Donald Trump Dismisses Mike Waltz as National Security Adviser
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From the opinion pages of The Wall Street Journal, this is Potomac Watch.

Contrary to reports of its demise, the U.S. Congress still exists and it may actually matter what happens this year as it passes or tries to pass legislation in the first year of the Trump administration. The House is moving various planks of its giant tax and spending bill and some of the early signs, believe it or not, are promising for government reform that could be more lasting than Elon Musk's Doge project.

We shall see, of course. Plus, Donald Trump sacks National Security Council advisor Mike Waltz and his deputy Alex Wong. What does that mean for Trump foreign policy? Those are our subjects for today here on Potomac Watch. I'm Paul as you go, the editor of the Wall Street Journal Opinion Pages. This is our daily podcast. I'm here today with my colleagues, Kim Strassel-Ross,

Kate Batchelder-Odell. So many of these planks are moving. As I said, let's listen to Mike Johnson, the speaker, talk about how things are going. We have seven committees marking up components of the big, beautiful bill this week. We have four others next week that

Third week that we return, the Budget Committee will merge all that together into the one big, beautiful bill, and you will see the results. We are going to preserve the programs. We're not gutting Medicaid. We're going to reduce fraud, waste, and abuse, which every single American should be applauding. The Democrats should as well, but they're not allowing themselves to do it.

And we're going to make sure it works better. We're going to preserve the program, not cut it. It's exactly the opposite of what the Democrats are saying. So the states will adjust to all these things and we will make sure that the people who need these benefits and rely upon them are protected. OK, that's the whole thing. I love the fact that the speaker now says big, beautiful bill so fast that it's almost like a single word. It's one word. Right.

So, Kim, what's your overall impression so far of the things that the committees have rolled out to date? Well, look, I do think the speed is important. And there had been some talk about how long this was going to take. The Senate at this point is the one that's going to drag behind a little bit. But the House is still aiming toward having things done faster.

by June, which I think is really important because in my mind, the sooner that this gets passed and the business community in particular, investors understand that they are not going to be facing a $4.5 trillion tax cut, that could be a counterweight to

to everything that we've been seeing with tariffs. Not that it's going to entirely negate it. Don't worry, I wasn't saying that, Paul. But I think it would be a very positive sign. They're going to avoid a tax increase. Tax increase. Yes, they're going to avoid a tax increase. And I think that certainty would be incredibly important right now for jittery markets and all the uncertainty we have. We're at a very crucial moment, though, where

The Republicans have set up some goals for what they'd like to cut a floor in the House of $1.5 trillion over 10 years. Personally, I think that's a bit paltry, but they are still struggling to get there. And there's some really big programs on the table that they are now negotiating how they can get some savings from Medicaid and food stamps in particular. And negotiations are going on

today and tomorrow. In fact, House Speaker and other GOP leaders were at the White House this morning having a discussion trying to make sure everybody's on the same page. But remember, they've got minuscule majorities in the House. They basically have to have unanimity to get this done. And that is proving a hard task. Lots of disagreements. Right. But let's hit a couple of the good notes that are coming out so far. Kate, you've written about the defense portion of this.

big $150 billion one-time increase in defense. That would be in addition to the normal defense spending bill, I gather, and that would make very big investments in some of the real shortfalls in the American military on ammunition, the Navy, space defense, among other things. So give us at least a couple of the highlights. Well, yeah, so about $150 billion, which is a significant increase for the Pentagon in about an $880 billion annual budget. It

It sounds like a lot of money, I understand, and it is, but we're short a number of crucial things. You mentioned munitions. I mean, we've been talking about between Ukraine and the Red Sea, just how we don't have enough cruise missiles, enough 155 ammunition that we've been given to Ukraine and that they've been using at voracious rates in their war against Russia. So the bill includes about $20 billion for munitions alone, which will have, I think, a

profound deterrent effect on the world to understand that the United States, for instance, will not run out of long range anti-ship missiles in the Pacific if there were ever to be a scuffle there over the Philippines or Taiwan. The United States won't run out of Tomahawk missiles, which we are burning at a very fast rate in our campaign against the Houthis in the Red Sea.

