Budget Battles & Conversations With China
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Wow, that's amazing.

One of the plagues. So loud and constant. Ribbit, ribbit. Is it just like that all day? I don't know. Hey there, it's the NPR Politics Podcast. I'm Miles Parks. I cover voting. I'm Barbara Sprint. I cover Congress. And I'm Mara Liason, Senior National Political Correspondent.

And today on the show, President Trump's spending package, the one he calls the Big Beautiful Bill. But Mara, I will say it is really hard to talk about this bill right now without also talking about Elon Musk and this giant feud, breakup, whatever you want to call it. It certainly did. You've got the Big Beautiful Bill, which is what Trump calls this. And then you've got the Big Beautiful Breakup between him and Elon Musk. And even before yesterday, when things got really personal,

Elon Musk was criticizing the bill. He said it was a disgusting abomination. No Republican should vote for it. And remember, Musk was the guy who came into the Trump administration to carry out a decades-old Republican goal, which is to

radically downsize the federal bureaucracy and lay off federal workers, and he did. But this bill, he thinks, is the absolute opposite. Now, the big question now is...

Does he have an effect on Republicans voting for the bill? Probably not. But then the question is, can he help shape public opinion about it even after it passes if it does? Already we know that majorities of voters disapprove of this bill. He has a very big megaphone on social media, an X.

Will he spend money and time trying to criticize this bill after it passes, which could cause political problems for Republicans? I mean, we're going to talk about this bill in detail a little bit more, but just focusing on the Musk-Trump dynamic a little bit, Barbara, I do have to say these are two people who have huge personalities. I guess I wonder, was part of this sort of breakup that we've seen this week kind of inevitable? I think so. I think, you know...

That was, I think, largely like the public sentiment is thinking like, when is this going to end? This kind of bromance, if you will. And even on the Hill, like candidly, there was sort of like this chatter of like, how long will this last? They were, you know, thick as thieves for decades.

What seemed at the time like it would last a little longer. I think some people are surprised that its tenure was cut short. But I do think and I think the way in which it has sort of devolved so quickly and so precariously is a little surprising. But I do think that everyone sort of expected that this wouldn't be one for the books. Well, so the feud started.

as we mentioned, kind of began with this conflict over the fact that this bill that includes many of President Trump's priorities is expected to add trillions to the federal deficit. And there was an official estimate actually tied to the bill, right, Barbara? What did the Congressional Budget Office find out? That's right. The big number from this week was $2.4 trillion. That's what they expect would be added to the deficit over the course of a decade under this bill.

And this runs counter to what the messaging from a lot of Republicans on the Hill had been after the House passed this bill. They maintained that extending those 2017 tax cuts, of course, under the first Trump administration, which this bill would do, will be offset in their view by other spending cuts and other economic growth that they're predicting.

And then another big number that's been floating around that people may have heard is 11 million. The CBO estimates that 11 million people will lose health insurance under this type of bill, largely because of cuts to Medicaid. Well, so you've also been reporting a lot on kind of bigger picture what the CBO is and how it does its work. What can you tell us about how an analysis like this comes together? Yeah.

With a lot of time and a lot of care. If you were listening to Republican lawmakers talk about the CBO the last week or two, you would probably walk away thinking, OK, this is some sort of like partisan agency that's pushing a particular agenda. That is not the case. The CBO was established in the 70s mainly to analyze budget implications of proposed bills from Congress.

And what's interesting is up until that point, the scorekeeping around the budgetary process had been done under the executive branch. And so the CBO acts as sort of a congressional counterbalance to what is now the Office of Management and Budget under the executive branch. The CBO scores about 1,000 bills each year. It's only about 275 staffers. So it's a really small agency.

And it's nonpartisan, despite what people may say on both sides of the aisle. You know, the CBO cost estimates are just advisory. They don't make any policy recommendations, which makes them unique. And it's up to lawmakers to decide whether or not they want to do anything with the information that they receive.

