Making Sense Of Cents: Setting The Federal Budget
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Find a shoe for every you at your DSW store or DSW.com. Hi, this is John, and I am doing the last mile of a 100-kilometer trail race through Zion National Park. And you're listening to the NPR Politics Podcast. This episode was recorded at 1.06 p.m. on Monday, May 5th. And things certainly may have changed by the time...

You listen to this and I will definitely be done after 16 and a half hours of a lot of running on a very hot day. Enjoy. How is he okay? He doesn't sound breathless enough for someone. Congratulations. And he sounds amazing for the last kilometer, man. 16 hours. No, thank you. So much pain. But impressive. Very impressive. Hey there, it's the NPR Politics Podcast. I'm Susan Davis. I cover politics.

I'm Deirdre Walsh. I cover Congress. And I'm Tamara Keith. I cover the White House. And today on the show, the latest on President Trump's budget priorities and what's likely to come of them on Capitol Hill. Tam, I want to start with you because the White House released what's known as a skinny budget. It's a pared down version that outlines the big picture priorities for the administration. So what are Donald Trump's priorities? Yeah.

And we should just say the thing that we always say, which is presidential budgets are a wish list. But they do tell us what the president cares about and what he doesn't care about and what he wants cut. The headline here is that he wants really big cuts to what's known as non-defense discretionary spending. So that is anything that's not Medicare, Social Security, Medicaid and anything that's not the military, which is basically everything else that is the government.

And he would like about a 24 percent cut. Some areas get cut much more. Things like the EPA, the National Science Foundation, the IRS, the National Oceanic and Atmospheric Administration. Now, these are, you know, as we say with presidential budgets, these are cuts that are unlikely to become a reality in exactly this form. But it says that he wants more spending on

the military. He wants more spending on the border and he wants less on everything else. The budget included the term woke a bunch of times. It included the term DEI a bunch of times. So it was a very ideological budget document. But that's also what we've been seeing for the last 100 plus days. Sure. It sort of fits the vibe of what the administration has said. But I also note like

cutting that kind of spending by nearly a quarter, I was reading about how it would reduce that spending to the lowest levels of GDP since the 1960s. I mean, it's an incredibly drastic cut to spending. And when we say domestic programs, I

I also always like to point out that this is some of the most popular things in the country. I mean, these are food programs, your libraries, your child care, your local law enforcement. All of these things are funded by those tax dollars. So it's also pretty politically provocative to say that you want to sort of cut the social safety net that is society and not the entitlement programs. It would include a dramatic cut to something like AmeriCorps. What it essentially does is has...

Americans working in communities around the country that need help working on bolstering community programs or working in education, things like that. Another thing that Deirdre has been focused on is cuts to LIHEAP, which is the Low Income Home Energy Assistance Program. It helps people pay a

their heating bills, their cooling bills, depending on the climate that they're in. Deirdre, I'm curious about how this was received on Capitol Hill, because so far, Republicans who control Congress have been sort of cheering everything the administration does. But I wonder if they embrace this budget or sort of does what Congress normally does, which is like duck down and try to avoid questions about it.

Yeah, I will say it came out on a day when they weren't in session. So that sort of helped them avoid detailed questions about some of the specific cuts that you guys were just talking about. I would say it's been a kind of a mixed review. I mean, I think a lot of Republicans who represent, you know, red districts say this is what we were elected and this is what Trump was elected to do, you know, slash the size of the federal government. These are programs that are bloated and need major cuts.

Other Republicans in very senior positions, like Maine's Republican Susan Collins, who runs the spending panel that will be considering these kinds of proposals, were outright negative and critical of the budget proposal. She said, basically, ultimately, Congress holds the power of the purse. But as Tam says, like, this is not likely to become law, right?

Congress is also really preoccupied and focused on this other big process, which is passing President Trump's basically domestic agenda, including increases to border energy production and tax cuts, which are really sort of – they are priorities in his budget, but at the end of the day, I think –

Congress for the next few weeks and months, if not longer, and likely longer, is going to be sort of really tied up in that process. So I think we will again probably be talking on this podcast about what happens when they haven't agreed on spending bills come September. But I think we

You know, they'll be having a bunch of hearings and, you know, department heads are starting to testify this week on the Hill and they will get specific questions about these cuts. And we should note, like we're talking about the president's budget, which is like the theoretical wish list. If Congress did everything you wanted, which they won't do. But you're talking about the budget reconciliation bill, which is a very real legislative product that is moving in Congress right now. The main thrust of it is to extend Donald Trump's 2017 tax cuts and protect those tax cuts. But they want to do a lot of other things.