Real quick, though, a couple other priorities on the defense side that are important. Shipbuilding is one of them because you can't build ships on the fast if you need them. And the U.S. Navy is about at least 50 to 70 ships smaller than we need it to be. And it also has very little logistics capacity ship to get to the fight.

So this bill would try to expand our ability to build ships, and it does that in some novel ways. It tries to exploit advanced manufacturing, AI and software that tries to make it easier to build ships when we have a shortage of skilled labor. And then finally, Trump has been talking a lot about making the homeland safer against missile threat.

So, the bill includes about $25 billion to start working on space-based sensors and interceptors to make that a reality. That would make the U.S. safer. And it also includes things like, if you remember the Chinese spy balloon flying over us, we really need to improve our ground radars and ability to detect threats like that.

So overall, not to get too in the weeds here, this really is a significant investment in our ability to defend ourselves. We are going to take a break. And when we come back, we'll talk about the big debate over reforming Medicaid in the House and Senate when we get back.

I'm Kim Strassel from the Wall Street Journal editorial board, and you may know me from my weekly column, Fox News, or the Wall Street Journal's daily podcast, Potomac Watch. I'm excited to tell you that my own weekly podcast, All Things with Kim Strassel, has its very own podcast feed, one that I'm really hoping that you'll hit the button and subscribe to.

It's been a great success so far, featuring Trump officials, members of Congress from both the right and the left, pollsters, policy geeks, all of them with news, insights, and debate that you couldn't get from anywhere else. All Things with Kim Strassel, the podcast now in its own feed. You can find it at WSJ.com, Apple, Spotify, and all your favorite podcast outlets.

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Toyota, let's go places. Welcome back. I'm Paul Gigo here on Potomac Watch with my colleagues Kim Strassel and Kate Batchelder-Odell. Another good bit of news, some beginning to put on the first real serious limits on student loans and that scandal of a program.

The bill would provide some caps, finally, on loans for graduate students, which have been uncapped and which have become a real source of income for schools because they've been piling on graduate programs. A lot of colleges, Kim, that in order to be able to lure more students to join them and take out more debt. And that's become a big problem because a lot of these graduates, assuming they graduate, do so with a lot of debt and not many job prospects. Right.

It's a sorry case that this does happen. And so let's reduce that subsidy. So this is good news. There is a smaller reduction in the cap for undergraduate loans. But for the first time, House Bill would put the colleges on the hook for at least a portion of

the loan default if, in fact, students cannot repay. Yeah, this is a great reform so far, Paul, and so overdue. As you were noting, by the way, recent numbers, if you graduate with an associate's degree, something that actually gives you an actual skill, like you go to become an auto mechanic, you're

unemployment rate right now is 2.1%. If you graduate from a four-year college, it is 15.3%, which is another way of saying, hey, why don't you invest the equivalent of a starter home so that you can be unemployed? And understandably, a lot of parents and kids are saying, why would we go do that? So this is necessary. Student loans obviously have ballooned. And as you said, it's because what

colleges do is they hike up tuition and offer these degrees that don't have much value. And then when students rack up debt, it's on them to pay it back or more likely the taxpayers. There's going to be these caps. There's also some limits on the amount of student borrowing based on the median cost of college nationally, which is also going to put some downward pressure on colleges to lower tuition because if they don't, they will be on the hook offering more financial aid.