An expert that I spoke with actually compared it to the civil service, the idea that, you know, the staff largely will stay. It's like it's budget experts, it's demographers, it's economists, and they largely stay like regardless of who's in charge. Well, Mara, so you've got this big CBO announcement coming out this week. And then you also, as you mentioned, have one of the world's richest people kind of railing against this bill over and over again on his own social media platform.

What are we thinking in terms of the chances that this bill actually passes Congress, considering just how tight the margins are for Republicans? I think that the bill will probably pass. This is one of those things where it's one of those make or break votes. We see this in almost every administration. And the message to Republicans is if you don't pass this, this will be the utter failure of the Trump administration.

So I think it will pass. The question is, after it passes, will it become an albatross around the neck of Republicans the way the last Trump tax cut bill did? People thought it helped the rich and not the middle class. You've got all sorts of economists saying it's really dangerous to increase the debt this much at a time when you're not fighting a war or dealing with a pandemic.

And this could lead to a fiscal crisis. So the only entity that I know of who is saying this bill will reduce the deficit and increase growth is the White House itself. I mean, how exactly are they justifying basically having a different perspective on whether this bill is going to add to the debt? Well,

Well, I think that there is a lot of messaging that the CBO is not to be trusted. Basically, the Trump administration says any entity, any institution that disagrees with them is not to be trusted. They try to undermine the credibility of any institution, whether it's the CBO, whether it's a university, whether it's a big nonprofit. I mean, this is just basically their go-to playbook for this.

Like I said, I don't think that this will change the politics of this. The politics of this for Republicans is they've got to pass this. This is Trump's number one and maybe his only legislative vehicle. But the question is, afterwards, does it become a problem for Republicans? I mean, Barbara, with your knowledge about the CBO, I mean, is criticism or this idea of trying to paint the CBO analysis as partisan or something or not to be trusted, is that new? It is not new. Yeah.

You know, I spoke with someone who actually was director of the CBO from 2003 to 2005, Douglas Holtz-Akin. And the thing that he said is different this time, which I think is interesting, is that typically the White House will leave the criticizing to their congressional counterparts.

And this time, the White House press secretary has been talking about the CBO being shoddy. So that element, I think, is new. Members will sort of say, like, look, when the numbers that the CBO puts out work in our favor, awesome. And if not, then we move to the blame game. And this kind of tracks with something that Holtz-Akin said as well, which is when he became director of the CBO, he sort of discovered that there was an unspoken function of the agency, which is to take the blame from Congress. Congress gets to hide behind you.

And they get to vent at you. Like sometimes they're just very frustrated and they scream at the CBO director. And that's just a role you play. It's not personal. And it's just frustration. And they have hard jobs and there's a lot of stress. And I just said, okay, well, that's the way that works. Sometimes you hear them say, oh, we can't do this because of the CBO score. No, they just don't want to do it.

It's a very Zen outlook, right? It's Washington. All right. Well, Barbara, go take a break. We're going to bring you back for Can't Let It Go. Sounds good.

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And we're back. And NPR correspondent Emily Fang is with us now. Hi, Emily. Hey, Miles. So you are here to talk China with us. President Trump and Chinese President Xi Jinping spoke on the phone yesterday, which was their first phone call since this big tariff war began this spring. What do we know about what they talked about? They talked mostly about trade. It was 90 minutes long. China says that they brought up Taiwan, which is this democratic island that China wants to control.

And they also both said they invited each other to visit each other's countries. But they resolved to meet again for trade talks and both said that they really wanted good relations between the two countries. That being said, there are big outstanding issues there.