What is the status of that bill? Because it seems like it's often one step forward, two steps back. Yeah, I think the next couple of weeks will be very telling in terms of what ends up happening with that bill. I mean, they narrowly pass the blueprint to get the process going, but now they're in the nitty gritty. And that's where they have to make very controversial decisions that are impacting a lot of members and a lot of programs that

that vulnerable House Republicans are worried about cutting. I mean, I think the biggest debate that most people have been focused on in the House and in the Senate, the speaker wants to pass the House version of this massive package by Memorial Day.

That seems unlikely to me. This week, a couple of key committees were expected to sort of like put pen to paper and show how they could reach one and a half trillion in spending cuts to fund extending the president's tax cuts. A huge share of those cuts are expected to come from over $800 billion in cuts to the Medicaid program.

I mean, they all say we won't vote for benefit cuts, and the speaker says there won't be benefit cuts for eligible people in the program. But there are a lot of different ways that House Republicans are saying they are going to slash Medicaid funding. They keep talking about waste, fraud, and abuse. You're never going to get $880 billion in waste, fraud, and abuse funding.

But the other things that they're floating are sort of like make the states pay more, work requirements for people who want these benefits. But any way you slice it, Democrats are going to argue these are massive cuts. They already are. They're already out there going to Republican districts, having town halls on their own, campaigning for 2026 on the argument that Republicans are going to cut cuts.

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And we're back. And Deirdre, I want to talk more about the politics of this, the internal politics, at least. You were talking about the policy challenges they're going to have agreeing to terms on how to change or not change the Medicaid program. I'm curious about the internal Republican pressures here because Democrats are not going to take any part in this process. They need to get an almost Republican unanimity to do it.

And as something like reforming an entitlement program like Medicaid seems to me that it is one of those constant tugs between the two poles of the party. The conservatives want a very different thing than the moderates want. How far apart are they this time? They're significantly far apart. I mean, there is a chunk of conservatives who argue like.

This is what they were sent to Washington to do. Like every year Congress has this debate and it's time to do something about it. And they finally have a Republican trifecta. And that's what they say is a mandate. And they say they will not accept anything less than one and a half trillion dollars in cuts. And those are members like, you know, Texas Republican Chip Roy, who took to the floor, you know, late Thursday after all the other members had left town and argued like,

they need to follow through. Like we need to be serious. We need to talk about slashing the deficit. And the only way to do it is to cut these programs. And like, we can't be weak now. We have to stay together. Um, and he and other conservatives in both the Senate and the house are maintaining, like, I won't vote if it doesn't slash spending. Uh, and then you have, um, you know, moderates that we talked about before. Some represent, um, you know, swing districts, uh, it,

with a lot of Medicaid recipients, members from New York, members from California. The Speaker of the House has a significant chunk of his constituents in Louisiana that rely on the Medicaid program. There are Republican states that took the Medicaid expansion program that was part of Obamacare, which was signed into law in 2010.

So major changes to Medicaid in whatever form, whether it's the Medicaid expansion part of the ACA, whether it's eligibility rules, work requirements, whatever, are going to be controversial in a lot of these districts. And you can't do both. You cannot have the kinds of cuts that they want to pay for the tax cuts or to avoid funding.

massive deficit spending without looking at that program. This process that they're using to pass the bill and avoid a filibuster walls off Social Security. So they cannot touch Social Security. So as we've talked about in this podcast many times, and I know Sue, you talk about a lot, is like these discretionary spending cuts in the budget that the president proposed are really

Rounding errors.

could effectively reshape the size of some of these programs that millions and millions of Americans rely on. And I think it's going to be really, really messy. We're starting to see the beginning of the messy negotiations now. And I think the more you get into the details, the harder it's going to get. Tam, one of the things is that these big legislative lifts require a ton of trust.