And this also ends some of these loan repayment reprieves that people have used claiming hardship or unemployment. It doesn't just take everything away. It's giving people the option to make smaller payments over longer durations, but it's a much wiser way to go about getting that money back and not allowing kids to just continue racking up more and more interest that they can't pay. Also, one last thing gets rid of some

unequal and unfair treatment leveled on for-profit universities. There are certainly questions out there about those colleges, their kids and performance, but they're no different than regular colleges in that regard. And this at least equals the playing field. All right. The big drama. That's the last we'll talk about the budget today before we get to Mike Waltz. But the big drama coming up here is

We won't know the outcome until next week when it emerges from committee, but is over Medicaid. And this has become a political melodrama because a lot of Republicans are skittish

about reforming Medicaid, yet Medicaid is growing by leaps and bounds. And if they don't get a handle on it, they are going to find it very, very difficult to ever control federal spending. It's becoming a kind of out of control entitlement that just keeps growing without any political ability to reform it like Social Security has become, Medicare has become. And if that happens to Medicaid,

you're really beginning to shrink the window of any reformable parts of the federal budget, Kate. And Medicaid has been growing in part substantially because Obamacare expanded who is eligible for it and how much the federal government

reimburses the states for each additional new recipient. And of course, Medicaid started as a 50-50 joint program between the feds and the states. The idea is you would share responsibility

and it would somehow make the program more disciplined. Of course, what's happened is it's the opposite. States game the system to get more money from the feds and Obamacare increased the federal reimbursement for able-bodied adults

to 90% from 50%. So what are the prospects for something serious happening in Medicaid? Well, Paul, I think you're getting at the fundamental thing, which is that Republicans need to take this opening to really fix some of the fundamental incentive problems in Medicaid.

You mentioned how Obamacare pays 90% of the costs for prime age men, childless men, some of whom are above the poverty line. That was a pure bribe to get states to take the money and expand their programs. There's no policy rationale for that. There is no reason that Medicaid should pay more for able-bodied men than they do pregnant women and the disabled and low-income children. So why has this system continued to exist that...

encourages states to spend more on able-bodied men and draw down more federal dollars that way and crowd out resources that should be spent on pregnant women, on low-income children. So this is the case that Republicans need to make. And that's what you started to hear Mike Johnson saying. We want to preserve this program. We want to make it able to focus resources on the people who most need benefits.

So I think if Republicans want to make the argument here, they can win it because I don't think voters really know or want a Medicaid program that prefers men who can work over pregnant women. So that I think is the real opportunity. And if they don't fix it, I don't think that they'll get another chance because you have 10 states left that haven't expanded Medicaid, haven't taken that money.

And they might conclude, well, it's here to stay. It's never going away. We'll just take the bribe now. And that would just contribute to Medicaid as a huge entitlement that can never get under control. Yeah, this really may be the last big chance for another generation to do anything about Medicaid, Kim. But there are a lot of skittish Republicans, and you can see there's almost, there is, I think it's fair to say, a campaign.

underway now to try to intimidate and scare Republicans. Every other day, you see another so-called moderate in the House quoted as saying, I don't think we should touch Medicaid. These are the seats that will be most at risk in 2026. And then, of course, Josh Hawley, the senator from Missouri, who is a very safe seat for him. But he campaigned for the Senate against the Obamacare expansion.

that it expanded Medicaid. Now, he's saying, oh, no, no, no, no. You cannot touch that expansion or reform the program. And he's now become... I mean, he was...

Three or four years ago, he was the scourge of the left because of what he did on January 6th supporting Trump. Now, he literally is the favorite Republican of the New York Times and every media outlet because he might kill Medicaid reform. And of course, they all want to kill any Medicaid reform because they want the Democrats to

Prevail on the program and the priorities, number one. And two, defeat the Republicans in 2026. Yeah, he sounds just like Bernie Sanders. The last time I heard him talking about this, he was talking about how any cuts to Medicaid would be catastrophically unwise.

which does sound like something you'd hear out of the mouth of the left. But this is part of that new breed of populist Republican that are adopting some of those ideas. You just made a really great point, Paul, which is that for every Josh Hawley that's out there, there are nine members of the

conservative voting base who want to see someone do something about the debt, someone do something about some of these anti-poverty programs that have grown out of control and no longer are focused on their mission. And I think the bulk of the Republican Party understands that. The problem, of course, is you noted you hear a moderate here or there. Those people have extraordinary power right now, given that you do need near unanimity.

