The White House Council of Economic Advisers (CEA) released a memo on Friday, detailing the state-level impacts of the government shutdown imposed by congressional Democrats and detailing the projected effects. The effects on Arizonans could be profound if the shutdown is not resolved quickly.
According to the Council of Economic Advisers, Arizona could face a decline of $296 million in Gross State Product each week or approximately $1.3 billion per month, and an increase in unemployment of about 1,000 people. Around 58,000 federal employees, or about 1.8 percent of Arizona’s workforce, could face furlough without pay.
For Arizona seniors and those who receive SSI disability benefits, they will be “likely delayed for those that(who) receive their Social Security benefits by check instead of direct deposit,” per the CEA. In Arizona, approximately 6,200 seniors currently receive their benefits by check.
If the shutdown extends beyond 30 days, the Supplemental Nutrition Assistance Program (SNAP) benefits of 887,000 total enrollees, including 344,000 children, could be impacted.
However, the council warned that families relying on WIC are at greater risk of disruption, saying, “Due to the government shutdown, federal funding for the Women, Infants, and Children (WIC) program stops immediately and becomes reliant on very limited local contingency funding. If the government shutdown is prolonged, those reserves are likely to run out by the end of the first week. In Arizona, there are approximately 153,000 WIC recipients who rely on the program for nutritional support for themselves and their children.. “
Seventy-six million dollars in small business loans, such as those made available to the victims of the Dragon Bravo and White Sage Fires, could also be delayed. Federal contract spending is expected to lose approximately $560 million should the shutdown persist for one month. Overall, the council warns that Arizona could lose $15 billion in GDP each week the government is shut down — a crisis that will ripple across every state.
Kush Desai, a White House Spokesperson, said in a statement emailed to AZ Free News, “President Trump and Republicans remain committed to ensuring families receive the support they deserve. Sadly, Democrats have chosen to shut down the federal government for political purposes…The Democrats’ shutdown is hurting the American people and letting millions of Americans’ livelihoods hang in the balance. Democrats need to vote on the clean, bipartisan funding extension.”
In a press release issued Thursday, Arizona Congressman Abe Hamadeh (R-AZ08) explained that Congressional Democrats are ultimately responsible for this shutdown. He stated, “This nonpartisan funding bill, passed 13 times under Biden, was rejected by Democrats solely due to their opposition to the new president. Their shutdown halts critical services like benefits for Veterans, military pay, and national security programs.”
Hamadeh added, “As the White House points out, the Democrats proposal would require Medicaid to pay more for emergency care provided to illegal aliens than it does for American patients who are disabled, elderly, or children.’ That is unacceptable. We can no longer afford to fund the results of the Biden Administration’s broken border scheme. Americans deserve a functioning government, and House Republicans delivered by voting to keep it open. Yet, Democrats voted to shut it down, prioritizing free healthcare for illegal immigrants over American citizens’ needs.”
President Donald Trump’s One Big Beautiful Bill, supported by all Arizona’s Republican representatives, was signed on Friday, July 4th. The bill provides the largest tax relief in American history.
I’m on my way to vote for President Donald Trump’s One Big, Beautiful Bill.
Today’s wins include: 1. Tax cuts for everyday Americans 2. Funding for border security 3. Reductions in the Green New Scam
Among the bill’s most impactful provisions are no tax on tips, no tax on overtime, and no tax on Social Security benefits.
These policies are designed to put more money back into the pockets of the hard-working American people.
The “No Tax on Tips” provision offers a new deduction of up to $25,000 for workers in tipped industries. Whether tips are received in cash, by charge, or through tip-sharing arrangements, employees will keep more of their hard-earned income.
This measure is expected to save tipped workers nearly $2,000 annually, providing direct financial relief to millions of Americans in these critical industries.
The bill also eliminates taxes on overtime pay. This guarantees that workers who put in extra hours are rewarded greatly with bigger paychecks. This, as well, could also save Americans on average $2,000 a year.
According to a new study from the Council of Economic Advisers, 88% (48 million) of American seniors receiving Social Security will pay no taxes on their Social Security income.
For a single senior receiving the average retirement of $24,000 annually, deductions will exceed their taxable Social Security income. Similarly, married seniors with a combined Social Security income of $48,000 will also see their deductions surpass taxable income.
The One Big Beautiful Bill also delivers an average 15% tax cut for Americans earning between $15,000 and $80,000, significantly boosting take-home pay.
For a typical family with two children, this translates to an increase of up to $10,900 per year in after-tax income. The bill also boosts the standard tax deduction, raising it to $23,625 for married couples and $15,750 for singles, a benefit utilized by 91% of taxpayers.
According to the Council of Economic Advisers, the One Big Beautiful Bill will drive significant growth and fiscal stability. This includes:
Real wages increasing by up to $7,200 per year
Real Investment growing by as much as 10%
Creation of protection of 7 million jobs
Deficit reduction of up to $11.1 trillion, driven by $5.2 trillion from economic growth, $2.8 trillion from tariff revenue, $1.6 trillion from discretionary spending cuts, and $1.5 trillion from interest savings.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Like a cruise ship steaming toward an iceberg, America’s economy is headed for disaster.
