The GOP's Budget Progress / Trump vs. Feeble Shower Heads
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In an age of unprecedented disruption and opportunity, success depends on what you do with your data and how fast you do it. This is the era of AI. This is the era of KX. KX, survival of the fastest. From the opinion pages of the Wall Street Journal, this is Potomac Watch. The House narrowly passes a budget outline for the Republicans. Big, beautiful bill to cut taxes. And believe it or not, that was the easy part.

Meantime, President Trump signs an executive order to make shower heads great again. But does this mean new bathroom fixtures soon coming to a hardware store near you? Welcome, I'm Kyle Peterson with The Wall Street Journal. We're joined today by my colleagues, columnist Kim Strassel and editorial board member Kate Batchelder-Odell.

After much debate and cajoling of GOP holdouts, the House voted 216 to 214 on Thursday to advance a budget bill and begin the process of passing a reconciliation bill with 51 Senate votes.

given the disagreement in the Republican Party and the way that the dissenters thought they might have Speaker Mike Johnson cornered. The Journal's editorial today credits the speaker with another Houdini straitjacket escape. Here he is, the man himself, Mike Johnson, speaking to reporters on Thursday. The American people are counting on us. Time is of the essence. We know what's going on around the world. We know that the debt limit is

Cliff is approaching us pretty quickly here. We know that markets have been a little unstable. They want to know that Congress is on the job. And I'm here to tell you that we are. The Article 1 branch of this government, that the U.S. House of Representatives and the U.S. Senate are going to do our job. And we are going to provide stability, and we are going to send this message to all of our allies and friends around the world, and to our adversaries as well, that America is back, and the America First agenda will be enacted. President Trump's promises will be fulfilled, and we're really excited that

Today, we took a big step in getting that done. Kim, what's your read of this budget outline and particularly what the dissenters wanted and then their final decision to let themselves be persuaded? Yes. So I look at this in two ways. In one way, this was a bit of a silly fight. And here's why. Because the Senate has to engage in certain different procedures in order to stay on the right side of the Senate parliamentarian and what they call these bird rules as part of reconciliation.

And therefore, one reason they had this lower floor for how much they had to cut out of the bill was to comply with that. And that floor written in their set of instructions that are going to go to their committees is not set in stone. It does not preclude the House from going and getting much greater savings in a final bill, cutting more in a final bill. And so in that regard, it was kind of a tempest in a teapot.

On the other hand, I do think this is quite important because what this disagreement foreshadowed, this was a little bit different than the first time around where I would say you did have a bunch of individual grandstanders that were trying to get some attention because they couldn't be brought on board and they wanted the president to call them and stroke their egos. This time, I think what you had was a block of House Republicans making very clear that

that they will not be on board with a final product unless there is some serious deficit reduction in it, more than the Senate has so far indicated that it wants to give. And this is classic. The Senate is terrible when it comes to spending. It believes money cures all ills. More of it is always better. And it's got a bunch of

in there who also don't want to touch some programs that are going to need some oversight and look at, like, for instance, Medicaid, just simply slowing the rate of growth, the rate of money that we're throwing at it is something that is absolutely called for. So,

It foreshadowed the battle lines here. And I think it drew a marker in the sand. And it took both Johnson and John Thune in the Senate to convince them that there would be a serious effort. And now they're going to have to try to show that that's reality if they want the final votes on this. Kate, what about the role here of Senate Majority Leader John Thune mixing it up

with some of these House Republicans. Here's one of the things he said at a recent press conference. We are aligned with the House in terms of what their budget resolution outlined in terms of savings. He said that the speakers talked about $1.5 trillion. We have a lot of United States senators who believe that is a minimum, unquote. And Kate, what do you make of this, the head of the Senate opining on the budget outline as it sits before the House? Well,

I give Thune some credit for not merely saying, sorry, Speaker Johnson, sounds like a rough problem you've got over there. Let me know when you've got it sorted out. He did put some capital on the line in his own credibility and saying we are on the same page and we want to cut spending. So I think that's a good sign. And I think it's something that the deficit hawks are claiming as an achievement. They think it's a marker for where they can drive the eventual bill.

I do think the challenge here is just going to be driving this huge bus through a very narrow political lane in both the House and the Senate. When you go back to when the Senate passed its reconciliation budget over last weekend, it very, very narrowly defeated a bill that tried to strip out the House's plans to trim money from the Medicaid budget. That's written in the House bill under

They direct the Energy and Commerce Committee to find $880 billion in savings. And that's kind of the stand-in for the Medicaid reforms that the House is trying to get done. And the Senate moved on an amendment to try to strip those out. And Susan Collins voted for it. She's a senator from Maine who's up in 2026.