And a dynamic that's unique to this moment that I don't think can be ignored in this situation is that this White House has proven particularly willing to ignore the will of Congress and do what it wants to do anyway, either through executive actions.

or the Elon Musk-led effort to cut government spending. So there's this element where Congress is being asked to walk a lot of planks and take a lot of tough votes, but then you're not even sure at the end of the day that the White House and the administration will honor it. I think you can trust that the White House will do whatever the White House wants to do. There was a senior White House official who did a call with reporters as part of the rollout of the president's budget proposal. And the

this official said specifically that they are not ruling out using impoundment. Impoundment is a fancy word to say not following the will of Congress and making cuts or changing the way money is spent despite what Congress has passed. And, you

you know, the White House believes that the 1974 Impoundment Control Act, which was passed by Congress to try to constrain the president and prevent him from doing that, they say it's unconstitutional. So that is sort of dangling out there that, oh, you can pass whatever you want. Maybe

Maybe he signs it. There's no guarantee that he doesn't come back and then say, I don't think we should spend that money. I'm not going to spend that money. I don't like that program. We're not going to do that, which is exactly what's been happening in the first 100 days. I mean, Congress created USAID. Congress funded USAID. And USAID was essentially gutted by the efforts of Elon Musk and Doge. And Congress has not been able to muster any sort of fight

Against that, it's also not hard to do. You can see these moments where it's like Republicans are to take all these difficult votes on Medicaid and Donald Trump can just tweet like, well, I don't want to do any of that. Like the the unpredictability and the nature of these negotiations, I think, are part of what makes it so difficult, especially when, as you noted, they're trying to move on a relatively quick timeline to get this done. How realistic do you think that is?

I think it's going to be hard. I mean, I think the overall goal that the Treasury Secretary and top House and Senate Republican leaders have set is to try to pass this whole package and sign it into law by July 4th. I think that is an incredibly tight timeline. But you guys know, I mean, the president gets a very narrow window to get the bulk of his domestic agenda through Congress before we start into another midterms.

midterm election season. We saw what happened with Build Back Better and, you know, how snags along the way drug that process out. I mean, I think the differences were confined to like a very small group of moderates. These seem to be like a whole series. We've talked about Medicaid, but there's also discussions about taxes.

Republicans all agree they want to extend the existing Trump tax cuts that expire at the end of 2025. But there are a bunch of other tax breaks that Trump is like, wait, let's also do this. Let's exempt taxes on tips, on overtime, on Social Security benefits. That all costs money. And to add those things to this package and some new ideas that have started to bubble up in the last couple of weeks is very complicated. I have a question for both of you, if that's OK, which is,

Do you think that there's a chance that the people who want big spending cuts just get rolled? Or do you think it's more likely that the moderates who don't want cuts to programs get rolled? I'm thinking back to the last time President Trump had a big tax cut that he passed. And I mean, I think they just basically cut the taxes and were like, oh, it's going to boost the economy by so much we won't even need to cut spending.

Yeah. I mean, I think that one of the interesting dynamics here is that this time around, not only is the speaker dealing with a way smaller majority than then Speaker Paul Ryan was dealing with, who had maybe 20 plus votes to play with, but you're also dealing with two leaders who are inexperienced. By that, I mean, Speaker Mike Johnson has never gotten

anything this big of a legislative lift through. And John Thune, who's a very experienced senator, has not had to tangle with the White House yet over what goes in this bill. So on top of it being complicated policy, I think the internal political dynamics are difficult. And I think a lot of the

ability to get these votes done, Tam, is not going to be through like the whip operations on Capitol Hill. It's going to be by like the sheer force of will that is Donald Trump. And I think what's interesting to me about this is like all of these big provocative things are happening as the president's approval rating is going down and the disapproval rating of a lot of these programs, a lot of these spending cuts are going up. So he's also asking his party potentially day over day to take votes that are much more unpopular than they have been even days or weeks or months ago.

And it comes in the context of the tariff policy that is causing the markets to go wild and not in a good way and causing a lot of people to talk about recession in a more serious fashion than they have before. In some ways, that puts more pressure to pass a tax cut.

I think that increases the pressure. And that's why you hear the speaker over the last couple of weeks argue that this package is going to juice the economy and give certainty and some new enthusiasm to the economic health of the country. I think that's his way of sort of like dodging questions about concerns about the financial markets and the tariffs. He's like, well, what we're doing is going to grow the economy and give greater confidence.

I do think at the end of the day, to your question, the closer we get to the 2026 midterms and more and more the numbers of people who come out publicly say they have concerns about X cut or Y cut, the harder it's going to be for Trump to keep them inside the tent because he's not on the ballot. They are. Yeah.

All right. We're going to leave it there for today. I'm Susan Davis. I cover politics. I'm Deirdre Walsh. I cover Congress. I'm Tamara Keith. I cover the White House. And thanks for listening to the NPR Politics Podcast.

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