And a phone call is not going to paper over that. Talk me through what some of those big outstanding issues are. So this goes back all the way to Trump's first administration, where he really wanted what he was calling a phase two trade deal. He wanted China to change trade.

its political system, basically. He wanted a level playing ground for American businesses in China. China walls off certain industries that it considers critical and doesn't allow foreign businesses to invest or compete in them. He wanted protections against China stealing American IP. He wanted China to buy more U.S. goods. And then since then, since he's come back to office, in addition to all that,

The U.S. has been trying to wall off its critical semiconductor technology from hardware to software to China. And now this thing called rare earth minerals has been in the headlines, I'm sure you've seen. So those are all the big structural issues, some of which are integral to how China runs its economy.

still semi-planned centralized economy. And these are things that China has not really compromised on. So you mentioned rare earth minerals. Can you just remind us what those are and why they're important? They're a variety of minerals

elements that are usually quite common, actually. They're just expensive and difficult and dirty to refine. They require things like acids and really nasty chemicals. And China has dominated the world supply of refining these rare earth minerals. And we need them because we use them in small amounts in basically every technological device we use, whether it's your smartphone or magnets that go into a fighter jet.

Did China do those things that Trump wanted them to do in his first term? No. Did that agreement ever actually get actualized? No. So they reached what's called a phase one trade deal where China promised to buy China

hundreds of billions of dollars of more stuff from the U.S., which didn't really happen because the COVID pandemic started. And then they started negotiations for this phase two deal about all these issues I just talked about, and that never came to fruition. I mean, Mara, so much is made of how Trump negotiates his style. I mean, it's a big part of what he ran on in 2024. How do you think he feels these negotiations have gone this year in his second term? Yeah.

Well, he's frustrated. He's actually posted something that said China's very tough to deal with and negotiate with. Don't forget, this isn't just something he ran on. This is the core of his political persona and brand, the art of the deal. He wrote that book and he has...

said over and over again, usually he describes these potential trade negotiations as easy peasy. If I can just have a phone call with Xi, we can get everything straightened out. The other day, he actually told reporters, he said, we straightened it out. And we got, and he posted, we had a positive conclusion. Well, the conclusion seems to be that the talks will resume, that Scott Besant, the Treasury Secretary, is going to restart talks with Chinese officials.

But Trump hasn't succeeded. He makes maximalist demands, puts gigantic tariffs on China. He posts, do not retaliate. China does retaliate. And then Trump backs down. He kind of negotiates with himself. He backs down without getting any concessions. So that seems to be his pattern with these trade negotiations with China. He's not getting anywhere. And

And he keeps on changing the terms. And he also is not clear about exactly what he wants. I mean, if he believes the tariffs will pay off the national debt and make America rich, well, then he has to keep these gigantically high tariffs on. Are they a negotiating tool? That's what it sometimes seems like because he keeps on changing them, even if he gets no concessions from the other side. I mean, Emily, how are these negotiations out of this phone call yesterday? How is this all playing out in China?

It was front page news. At the same time, I think most people greeted it with a shrug. China is going to continue the kinds of industrial and technological policies that have made it a serious competitor economically, technologically, in the semiconductor space. And they've realized that rare earths, which China has a near monopoly on refining, not mining. We have them in the U.S. We just don't have serious capacity to refine them, to make them into the components that go into our cars and fighter jets and iPhones anymore.

They have a near monopoly on this, and they figured out that this, cutting that off to the U.S. and the EU is a serious choke point. And the U.S. sits up and listens when China cuts that off. Wow. Emily, is getting the processing capacity here, you say we already have the rare earths in the ground, but we don't process them. China doesn't.

does almost all of that. Is that the same kind of a hurdle as bringing manufacturing back to the U.S.? Is it really, really hard to do? Yes, it's dirty. It's energy intensive. And we haven't had a commercial incentive to do it because China did it so cheaply. There was never a market demand to bring it back. And we buy very small quantities, relatively speaking, of rare earths.

Not a lot goes into, say, a fighter jet, maybe a couple hundred pounds. So if you listen to the market, there's never been a need, despite national security analysts saying we need this stuff in the U.S., there's never been a market need to bring it to the U.S. I mean, what is the end goal here? Because...