The federal government reports an interest-bearing debt of $37 trillion. However, the actual unfunded obligations of the government, according to the Medicare and Social Security Trustees’ reports, is an unfathomable $158.6 trillion.
Yet the band plays on. In the latest game of chicken to avoid the dreaded but largely imaginary “government shut down,” Democrats stood fast on the theory that their electoral success depends on shipping the maximum number of dollars out the door. Republicans once again proved an inadequate bulwark. Those taking a principled stand against business as usual were denominated “far-right obstructionists” and run over.
The current Republican plan combines a $4.5 trillion tax cut with doubtful spending reductions of $2 trillion, a plan the Congressional Budget Office (CBO) projects will eventually raise the interest-bearing debt to $60 trillion. Reminder: the Rs are the cost-cutting party.
Trump’s deficit-busting credentials are suspect. During his first term, he added debt at twice the annual rate than Barack Obama did. Nevertheless, he has unleashed a dramatic program of mass firings, contract canceling, and agency reduction/elimination.
Serious cost cutters know that the most effective strategy is to cut where the fiscal impact is high relative to the resistance produced. The DOGE strategy is the exact opposite, already producing highly publicized and resented cuts with no possibility, even if fully implemented, of resolving our debt crisis.
The elimination of all federal civilian employees, no matter how useless and overpaid many are, would save only 3% of the federal budget. To save money, you have to go where the money is. By far the largest “bucket” of federal spending is transfer payments, which are $3.19 trillion of the $6.7 trillion total budget in 2023.
Federal subsidies to states, including Medicaid, cost $1.15 trillion, while debt interest of $.9 trillion is not available for cutting. Purchases of supplies and salaries, which fund the military and all other governmental functions, cost a combined $1.4 trillion, yet provide relatively scant opportunity for significant reductions.
Meanwhile, the two parties dare each other to actually cut transfer payments and “push granny over the cliff.” Trump’s response is to adamantly repeat that he will never in any way “cut Social Security, Medicare or Medicaid benefits.”
This war of words has the unfortunate effect of handcuffing those legitimately trying to plan for the total depletion of the Social Security and Medicare trust funds, scheduled to occur within the decade. It also rules out some of the non-draconian solutions available like work requirements for the able-bodied and gradually raising the retirement age.
When and if we get serious about cost-cutting and generational fraud, a good place to start would be Medicaid, the most abused and inefficient welfare program. Spending on Medicaid has grown an inflation-adjusted 671% since 1990. In fact, as Senator Phil Graham recently pointed out in the Wall Street Journal, the real purchasing power of total government transfer payments is 20 times greater than when the War on Poverty began in 1990, while the official poverty rate remains at 11.6%.
How can that be? Gramm provides the key insight. Eligibility standards for means-tested programs including Medicaid are based on the Census Bureau’s calculations. But the Census vastly overstates the extent of poverty because it doesn’t count as income 88% of the transfer payments, including food stamps, refundable tax credits, and Medicaid itself. This incoherent bias in calculating income eligibility has led to massive waste, far exceeding DOGE’s projected savings.
Interestingly, the CBO in January developed a new metric for determining “poverty” in the traditional sense of not having enough resources to meet basic needs. When transfer payments were deemed income, which they obviously are, the actual poverty rate fell to 0.8%.
This is an opportunity to save substantial sums without harming those actually poor. $1.48 trillion in welfare benefits annually go to families not actually qualifying as poor, using the CBO’s calculation of counting transfer payments as income. Simply using the CBO methodology, combined with work requirements and limiting welfare benefits to those truly in need, would generate meaningful savings if we have the political courage to do so.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
One of, if not the, highlights of President Donald Trump’s first months in office has been the Department of Government Efficiency (DOGE), headed by entrepreneur (and the world’s richest man) Elon Musk. Under Musk’s leadership, DOGE has not just exposed wasteful spending— but worked to reduce spending by eliminating entire agencies and even cabinet departments.
For example, DOGE pulled back the curtain on the United States Agency for International Development (USAID). Before DOGE exposed it, most Americans thought of USAID (if they thought of it at all) as an agency that provided humanitarian aid and development assistance to impoverished people in other countries. DOGE revealed that USAID’s humanitarian work was a cover for their true mission: making political and cultural change overseas. This is why USAID has spent millions on absurd “development” projects like transgender plays in Colombia, DEI schemes in Serbia and electric car subsidies in Vietnam.
Eliminating USAID would not mean the end of overseas development and humanitarian aid. It would mean that the aid would come from private charities. These charities can do a better job of providing aid than a government bureaucracy. As outrageous as USAID’s spending is, it is a drop in the bucket compared to the Pentagon’s over $800 billion (and on track to exceed $2 trillion by 2033) budget.