And that's going to be the question is if they can get them on board. They've got some very good ideas. One that's being bandied around, obviously, and I think they're very close to agreement on are some work requirements for those able-bodied adults that Kate was talking about. A bigger discussion right now are per capita.

caps, which would essentially change the allotments that go to the states that are receiving that Medicaid expansion. And we'll see how that goes. One thing that just got dropped in here today, though, that makes me very nervous is as Republicans run around desperately trying to think of ways to not get in trouble by cutting things, the White House has wandered into this by saying, well, maybe you don't have to cut that much or change that much.

Because we'll just raise a whole bunch of money with new drug taxes, essentially. They're proposing a most favored nation drug purchasing policy, which would essentially peg or limit government reimbursement rates to the lowest prices that are paid abroad.

for U.S. drugs that are sold elsewhere. This would be terrible for innovation, terrible for the pharmaceutical industry. It's a very bad idea. The good news is Mike Johnson has been very cool to it. But just as Republicans are nervous anyway, then the White House comes in and goes, hey, here's an easy way for you to not have to deal with the potential pain of tackling Medicaid. I worry that that might be a tempting option for some of them. Is this proposal being floated by the White House or is it being floated by members of Congress? Yes, White House.

So this comes from the White House. Yep. Okay. So more price controls on drugs than even the Biden administration was able to get through Congress. Yes. So, okay, let's take one of the stars of the American economy, the biotech industry, pharma, and let's turn it into the French drug industry. Okay. Yeah. All right. There's just another wonderful idea. Great. We are in the middle of this incredible innovation.

In drug – Life-saving, yeah. Life-saving. Individualized medicine. And yet that takes money. Investment. And it takes patents and so on. And if the government's going to say we're going to confiscate it all, you're not going to get venture capital for the industry and you're not going to get innovation at all.

So another dumb idea. Talk about catastrophic ideas. There's one. There's one. I agree. Let's reduce future therapies, life-saving therapies. We're going to take another break. And when we come back, we're going to talk about Donald Trump's dismissal of his national security advisor and his deputy when we come back.

Don't forget, you can reach the latest episode of Potomac Watch anytime. Just ask your smart speaker. Play the Opinion Potomac Watch podcast. That is Play the Opinion Potomac Watch podcast. From the opinion pages of The Wall Street Journal, this is Potomac Watch.

Welcome back. We're going to shift topics right now to Mike Waltz and Alex Wong, sacked by President Trump here as National Security Advisor. And I'm here with Kim Strassel and Kate O'Dell. Mike Waltz, who was President Trump's National Security Advisor, he and his deputy, Alex Wong, have apparently been sacked. They will leave, according to multiple press reports, the former Florida congressman. This is not a great surprise because

He had been targeted for being to blame for the signal chat that accidentally included Jeffrey Goldberg of The Atlantic and was embarrassing to the administration, no question. But was it a hanging offense? My personal view is no. And why Waltz?

And Wong, Kate? Well, I do think some of this is pretextual and not related to the Signal event. If you remember that Signal chat, since we've all read it, it starts with Waltz basically asking people for their points of contact about something they want to discuss with the Houthis. If that had been all that it was, it would have been a half-day story, a funny newsletter story that disappeared. The reason that it became such a mushroom cloud is because

of the continued discussion and particularly the Secretary of Defense putting details onto it about launch times for US aircraft on aircraft carriers in the Middle East.

