in our district.

[Denver Riggleman]

Absolutely, they do. But guess what? They'll say lobby for community project funding and congressionally directed spending. And you're like, well, Dan, if They're earmarks. Why didn't they just call them earmarks? You know why the GOP changed the names? Because they're the ones who ran against earmarks. Guess what benefit most from earmarks? Anybody want to guess theirs? Hello? Their districts, Red districts. So now in the approach process, you have different times to submit your appropriations. So for our office, we had a date with our own way of doing it, right? So lobbyists, the descent of the lobbyists, the lobbyist locusts descend on Congress and they go to every single office for their pet projects. Now you're like, well, Denver, how do they get in there? Well, they go through your staffs. Well, that's great. But how do they get in there? Usually the staff is having dinners with people who want to actually get into your office. So the staff has pre sort of ordered relationships that they've had because they're professional staff and they've lived in the swamp for so long, they already know who you need to go to to manipulate and get the right lobbyists in front of their boss. So the staff is also lobbying you, but they're lobbying you based on sort of a loose vision. But here's what's really weird, folks. Every single office has a different time to actually input their appropriations requests and different formats. So why are you paying so much money to lobbyists from people and companies and everybody like that? Because they have to go into each office, wine and dine, go in with their specific format, the way that they ask for it, and their briefing schedules. This is what's happening during the approbs process.

[Amy McGrath]

Yeah.

[Denver Riggleman]

So I guess what I'm trying to tell people is that White House descendant and House reconciliation, right? Budget voted on says, here's the limits on mandatory and discretionary. Here's the left right boundaries. Some of those left right boundaries can actually be bounced one way or the other. Then you go into the approbs process. The approbs committee or Budget Committee sort of done a little bit approach takes over. They're very powerful. And all the other committee committees have their own lanes in the road, like Ways and Means, Financial Services Committee, Science and Technology, the hasc, heck yeah, The House Armed Services Committee. Then the subcommittee committees that actually feed up, like the hpsi, like the House Intelligence Subcommittee on Intelligence, or you have the Senate Intelligence Committees or the subcommittees on each specific committee. And there's lots of committees. Every subcommittee then has their own hearings for approves and that actually rack and stack.

[Amy McGrath]

There's a lot of hands on it.

[Denver Riggleman]

It's insane. It's insane.

[Amy McGrath]

Remember though, that is only 26%.

[Denver Riggleman]

Correct.

[Amy McGrath]

Of what we spend. That is your discretionary budget. The mandatory stuff is already gone out. As we talk about this, I think it's important for people to understand because I hear, I heard this a lot when I ran for office. We just cut fraud, waste and abuse. Here's the thing, folks. Our entire federal budget, if you take the military out, the budget that you're talking about, the rest of the federal government, your tsa, your faa, your Department of Energy, we could get rid of all of that and we would still have a deficit.

[Denver Riggleman]

Yes, ma'am.

[Amy McGrath]

It's only 13% of our overall spending. And so what Denver, what you're talking about there is really finagling over and some finagling over the military budget as well, but 26%. And so when you think about cutting, if you want to cut stuff, you have to understand that healthcare, Medicaid, Medicare is a big piece of the piece. Now, I lean, I'm center left. I actually believe our country, we are rich enough to be able to pay for our senior citizens to have health care so that they don't have to, because we haven't figured out we have this connection of healthcare and work in this country, which you can debate about it in another day. But Amy McGrath just happens to think that you shouldn't have to be 85 years old and working at McDonald's to get health, health care, okay? That you should be able, we should, as a contract to our senior citizens in the United States of America, they should get health care coverage. That's just, that's just me. Okay? That's Amy. And call me, call me a leftist, all right? I look at Medicaid the same way. And if you look at the numbers with Medicaid, the vast majority of people, human beings on Medicaid are elderly, disabled or children.

[Denver Riggleman]

Children. Oh.

