Washington Wednesday: An unbalanced budget

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LINDSAY MAST, HOST: It’s Wednesday, the 28th of May.

Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Lindsay Mast.

NICK EICHER, HOST: And I’m Nick Eicher.

Time now for Washington Wednesday.

AUDIO: On this vote, the ‘yeas’ are 215 the ‘nays’ are 214 with one answering present. The bill is passed.

It couldn’t have been any closer last week when the House okayed a measure titled, “The One Big Beautiful Bill Act.” House Speaker Mike Johnson announcing the vote, and sending it to the Senate.

To do it, he overcame conservative opposition not to the “beautiful” part, but to the “big” part: as in, big spending. WORLD Washington Bureau reporter Leo Briceno now on what’s in there.

LEO BRICENO: A key focus of the Big Beautiful Bill centers on a straightforward problem: tax cuts made in 2017 under the first Trump Administration are set to expire at the end of this year.

That’s what led lawmakers like Florida Congressman Mario Diaz-Balart to push the bill over the finish line last week.

DIAZ-BALART: There’s no alternative except to pass this legislation. Otherwise we’re looking at a huge tax increase on the American people.

The bill does a myriad of other things too; it includes funding for the border wall, aims to cut federal funding for Planned Parenthood, finances a new missile defense system and more. But coming into the year, Republicans knew the tax component was going to be the centerpiece of Trump’s legislative agenda. And with new additions the president promised—like ending taxes on tips and overtime pay—It’s also by far the most expensive part of the bill.

So how does the bill compensate for the tax cuts—and everything else?

It does so in two main ways.

First, in order to get to the $3.5 trillion figure Republicans hope to cut by 2034, lawmakers will need to cut expenses every year for ten years in their annual spending legislation. While they’re in power for the next two years, Republicans can start down that road, but Oregon Congressman Cliff Bentz says he’s counting on future sessions of Congresses to finish the job.

BENTZ: Obviously, you put it in place as best you can during these two years and then you have to say whoever comes along next realizes that the budget has been set up a certain way… So as these things are put in place, others that come along later are going to have to look at it and go ‘oh this is not going to change easily’ but you can’t bind a future congress. Except as to debt apparently.

A few Republicans are skeptical that those cuts will actually happen. Here’s Thomas Massie of Kentucky—one of the two Republicans who voted against the bill’s passage.

MASSIE: This bill dramatically increases deficits in the near term but promises our government will be fiscally responsible five years from now. Where have we heard that before? How do you bind a future Congress to these promises?

The second way Republicans aim to cut spending is by reworking ongoing government programs that will extend beyond the current session. And there’s one particular program the Big Beautiful Bill aims to re-tool.

Medicaid is a joint federal-state partnership that provides health insurance for low-income Americans, seniors, and individuals with disabilities. And in 2024, it accounted for 13 percent of government spending overall. Republicans aim to trim that number down by making sure only those eligible are actually participating in the program.

MURPHY We want to strengthen Medicaid for the people who are eligible and stop the gimmicks…

Congressman Greg Murphy runs his own medical practice in North Carolina. Most of the patients he serves are on Medicaid.

MURPHY: I care about hospitals. I want to make sure that they’re funded. But just like anything, we just have to have accountability in all of our systems to make sure that they provide the resources for the people who need them.

Among other changes, the package would require states to verify recipient addresses to prevent enrollment in two states at once. It would require a quarterly evaluation of deceased recipients, monthly checks on providers to eliminate fraud, and proof of citizenship, nationality, or immigration status from participants. The bill would also require able-bodied recipients between ages 19 and 64 to work at least 80 hours a month.

Those changes would begin at the end of 2026. It would not change standards for anyone with disabilities.

According to the nonpartisan Congressional Budget office, those changes will account for 20 percent of all the savings Republicans hope to ultimately achieve by 2034. The Budget office also estimates those changes will leave almost eight million people without health insurance.

Many Republicans wanted to go further. Here’s Congressman Andy Harris of Maryland, chairman of the conservative-leaning House Freedom Caucus.

HARRIS: In its current form, I can’t support the bill. It does not eliminate waste, fraud, and abuse in medicaid. The president called for waste fraud and abuse to be eliminated. I don’t think that’s where the bill sits

In the end, Harris didn’t vote against the bill but he didn’t support it either. He voted present.

Republicans like Harris had hoped to scale back federal dollars obligated to individual states through the Federal Medical Assistance Percentage—or FMAP. The Federal government pays at least one dollar for every dollar that states raise for Medicaid. Some Republicans had hoped to put more of the financial burden back onto the states.

The bill doesn’t change the amount the Federal government pays into Medicaid but what it does do is freeze some of the tools states use to draw in federal contributions.

That’s led some Democrats like Alexandria Ocasio Cortez of New York to believe that states will be left with funding shortages the federal government would normally pick up if costs go up.

CORTEZ: What other sources? What other sources? They tied their hands on the provider tax to drive up revenue. So they’re blowing a hole in state budgets. So what are states going to do? …. Because they have tied up all the revenue raisers states traditionally turn to in order to fund Medicaid.

It’s unclear just how the Big Beautiful Bill Act and its many priorities might change in the Senate. Over the weekend, Trump said he expects some tweaks to the package passed by the House. Any changes made by the Senate would have to be re-approved by the House before heading to the president’s desk.

Already, at least one senator believes the bill goes too far. Here is Senator Josh Hawley of Missouri talking about some of the Medicaid changes.

HAWLEY: I’m not going to support this bill from the House in this form. I think that’s clear. It has got to change before it can pass the Senate.

With the bill’s one-vote success this time around, convincing the conference to support more changes would be a tall order for Speaker Johnson.

Here’s Florida Congressman Diaz-Balart again.

DIAZ-BALART: With something of this magnitude there are other parts that can be improved, there are parts that one doesn’t like. But the question is what’s the alternative? … I think, you know, we have to understand that no bill is perfect but this is frankly about as good as it’s going to get under the circumstances.

Reporting for WORLD, I’m Leo Briceno in Washington, D.C.

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