The entire basically the entire global economy is kind of sitting up and watching every single time these leaders talk, every time there's movement on tariffs, because so much of everything runs through either China or U.S. or both. Do we have any sense, I guess, of how this all finishes or what would make President Trump happy here? I don't. And I think that's what China is also struggling with. What kind of concessions can we give Trump?

that he'd be happy with. At first, it was about fentanyl. China said it was going to crack down more on fentanyl. And in fact, they had done a lot already. Is it about investing in the U.S. and bring manufacturing here? That's kind of hard for Chinese companies to do now because of national security restrictions and a lot of tech fields.

Is it about buying more American goods? Maybe that'll be something that'll come up in the second round of talks. Mara, what else are you watching as this kind of moves forward? I'm watching to see how the president kind of gets himself out of the hole he's put himself in. He raised expectations for his abilities to make trade deals with lots of countries, but particularly China. He has backed down. He's changed the terms. He's sent confusing signals.

And I don't know if he's looking for some kind of small concession he can claim as a big victory, but I don't really understand how he's going to force China, which is racing ahead of the U.S. and advanced manufacturing and all sorts of other fields, to do what he wants, especially because we're still not clear what he wants.

And so is the next step to watch, Emily, is these trade talks? When are those expected and what are we expecting to come out of those? For China, don't expect their behavior to change that much. What they're looking to do is minimize the threat from the U.S., try to keep tariff rates low. But they've been saying for the last six years that they want self-reliance and things like supply chains, intermediate components, technology, etc.

And I think the fact that Trump has been very, very willing to all of a sudden ramp up tariffs to 145 percent at their base level only reinforces their conviction that they need to double down on building their own economic resilience. All right. NPR's Emily Fang, thank you so much for joining us. Thanks, Miles. OK, one more break and then can't let it go. Decades ago, Brazilian women made a discovery. They could have an abortion without a doctor thanks to a tiny pill.

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On the Planet Money podcast, you've seen them, those labels that say made in China or made in France. But what do they really mean? The reaction was, it can't possibly work like that. That can't possibly be right. We dig into the delightfully convoluted rules behind country of origin, what makes, say, a Chinese product Chinese, and how companies facing tariffs are getting creative. From Planet Money on NPR, wherever you get your podcasts.

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And we're back. And so is Barbara Sprunt. Hi, Barbara. Hey. So it's time for Can't Let It Go, the part of the show where we talk about the things from the week that we just cannot let go of, politics or otherwise. Barbara, since we just got you back, do you want to start us off? I would love to. And it's an otherwise today. Okay. Okay. Has anyone been watching the French Open, Roland Garros? No, I have not.

I know what it is. I know it exists. There was a really sweet and affirming moment during a match with Carlos Alcaraz of Spain and Ben Shelton of the United States. In the second set, Alcaraz was returning a shot and it was out of reach. So he sort of like flung his racket and

And it made contact with the ball, which in itself is like pretty impressive. And it sent it over the net. And so he was initially awarded a point. And then you sort of see him like go over to the chair umpire and like wag his finger. And he's like, no, that's not my point. Because he wasn't holding the racket when it made contact with the ball, which is a no-no.

So, you know, and it came at a critical point in the set. And so he ended up not getting that point. He ended up winning the match overall. But it was just such a nice, lovely moment of sportsmanship. He said afterwards that he would have felt guilty if he didn't say anything. So I just think we need more Alcaraz energy in the world. So integrity still exists, at least historically.

On the tennis court. We're happy to hear it. I feel like I'm going to show this to all the guys I play pickup basketball with because there's a lot of people out there who even out there on a game that doesn't matter, I see some lying. I'm going to say it right now, Barbara. I see people know when the ball went off of them and they'll be like, no, it's off you, it's off you. And it's like...

What are we doing here, guys? I know. Be a Carlos. Play with integrity, right? Okay. So what about you, buddy? What's your can't let it go? So my can't let it go is, did you guys know that this is the 50th anniversary of the movie Jaws coming out? No, I didn't know that. This year. I know that. Amara knows that. You've been waiting. Well, how do you feel about Jaws before we start, Amara? I know that because my first job in journalism was on the Vineyard Gazette.