[Amy McGrath]

And so when you think about cutting that, a lot of people like, ah, we got to get rid of Medicaid, really take a step back and look who's on that. So if you're going to cut stuff, we really have to look at that. And then there's Social Security, which, as you know, Denver is about a quarter of our budget. But the thing about it is, is, you know what, everybody pays into Social Security. So why the hell would we cut that? That is stupid. We all pay into it and we're all going to get something out of it. So to me, and it's solvent and I don't think we should be cutting that at all. So it comes down to like, what are you going to cut? And that, that's the fundamental problem. Yeah.

[Denver Riggleman]

I mean, you know what? Nobody has the answer. It's.

[Amy McGrath]

Well, the answer is you can look at the other, the other bar graph, right. You can look at revenue, but we.

[Denver Riggleman]

Don'T look at revenue.

[Amy McGrath]

You know, we cut the corporate tax rates. And that was, everybody loved that. Right. Well, that costs us 500 billion a year. We can tweak certain things. Donald Trump thinks, you know, that tariffs are going to answer the problem. But if you look at the numbers on tariffs, that equals actually about 500 billion. If, if they continue a year in revenues. That is not going to cut it. That's not going to be enough to cut our, to, to fix our deficit. And as we talked about previous, what that does to our economy is, makes it even worse in my mind, her story.

[Denver Riggleman]

Amy, have you ever been on Medicaid?

[Amy McGrath]

No, I have not.

[Denver Riggleman]

I have. So my daughter was born with Medicaid in 1997 when I was an ROTC at University of Virginia. Think about how I got through life, you know.

[Amy McGrath]

Yeah.

[Denver Riggleman]

Military, yeah. Rotc, GI Bill, Medicaid. Those are literally all government programs and government funded.

[Amy McGrath]

Yeah.

[Denver Riggleman]

So it puts me in a weird place, you know, running as a Republican, how do I square that? It's very difficult. And part of the thing is, you know, I was one of the eight, and I'm not bragging because I had a lot of bad votes, but I was one of the eight to vote to keep preexisting conditions. Why? You said something about senior citizens having medical care. Because my district had the most federally funded health centers in the whole Commonwealth of Virginia. Think about that, Amy, there's 11 districts, right? There was, I think we had seven of the 17, everybody voting Republican were actually leaning on the ACA to get health care and the laws codifying pre existing conditions.

[Amy McGrath]

Happens all the time.

[Denver Riggleman]

Right. Just. I hope listeners are listening to this. The thing though is do we have an inordinate amount of mandatory spending? Yes. How do we fix it? So as somebody who is burdened by about four layers of different taxes, which is absolutely debilitating, do you know the taxes that hurt me the worst in the liquor business, not even the AI business. I can, I mean, we'll have that talk another day on tech and stuff like that. In manufacturing, the worst taxes do not come from the federal government. They come from the state.

[Amy McGrath]

State. Yeah. Okay.

[Denver Riggleman]

So I am a hawk when it comes to cutting taxes on specific types of industries. In manufacturing, which tariffs are not by the way, tariffs are awful, are attacks. But on the federal side, I don't think people realize how low the overall tax burden is federally compared to state taxes. Like in Virginia with property tax receipts taxes, business personal property tax, personal property tax, profit transfer tax, state excise tax. I can keep going. That's the issue. Do payroll taxes suck on the federal side? Absolutely. Payroll taxes suck. The thing is, though, is what we have this sort of tax regime from top to bottom that doesn't understand the interlocking effects of stacked taxation. But that is different from the issues that we have on mandatory and discretionary spending when it comes to government specifically. And I don't think politicians actually understand enough to make that distinction when they're talking to their constituents at the federal level. My job is to make sure not only am I following what my constituents want because you voted for me, my job is to make sure that this environment is not only conducive to building business, but it's conducive to actually protecting those who can't protect themselves and to help in some way to provide for most of those who can't provide for themselves. It is a hell of a balance to pick and it's a hell of a balance to do. The thing is, there's no nuance. And I think at some point there has to be a restructuring of our mandatory programs. The thing is, I'm pretty good at this and I am not, I don't have the big enough head by myself to get around how to restructure our debt and deficit issues.