And so I don't think that this was a hanging offense for Waltz. I think that Hegseth is unfortunately the one that made it the story that it was. He, of course, would require Senate-confirmed replacement, so the administration would be less likely to want to pin him down for it. But I do think that Waltz, and particularly his deputy Alex Wong, who is an alum of Tom Cotton in the Senate,

were substantive players in the administration encouraging the president in a direction of favoring American leadership. And I think that made them targets from the beginning before this whole Signal affair even erupted. Targets of the neo-isolationists inside the administration, inside the Tulsi Gabbard, J.D. Vance wing internally, and then outside Kim, the Don Jr., Donald Trump Jr.,

Tucker Carlson, Charlie Kirk wing, who want basically to concede to an Iranian nuclear weapon, number one, and to concede to Russia's demands, or most of them, on Ukraine.

just for two areas where Waltz has differed with any number of that crowd in the administration, as we saw a little bit when we got an insight through that signal chat. Yeah, and here's why this really worries me. I agree with Kate that this suggests that those who believe in a strong American presence abroad

are being targeted and now are losing a really important voice. And what's more concerning to me is if you step back and you look at Donald Trump, I actually think that his natural inclination is to have a strong U.S. presence abroad. He campaigned on a Reagan-esque peace through strength. He kept using that phrase over and over. He likes to be engaged in part because he likes to be the dealmaker. He likes to be the guy that settled things. And he's the tough guy. Like he's this guy saying, don't mess with me.

And to the extent that he's losing that voice, this is another example, I think, of those that are in power because of Donald Trump, but who are less interested in serving Donald Trump's stated ambitions than they are imprinting their own stamp on the party. And to the extent that they are axing this rival and further undermining.

strengthening their grip over the office and what the president hears. I just don't think it bodes well. Yeah, that's my take as well. I wonder who's left in the peace through strength wing of the party, Kate, in this administration. I mean, first they got rid of Pompeo. He was not brought in. Mike Pompeo, former Secretary of State, Brian Hook,

Iranian account in the first term. They were all X'd out. Then you had a whole slew of people who worked for the Hudson Institute and elsewhere who were on the hawkish side. They couldn't get jobs.

Mike Waltz managed to go in because he was a big supporter of Trump, Florida congressman, former veteran. Then he brought in Wong and a group of advisors from the Hill. First of all, everybody except Wong and Mike Waltz were purged after the Signal chat. They were targeted, I think, by the Tulsi Gabbard crowd.

And now the two people at the top of the NSC are going. Now, Trump does tend to go churn through NSC advisors. He had three in the first term or was it four? I can't remember. I lost track, but it was at least three. So Mike Waltz is number one here. The question I have is who's going to be willing to take the job? You're not going to get any member of Congress who thinks he's going to survive in Congress or has any tenure there to take the job.

No, you're not. I think, too, that this is not just a personnel story, that this actually matters to the success of the president's agenda in ways that he might consider. You know, the president has been very clear, and to give a concrete example, that he wants the Houthis to stop shooting at us in the Middle East.

He has spent 40 days striking the Houthis. The Pentagon says we've hit 1,000 targets, and the Houthis are still shooting back. Earlier this week, a Navy jet fell into the water because a U.S. aircraft carrier was taking evasive maneuvers from a Houthi weapon. So they're still shooting back at us. We know that Walt, from that signal chat, was one of the voices telling the president that he needed to hit the Houthis hard.

And now the president is at a similar juncture where he's going to have to decide whether he wants to interdict the Houthis' Iranian supply, as he has threatened to do, to really show that he's not going to tolerate the Houthi behavior, or if he's going to be influenced by that element of his administration, the Tulsi wing, if you will, that says the Houthis aren't our problem, who cares about this? That's an example of a place where...

where the president needs good advice, where he cares about maximum pressure on Iran, and he cares about eliminating the threat of the Houthis shooting at us. And so getting someone good in that position really does depend for his own success. I note that Defense Secretary Higgs said this week that he publicly warned Iran that we know what you're doing to support the Houthis.

We are watching it and you will suffer consequences if you don't stop. Now, we've heard that consequences line before, but there's some stake here in terms of the president's credibility. He's basically put down a couple of real strong markers against the Houthis and Iran. And if they keep attacking American ships, he is going to have to act or

jeopardizes credibility with the rest of the world. All right, Kim and Kate, thanks for coming in as usual. And thank you all for listening. We're here every day on Potomac Watch. The Wild and Wooly Washington is our subject most days, and it promises to be even more dramatic as we go ahead. Thanks for listening.