So the politics are hard here. And you also have folks like Rand Paul in the Senate who are saying they don't want to vote for stuff that includes a debt ceiling. You could lose one or two that way. So getting to 51 in the Senate, I think, is a real challenge of something that can also get to 218 in the House. Kim, to that point, do you think that John Thune is out on a limb here if he is reassuring these Republicans in the House that the Senate can do big spending cuts, big savings?

if the lane in the Senate that he has to operate in is really that narrow. Well, he's not really out on a limb because you want to know what the markers is of a very good politician. And John Thune is a very good politician. He didn't commit to anything in that press conference. He came over and good for him. OK. And he stood next to Johnson and he says, we are with you, man. And and our priorities are aligned and we're going to be very aggressive here and we're going to do

And he never said the words $1.5 trillion. He did not give a number that he was promising himself to. So, look, I do think this did matter. Seeing him over there saying that he was going to attempt...

to be part of this was visually very important. It was important to the reassurance that House Republicans needed. I think it was also important for this reason, that there are some Senate Republicans who are entirely aligned with those House Republicans on the need for cuts. They've been looking for a sign from Thune and from leadership that they're going to get the backing on some

priorities they really want to try see through. Just one example, Senator Ron Johnson from Wisconsin is pushing very hard and he claims he has the president's backing on this to come up with Congress's own version, as it were, of what DOJA is doing to look at the budget line by line and try to come up with cuts there with a goal of

of returning our budget to something closer to a pre-COVID baseline rather than this perpetual 1.5 times more that we're spending now every year, even though we're no longer in a global emergency. And basically, all that spending kind of got baked in, and people say it's now or never to roll a bunch of it back. So they were very happy to see Thune do this as well.

Again, I think Kate just laid it out very well. The problem is there will be limits. There's all this talk always about getting to 218. 51 matters just as much. And Thune is going to have his own difficulties managing that caucus and getting them on board. Hang tight. We'll be right back in a moment.

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Welcome back. Part of the question here, it seems to me, Kate, is how much covering fire those Republicans in the Senate and the House are going to get, including from the White House, the GOP making the argument and trying to win the argument with the public online.

on these spending questions. And Medicaid is one that we've discussed in the past. But if you could put a bug in President Trump's ear, I mean, he is never going to be giving town halls and talking deeply to the public about Medicaid policy. But you could put a bug in his ear to say, why is the federal government reimbursing states paying more for Medicaid patients who are single, able-bodied adults under Obamacare expansion than it is for the classic

Medicaid population. That doesn't make any sense. That might be an argument, especially if you can get the president to raise it in public with voters that Republicans find out they can win. Yes. I mean, to Kim's earlier point, $880 billion, which is a rough target over 10 years, it sounds like a lot of money, but really just by slowing the growth of Medicaid spending, you can get there. I mean, that's how enormous Medicaid is and how fast it's growing.

And also, there are ways, like you said, to target, I think, what is a really popular message with the public. And one example of that would be, you know, we're going to impose a requirement on able-bodied men that they work in 20 hours a week, for instance, which is kind of a rough target in exchange for getting this benefit. There's a moral case to do that and a social case for doing that that's merely, that's completely outside, too, of the savings case for doing it.

I do think you will need to get the president activated. And I think also there is plenty of Medicaid money, for instance, that checking eligibility of who's eligible for this program has been very loose in the states. The states also have these provider taxes that they leave me that is really...

They charge these taxes and then they use that money to inflate how much they spend on Medicaid to draw down more federal dollars. That's just inexcusable. There's so much there that they could target for policy reforms without touching benefits for pregnant women, for low income children, for the disabled.

If Republicans want to have that argument, I think they can win it. But you're going to need an engaged president. And also, they need to start developing the specifics of these ideas pretty much pronto. I always remind people tax reform in 2017 was a product of years and years of intellectual spade work.

And I'm concerned that we don't have any real leaders in the Republican Party who are out there making this fiscal and moral case every day on why these reforms need to be enacted. They're still very general, and they're not getting into specifics and teaching their colleagues how to defend it in public.

Can I actually add something there? I mean, to Kate's point about just being unprepared, not just for a Medicaid discussion, but for a health care discussion, because another super powerful argument Republicans would have against this is just to remind people that.

that this was all part of a grand plan that Democrats have to slowly migrate everybody over to government-run health care, which Americans do not want. They like their private health care. And even many of the people that are using Obamacare, they're not going to say, oh, this is fantastic. Like, I just so love this insurance program I'm getting at the moment.

But for Republicans to do that well and make that argument, they also have to be ready to go and say, here's how we want to transform the health care system in a way that really will help you. Like, not only do we want to get you off of Medicaid, but we want to make sure that you are in a program that is really benefiting you and your family, that's portable, that's cost effective, that's efficient and efficient.