[Amy McGrath]

Yeah, but it takes serious people in office, Denver, that want to fix this. You know, we did this back around the Budget Control act, around the time frame where I was a congressional fellow, where we had the Domenici, Rivlin. They were two economists that came together on different sides of the aisle to try to come up with a plan. We had the Simpson Bowles, if you remember, that was another 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. And it has to be done in a bipartisan way. It cannot be done just by one side because there's too much sacrifice, political sacrifice, that's going to go into this.

[Denver Riggleman]

Do we blame the electorate?

[Amy McGrath]

Tweak some, some, you know, what people call entitlements. I happen to lean a certain way on that. But you remember Social Security was enacted in the 1930s when, you know, your, your life expectancy was much lower than it is today. Medicare and Medicaid were enacted in the 1960s. We do need to look at that, but that should not be the only thing we look at. We also need to look at side, you know, the, the, the tax revenue side because we can't keep doing promising people tax cut after tax cut after tax cut and think that our, our deficit's going to be fixed. It is never going to be fixed. It is never going to be fixed. And the other thing that, that, that I just want to people to understand and maybe this is because I'm a Democrat and I, I just think there's so much misinformation out there. Since Reagan, since President Reagan, every single Republican president has made the deficit worse and every single Democratic president has made the deficit better, meaning less.

[Denver Riggleman]

And people can look at that data.

[Amy McGrath]

I will, you got to look at it. Because it's, yes, it fluctuates, but that has been the reality. So when people say it's only the Republicans or the fiscal conservatives, that is just a bunch of bullshit. Because fiscal conservative doesn't just talk. It doesn't just mean spending. It means what are you doing on the other side? What are you doing on the revenue and spending side? And it's a tough problem. You absolutely have to. We are saddling our children and our grandchildren with debt. And that is my concern because I think it's going to fall off a cliff at some point.

[Denver Riggleman]

Like so here's here, here would be the first thing that I would do. It almost seems like that we need to cut spending and increase revenues. Wow. Okay, that's math. Right? So, okay, how do we do that? Wouldn't it be something if there was something this thing called math too, where you get together and say, hey, what does it look like on the discretionary side and the mandatory side? Well, we have to cut percentage wise from each side or restructure for longer term payouts or pay ins like you said with the age and Amy, can you imagine running on, hey, we're going to increase the Social Security age. People be like, ah, you know, get out of here, you're done. But it has to happen. And like you said though, you're going to need adults in the room. You can't have you saw what the DoD budget submission is? Yeah, yeah, yeah, one trillion.

[Amy McGrath]

One trillion.

[Denver Riggleman]

Yeah, yeah, 101 man.

[Amy McGrath]

He's a strong man.

[Denver Riggleman]

Yeah. Where are they going to get their revenues when they cut the IRS staff?

[Amy McGrath]

I don't know.

[Denver Riggleman]

And they're thinking before the tariffs and before. Right. All this churn in the Stock market. Do you know what the projection was for revenues next year or this year? I think it was 5.2 trillion. I don't know if it was this year. 4.9 trillion. It's a lot. The thing was the CBO put that report out January of 2025. It was. They put it out in January of 2025. I wonder what a revised CBO.

[Amy McGrath]

Yeah, it's good.

[Denver Riggleman]

Would be now. It's going to tank.

[Amy McGrath]

The other thing what people don't understand is when the economy goes, when, when Trump slaps these tariff on and the economy starts tanking, that's less revenue. So all this money he thinks he's going to make on tariffs is basically going to be wiped out because he's not going to fix any spending. And here's the thing. When Republicans, politicians and Trump in particular say, you know, I'm not going to touch entitlements and I'm going to build back our military, we're going to, yeah, bigger military, bigger military budget and I'm going to cut taxes, guys, the math doesn't work. Do you know what? You can do that. You can do all those things, but the deficit is going to balloon and the debt is going to get worse. So that in on no, no planet can you cut taxes, increase the military budget, don't touch entitlements, and fix the national debt. Can't do it. Impossible. Not possible.