The “defense” budget is the third largest item in the federal budget, behind Social Security and Medicare. Few politicians will risk the wrath of senior citizens by voting to make any changes to these programs unless the changes are phased in such a way as to not affect those currently on, or close to, relying on the programs. Thus, any serious plan to reduce spending and debt must cut the bloated “defense” budget. Savings from reductions in military spending can be used to help support those dependent on federal programs as Congress unwinds the welfare state. Cutting military spending would be politically popular as most polls show a majority of Americans— including Republicans—support reducing America’s military commitments.
The poster child for wasteful Pentagon spending, which is thankfully already in Elon Musk’s crosshairs, is the F-35 —a $1.7 trillion disaster of delays, breakdowns and runaway costs. The plane, the most expensive military program ever, often sits grounded. The F-35 may be the most obvious example of wasteful Pentagon spending, but it is hardly alone. After all, this is the agency that brought us the $500 toilet seat. Shutting down boondoggles like the F-35 could provide revenue to help pay down the debt and protect those currently dependent on federal programs. It could also help ensure the forthcoming tax bill does not further increase the deficit.
DOGE is not the first effort to identify and eliminate wasteful spending. President Ronald Reagan had the Grace Commission, a sort of DOGE 1.0 that unearthed billions in waste—from the Department of Energy to the IRS. Their findings were buried by entrenched interests and a cowardly Congress. The lesson of the Grace Commission is that reducing even the most obvious wasteful spending requires the courage to stand up to the entrenched interests in both parties that benefit from the current system.
Trump and Musk may have the necessary convictions to make serious changes in the ways Washington works. However, they need to be prepared for the swamp to fight back. Democrats and their allies are already waging war against DOGE. To them, trying to identify and eliminate wasteful spending or even asking federal employees what they actually do is an assault on democracy. Most Democrats will join hawkish Republicans in seeking to protect the Pentagon’s budget. It would not be surprising if Congress’s bipartisan military-industrial complex caucus smeared those advocating cuts in the bloated military budget as “Putin’s puppets.”
The federal debt is growing by approximately $1 trillion every three months. To put that in perspective, consider that the federal debt did not reach the $1 trillion mark until 1981. Unless action is taken soon to reduce spending, pay down the federal debt and roll back the welfare-warfare state—America will face a serious economic crisis. Therefore, it is important that everyone who understands the stakes do what they can to support Trump and Musk’s efforts.
Congressman Abraham Hamadeh (R-AZ8) has joined Arizona Reps. Andy Biggs (R-AZ5) and Paul Gosar (R-AZ9) in co-sponsoring the Senior Citizens Tax Elimination Act, H.R. 1040, which was introduced earlier this month by Rep. Thomas Massie (R-KY). If enacted, the bill would eliminate the current regime of de facto double taxation on Social Security benefits.
In a press release, Hamadeh explained his support for the bill saying, “Amid all of the FAKE news about Social Security benefits and the Democrats’ fear-mongering weaponization of it, I am glad to bring some REAL news to the residents of Arizona’s 8th Congressional District. Help is on the way.”
Amid all of the FAKE news about Social Security benefits & the Democrats' fear-mongering weaponization of it, Congressman Hamadeh is glad to bring some REAL news to the residents of Arizona's 8th Congressional District.
— Office of Congressman Abe Hamadeh (@RepAbeHamadeh) February 21, 2025
He added, “’Prior to 1984, Social Security benefits were exempt from the federal income tax. Congress then enacted legislation to tax a portion of those benefits, with the share gradually increasing as a person’s income rose above a specified income threshold,’ noted a Congressional Research Service report. That is simply unfair, and unnecessary.”
Massie laid out the bill’s impact in his own release saying, “Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns. This is simply a way for Congress to obtain more revenue for the federal government at the expense of seniors who have already paid into Social Security. My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.”
As Hamadeh’s office notes, Senators Tommy Tuberville (R-AL) and Tim Sheehy (R-MT) have already introduced corresponding legislation in the U.S. Senate with Tuberville recently telling Newsmax, “In a day and age where the cost of living has skyrocketed, our seniors should not experience a second tax on their Social Security when they’ve already paid income tax on their paychecks.”
The Senior Citizens Tax Elimination Act was first introduced by former Congressman Ron Paul and has been subsequently introduced by Massie every year since he took office in 2012.
Hamadeh called back to the introduction of the bill by Paul in a statement, “It is my honor – one of the highest honors – to support a bill first introduced by Congressman Ron Paul. The wisdom of the fiscal battles he waged over the years is now becoming evident to everyone thanks to President Donald Trump and his Department of Government Efficiency (DOGE). My hope is that as DOGE dives deeper into our bloated and broken bureaucracies, we will find many opportunities to reduce taxes on hard-working Americans.”
“In fact, my colleagues and I are committed to delivering a ‘big, beautiful bill’ that will deliver tax relief to all taxpaying Americans,” said Congressman Hamadeh. “The Senior Citizens Tax Elimination Act delivers immediate relief to those who need it most — our seniors who built this country.”