They have just completely lost the plot on health care for more than a decade. Ever since they lost the Obamacare debate, they just gave up on it. And they're going to need some intellectual leadership, some folks that really care about this issue and then educate the party on how they go about it. But if it took a Houdini move...

from Speaker Mike Johnson to get the outline, the budget outline over the finish line. It will be interesting to see what he has to pull off to figure out all these details where there are competing views within his caucus and his conference, not only on health care, but on a lot of the taxing issues, including some of those that were raised by President Trump on the campaign trail, free taxes on tips, doing some sort of carve out interest, carve out for car loans.

And Kate, what do you make of some of the rumors in recent days that some Republicans, maybe even President Trump, are okay with –

raising tax rates, maybe on higher earners, millionaires, in order to fund some of that other stuff. I saw one headline suggesting that Republicans maybe would be okay with a 40% tax rate up from today's 37% as a top bracket in the tax code as part of this bill. Well,

there are certainly constituencies in the Republican Party that would be fine going to a 40% top marginal tax rate on individuals. There's no question about that. And there were people who were okay with that 10 years ago when the Tax Cut and Jobs Act passed. And it was, I think, an achievement that Congress lowered the rate even just from 39 to 37, which is not

huge, but it showed that one, everybody got some rate reduction. And the you know, the top rate is the rate that's most relevant to the incentive to work and invest that extra hour, which matters for lifting incomes and growth. So

I think right now you have a lot of different competing factions out there that are trying to get their pet ideas in this final bill. And so you do have some constituencies, I think, particularly in the White House, who are maybe enthusiastic about this idea of using the revenue on paper from raising the top rate for this or that thing, like the car loan deduction. No taxes on tips is looking like that's going to have to be in the bill in some form. That's becoming a priority now.

But I think there's not a lot of appetite for that in Congress right now, especially in the Senate. I think even as a purely practical matter, set aside my growth argument for a moment, if you start revisiting these rates from 2017 and say, this is up for grabs, suddenly all

All the rates come up for grabs, including the corporate rate maybe. That's not expiring. But some of these other deductions go back on the table, and it becomes harder to extend the bill in full from 2017 like lawmakers want to do. And so I think even practically, it would be a mistake. And it's obviously, we'll make the bill...

more anti-growth, which now Republicans really can't afford because of the tariff environment that Donald Trump is creating. So I'm hopeful that even though there are forces who would be comfortable doing that, there are too many voices on the Hill that understand why it's a bad idea. Kim, what's your take on this and particularly the question of how much

these tariffs and the turmoil in the economy has concentrated Republican minds on that question, on making sure that this tax bill is not just new carve-outs for new constituencies, but some kind of broad-based tax reform that

that will encourage growth, affect incentives, and get the economy moving again the way that I think the 2017 tax bill did. I mean, the sequencing is a little bit off because then President Trump did the tax reform first, and I think that took some of the damage of his subsequent tariffs out of the picture. And now he's doing it the other way around. But if Republicans really...

are concerned about what's happening in the economy right now, are concerned about the prospect for a recession, it would seem to me that that would argue for a tax bill that is focused on growth. The urgency point certainly got across. We would not have seen this vote this week, I don't think, successfully had it not come on the back of

all the tariff turmoil. Republicans are very good at finding excuses to not get anything done and not move very quickly. So this was certainly a function of what they were seeing play out in the market in the White House. The policy side of it, I'm very skeptical, just like Kate on this, because this is a point about how far away we are from the right kind of conversation we should be having. It was great to see House Republicans, Republicans

a group of them band together and say, we really need to do something about spending and draw a line in the sand this week. What you don't see are any Republicans making the intellectual argument against Donald Trump's bit-by-bit handout tax carve-outs that he is proposing, which are terrible

policy on the merits. So we can talk a long time about why that is. And part of it is because we have a generation of Republicans who actually don't understand tax policy, which is a bit embarrassing for them. But also, it's just that, you know, nobody really wants to go against Donald Trump on these issues, especially because they're succumbing to what they consider easy politics, right? Like,

oh, yay, we'll hand out no taxes on tips and all those restaurant workers will vote for us. And won't that be great in the next election? Unaware of the fact that if the economy is in a recession, you are overall going to lose votes from everyone because you are going to own that and forget these little interest groups here or there that might be grateful to you. They're not going to be thanking you for an economy that's in the tank.

And my own belief is that not only should we be talking about getting rid of some of those carve-outs, but we need to be talking about how you extend and deepen the important growth portion of the Trump 2017 tax return. We ought to be talking about a flat tax. We ought to be talking about cutting business rates even more. And we're not having that intellectual argument. Instead, we're talking about

how many things can we cut in different ways and shuffle things around? And how much love are we going to get from all the parents for their child tax credit handouts that we give? And it's not very productive at the moment. Hang tight. We'll be right back in a moment.