[Denver Riggleman]

So, Amy, are you saying we need serious people in office to address serious problems? I mean, that's insane. Let me tell you, my hope is.

[Amy McGrath]

That with this episode, people can understand the budget a little bit better and so that we can elect eventually people who are serious on both sides of the aisle. Because I do think that there are ways to do it. We've asked economists. We can come up with a plan. You talked about tweaking the Social Security age. No, we can't tweak it for people who are 60 years old. No, we can't do that because they're depending on that. But you know what we could do? Maybe if you're, if you're 15 or 20 years old, maybe we could tweak it way into the future so that people have, I don't know, 30 years to plan. You know, things like that can be done.

[Denver Riggleman]

You know what? The hell with your common sense, Amy. I swear. Jesus Christ, what are we doing here? You know, I, here's the thing too, you know, as again, wrapping up an incredible show. I wish you were in office, Amy. And you know, I would almost rather set myself on fire than run again. But it's almost as if when you're looking at how unserious and how irresponsible this administration is specifically today and the fact that a center right and center left person can come to an agreement that cutting spending and increasing revenue have to happen with some kind of restructuring of mandatory programs for long term outcomes based on smart decisions in a common sense way.

[Amy McGrath]

And restructuring of tax revenue.

[Denver Riggleman]

And restructuring of tax revenue. Absolutely it can be done. We're America for God's sakes. But it has to be smart people in the room and not people who believe aliens are in the Bible. And that's where I'm at with it. And I think as we're rolling into this year, here's what I would like our listeners to do. Go look at all the projections and here's what I really want them to do. Look at the spending from the beginning of the Obama years, even with the actual bailout in 2008. Right, Amy, to today, hell, go back further. Amy was right. You can go back and look at the percentage of deficit to debt for each president, which is absolutely mind boggling because it's there for listeners to look at and voters and look at what's happening and what the projections are for the next two years and just have your jaw drop on the deficit spending that we're looking at right now with an administration that said that they were going to control it, it's a lie. But we don't have smart people in government. And I think as people look at the budget process, I absolutely want you to go to videos, look at how the budget process works, breaks it down, especially from the time it drops all the way to the appropriations portion of our budget timeline and the mandatory and deficit spending. But try to look at your sources and where you're getting your information and understand there are people that care like Amy and me. This isn't, we're not talking about weird things like, you know, Donald Trump and his Golden Dome and we can go to all that kind of discretionary spending later. We're having a serious discussion.

[Amy McGrath]

But we will talk about that in the future.

[Denver Riggleman]

Yeah. So you know, so all that because I'd love to talk Golden Dome next week. Let's go because I'm ready. As you know, I got a picture of me and my wife here with the Iron Dome in Israel, which we can put up if Doug would love to do that. So anyway, for us, Amy, I'm gonna leave you the last words and then we can roll and roll and rock instead of rock and roll.

[Amy McGrath]

Well, I just think you're right. We need serious people in government. We don't have serious people in government right now. They're spewing out a bunch of lies. They're spewing out a of falsehoods and numbers, and somehow magically, we're going to fix our deficit and our debt when none of that stuff is true. So we got to have a serious conversation about this, because again, my worry is not only are we settling our kids and grandkids, but at some point, world investors are going to look at our massive debt. And we don't know when that's going to go off the cliff. It's kind of like climate change. We don't know when. When enough is enough. And when that happens, the value of the dollar tanks, our entire economy tanks. I don't know if that's ever going to happen. It may never happen. It could be a thousand years. But it might be right around the corner when the rest of the world looks and says our debt is so big that we don't trust the Americans anymore. That's what I worry.

[Denver Riggleman]

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. And with that, I want to thank all of you for being here with Truth in a Barrel with me and Amy McGrath. The wonderful Amy McGrath. Remember, too, if you're not downloading us on your favorite pod, you're a bit of a loser. And you better go subscribe on YouTube because we look so good on camera and spend a lot of money on these studios. Thank you, Amy McGrath. So cheers. Cheers to everyone. Ah.