And that was many, many years ago, over 40 years ago. And actually, it was right after Jaws. And I know people who worked on that movie built things for it.

including the little wooden shark fin that one of the kids' extras played with in the water. Oh, my gosh. How did I not know you worked at the Vineyard Gazette, Mara? I have a Vineyard Gazette hat from when I visited years ago. It was a great little newspaper, and that's where I started. That is so cool. I lived there year-round. Wow. One of the few. One of the few. Well, my Can't Let It Go is about Jaws, but then also specifically kind of a sad one, but...

But maybe what was interesting to me, I didn't know it before. So post-Jaws, I don't know if you guys know that there's been a pretty big decimation of the shark population worldwide. And there has been some...

some crediting to the movie and the book because... Well, just because a lot of people started hunting for sharks after the fact, for sport, especially on the East Coast of the United States. And one thing that was interesting to me that kind of made me sad is I think it's like a perfect movie also. I think it's endlessly rewatchable. And Steven Spielberg was actually asked about this on BBC. And he said, one of the things I still fear is not to get eaten by a shark, but to be

But that sharks are somehow still mad at me for the crazy sport fisherman that happened after 1975. I truly, and to this day, regret the decimation of the shark population because of the book and the film. And I don't know, that just like to have made such a perfect movie and then still for 50 years be holding this regret about how it's played out in the world more broadly. I don't know. That kind of shook me a little bit. I mean...

Is he heartened at all by the fact that isn't a lot of shark decimation also due to climate change? I mean, there's a lot of things that go into it. But I do think the fact that people's fears... I don't know that people were like...

naturally is scared of sharks generally, too, before Jaws. And now there is kind of like a cultural fear. It's also kind of a windabout thing, right? Because as climate change got worse, sharks end up on beaches more. So people are actually more afraid of them because they see them more often now. That's true. That's true. I just want to just say, Stephen, you know, you can...

I think you've earned it. We forgive you, I guess, as a society, right? I think you've done a lot for a lot of creatures, big and small. Including dinosaurs. All right, Mara, what can't you let go of?

My Can't Let It Go this week is about actor Ralph Macchio. He was the Karate Kid, and he revealed that he keeps souvenirs from movie sets that he's been on, or he pilfers things. And in this case, he kept a can of tuna used in the famous shoplifting scene of My Cousin Vinny.

And this is a very personal thing for me. There are two reasons why this "Can't Let It Go" really resonated with me. Number one, I have seen "My Cousin Vinny" about 10 times. And when you're married to a lawyer, and my late husband loved the movie, and we saw it over and over again, and I have another personal, weird personal connection to this, which is I have a lot of canned goods in my house that have expired.

This can of tuna is 33 years old. That's what Ralph Macchio said. And I have things that are, I don't know about 33 years old, but my kids just go nuts when they see this stuff. But I believe that just because the date is expired, it doesn't mean that the tuna fish is bad.

I mean, a can tent, it feels pretty secure, you know? Like, no air is getting in there. I guess, what is the statute of limitations on that, though, Marla? Would you eat a 33-year-old? That is an excellent question, and I don't know the answer to that. I'm asking you personally. Would you eat a 33-year-old can of tuna? But cans of food are in fallout shelters, you know? I mean—

I don't know. I think cans have a pretty long lifespan. It sounds like, yes. It sounds like tomorrow would eat it. I wonder, does it like – can peaches feel like one thing and canned tuna feels potentially like another thing? I haven't really thought this through. But when I read about this, I thought, boy –

I like this. I can't let go of this. The movie, which I've seen a million times, and then the expired can. You can't let go of that can. Yeah, right. All right. Well, that's all for today. Our executive producer is Mathoni Maturi. Casey Morrell edits the podcast. Our producer is Bria Suggs. Special thanks to Lexi Schipittel and Dana Farrington.

I'm Miles Parks. I cover voting. I'm Barbara Sprint. I cover Congress. And I'm Mara Liason, Senior National Political Correspondent. And thank you for listening to the NPR Politics Podcast.

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