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Welcome back. Meantime, on Wednesday, President Trump signed an order with this title, maintaining acceptable water pressure in shower heads. We should have started with this, by the way, Kyle. The biggest news of the week, perhaps. It is. It is. Here's the president of the White House explaining what he's doing. You take a shower or wash your hands, whatever you do, including dishwashers when no water comes out. But

You wash your hands and in my case I like to take a nice shower to take care of my beautiful hair. I have to stand under the shower for 15 minutes till it gets wet. It comes out drip, drip, drip. It's ridiculous. And what you do is you end up washing your hands five times longer. So it's the same water.

And we're going to open it up so that people can live and we're going to hopefully have Congress approve it so it's memorialized. Kate, this is a Trump classic from his rallies. The question is how big of an effect it will have and how quickly. My understanding is that Congress passed a law in the 1990s limiting showerheads to 2.5 gallons per minute.

And the question that came up then in the wake of that is, what is a showerhead? Is it one fixture, as the Obama and the Biden administration suggested? Or if you have one fixture with six or four nozzles, is each of those one showerhead? And so you have to multiply that 2.5 gallons and you can get broader water flow out of it.

Well, my understanding is that that has produced like thousands of words of federal bureaucracy about what a showerhead is. But overall, Kyle, I think this is a great issue for Trump. I think all of these efficiency standards are loathed across America, predominantly.

particularly by me, as someone who has three children under five, I need a dishwasher that goes on turbo all of the time. And people complain that their appliances, as these efficiency standards have gotten more stringent, have just gotten less effective at doing what they need to do. So I think there was also the Senate moved this week to repeal a Biden regulation on water heaters that was also for more efficiency standards.

And Congress moved to do that under what's called the Congressional Review Act, where they can nix rules with a clear vote. So I think this is a great winner for Trump to try to roll back some of these efficiency standards that people really don't like, that are very much oversold in how much they help the environment. I think on any appliance, keep going. That's all I've got. Kim, I tend to agree that this is a popular move by the president. One of the things that's interesting is in the reporting, you see some of the advocates

of these energy conservation standards. And they're all but suggesting that the next Democratic president is just going to reverse this maybe in 2029. So if you're a big fixture manufacturer, if you make plumbing supplies, you are not

really going to be rushing out tomorrow to go retool your factories to make these new hydro shower heads that President Trump is imagining because you think they're going to be banned again in a few years. And there's not nothing to that argument, but it does seem to me that there would be a clear market demand for this. And even if the big guys are not going to do it,

maybe somebody would, I don't know, maybe Elon Musk, he doesn't have enough to do. Maybe he needs to start a plumbing fixture business directed toward Republicans, conservatives, Trump fans, X fixtures straight to your home. Like, I mean, I think a huge part of this, this is why I'm with Kate. Will the market respond to this? I think I'm,

I think in part, one of the reasons this might be different this time around is Trump is all in on this, right? And we're also in this new era. I mean, essentially, that order was make American showerheads great again. And he's

bringing back this ability for people to speak freely about what they actually want. We've seen this in all kinds of areas, right? It almost feels as though for the past decade or two decades almost that average Americans felt cowed to say what they thought was politically correct and they thought was the right way to go. And obviously, none of us would want like a shower that actually worked because then we might be wasteful in using water. When in

fact, how we all feel is I want my shower to be like a car wash, right? Like when I come out of the shower, I want a concussion. That's how much I want my water pressure to work. And having the president stand up there and say, yes, like

we're all embracing this. This is an amazing, great thing. I would love to see some polling on this these days, much in the same way that you now see people rebelling against DEI, rebelling against ESG, saying, actually, no, like, give me my internal combustion engine. I think that you would probably see that this is like an 80-20, 90-10 issue. You get

that message across and maybe you get Congress on board and maybe you put some pressure on Democrats to say, really, you're going to stop people from having their car washed? Go ahead, run on that in an election. And you get enough people to actually change this in law, then manufacturers would feel a little bit more confident about where things are headed.

Kate, my last thought here is just as a matter of, I guess, governing philosophy. There are states that can do their own things. Some of them that have water issues have more strict restrictions than the federal rules on showerhead's.

But the founders created a federal government of limited powers. And I know that we have a commerce clause in the Constitution that lets it manage trade between the states. But I don't think that when the framers of the Constitution wrote that, they were thinking that Congress would be passing regulations on bathtub size and whatnot. And we'll give you the last word, Kate.

No, I think the founders would have been enthusiastic about showerhead freedom. Absolutely. That's about all I can offer on that. I think it would be much better to have Congress step in here and repeal that statute. And I think that would create a degree of certainty that companies could operate under and kind of discourage states from jumping in that way. Thank you, Kate and Kim. Thank you all for listening. You can email us at pwpodcast at wsj.com.

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