Republicans Take a Big Step Forward on Trump Agenda

Reuters
By Michael Rainey

Happy Wednesday! It took a bit of drama, but House Republicans approved a budget resolution last night, laying the foundation for a massive legislative package that promises to deliver much of President Trump's agenda, including up to $4.8 trillion in tax cuts and as much as $2 trillion in spending cuts. At the White House, President Trump held his first Cabinet meeting today, during which he shared the stage with non-Cabinet member Elon Musk amid reports that some department heads are growing weary of the tech billionaire's interference with their staff. "Is anybody unhappy with Elon?" Trump asked. "If you are, we'll throw him out of here."

House Passes Budget Blueprint in a Squeaker

It came down to the wire and then some, but Republicans passed the spending blueprint for what President Donald Trump has called a "big, beautiful bill" that would provide tax and spending cuts, money for border security and new assistance for the gas and oil industry.

The vote was a bit chaotic as the GOP whip team tried to rally support from a handful of Republican lawmakers Tuesday evening, and at one point it appeared that the bill had been pulled from the floor and lawmakers sent home. But a few minutes later, the vote was back on and the bill passed as three of the four holdouts changed their minds.

The final vote was 217-215, with all Democrats voting against the bill, joined by one Republican, Rep. Thomas Massie of Kentucky. Republican Reps. Warren Davidson of Ohio, Victoria Spartz of Indiana and Tim Burchett of Tennessee had spent the day saying they would vote no based on what they said were insufficient spending cuts in the bill, but flipped following pressure from party leaders and, in two of the cases, direct pressure from Trump.

Speaker Mike Johnson celebrated after the vote. "We got it done," he said. "This is the first important step in opening up the reconciliation process. We have a lot of hard work ahead of us. We are going to deliver the America First agenda."

President Trump offered his congratulations, saying on social media that the bill's passage was a "Big First Step Win for Speaker Mike Johnson." Trump also called on lawmakers to "start to BALANCE THE BUDGET. IT CAN BE DONE!!!" - a bit of a surprise given that neither the House bill nor a competing Senate bill comes anywhere close to balancing the budget.

Massie, the sole Republican holdout, stuck to his guns, saying he couldn't support the bill because the budget plan would make the debt and deficit worse. Explaining his position before the vote, he said: "If the Republican plan passes under the rosiest assumptions, which aren't even true, we're going to add $328 billion to the deficit this year, we're going to add $295 billion to the deficit the year after that, and $242 billion to the deficit after that, under the rosiest assumptions. Why would I vote for that?"

Democrats, meanwhile, criticized the bill in stark terms. "They chose their billionaire puppet masters over the American people," said Minority Leader Hakeem Jeffries. "Democrats were unified, and we will remain unified throughout this process, because this reckless Republican budget will bring nothing but destruction to the American people."

What's in the bill: The budget blueprint defines the general limits for a more detailed budget bill the House plans to write by April. It authorizes $4.8 trillion in tax cuts and spending increases over 10 years, along with as much as $2 trillion in spending cuts. It would also allow Congress to increase the deficit by $2.8 trillion and raise the debt ceiling by $4 trillion.

The largest spending cut falls under the Energy and Commerce Committee. No further details have been decided upon at this point, but given the programs that are overseen by this particular committee, it seems a safe bet that much of the spending reduction will have to come out of Medicaid. Although Trump has vowed not to touch the country's healthcare programs, Medicare could also see reductions.

Other spending cuts called for in the bill include at least $330 billion by the Education and Work Force Committee, which could affect student loan and school lunch programs; at least $230 billion by the Agriculture Committee, which could hit food assistance; and at least $562 billion from other committees that are not named.

In terms of spending increases, the blueprint calls for $200 billion more for the Judiciary and Homeland Security Committees, which include Immigration and Customs Enforcement and U.S. Customs and Border Protection; and $100 billion for the military.

Much more work ahead: The House cleared an important hurdle on Tuesday, but there will be more challenges in the coming weeks. One potential stumbling block is the duration of the extension of the 2017 tax cuts. The House plan would not make the tax cuts permanent, but Republicans in the Senate and Trump say they want a bill that would. "I hope the House and Senate are able to agree on making the Tax Cuts PERMANENT!" Trump said on his social media platform Wednesday.

More broadly, defining which programs are to be cut could be difficult, especially as it becomes clear that popular and widely used programs are coming under the knife. The House must reach an agreement with the Senate, as well, providing another source of potential delay and difficulty in the coming months.

Trump Holds First Cabinet Meeting

President Trump held the first meeting of his Cabinet Wednesday, and the portion of the meeting open to the press provided some insights into the still-developing dynamic and direction of the new administration. Here are a few highlights:

* Elon Musk, who is not a member of the Cabinet, was the first to speak other than Trump. Wearing a t-shirt reading "Tech Support," the DOGE overseer said his main goal is to cut the deficit, which he said threatens to "bankrupt" the country. "That's the reason I'm here. And taking a lot of flak, and getting a lot of death threats, by the way," he said.

* Asked about the fate of the million-plus federal employees who have not responded to Musk's request for a status update on their work, Trump said they may be fired. "I'd like to add that those million people that haven't responded to Elon, they are on the bubble. You know, I wouldn't say that we're thrilled about it," Trump said. He suggested that maybe the employees "don't exist." He also said he supported massive job cuts in the federal workforce because the country has declined dramatically. "The country has gotten bloated, fat and disgusting and incompetently run," he said, adding that the problem should be blamed on his predecessor.

* Commerce Secretary Howard Lutnick pitched the new "gold card" program that would allow wealthy investors to pay $5 million to obtain special green cards that pave the way to citizenship. Lutnick said the proceeds could be enormous, and the funds would be used to reduce the deficit and even eliminate the debt. "If we sell 200,000 of these Gold/Green Cards, that's $1 trillion to pay down our debt," he said. "That's why the president is doing it, because we are going to balance the budget, and we are going to pay off the debt under this president." Trump speculated that the proceeds could be as much as $50 trillion - "which means our national debt is totally paid off, and we have $15 trillion above that," he said. (Peter Baker of The New York Times noted that Trump has promised to pay off the national debt before, including during his 2016 campaign. "Instead, during his first term, he added $8.4 trillion in new borrowing over 10 years," Baker wrote.)

* Trump said his plans to impose tariffs on trade partners around the world are moving ahead. He indicated that he could hit the European Union with a 25% tariff targeting "cars and all other things." He also claimed that the EU "was formed in order to screw the United States; I mean, look, let's be honest."

Chart of the Day: No Slowdown in Spending

Despite a lot of talk about the success Elon Musk and DOGE are having in slashing federal contracts and eliminating "waste, fraud and abuse" in government spending, their achievements aren't showing up in the aggregate data quite yet. According to Reuters Wednesday, the "U.S. government spent more during President Donald Trump's first month in office than it did during the same period a year ago, in a sign his cost-slashing effort has yet to reduce the nation's heavy fiscal obligations."

Federal spending between January 21 and February 20 totaled $630 billion in 2024, but rose to $710 billion this year during the first month of the Trump administration. DOGE claims to have "saved" $65 billion so far - the "Wall of Receipts" is here - but it's not showing in the data, buttressing claims from critics that many if not most of the savings are specious.

"Musk's cost-cutting operation claimed last week that it had saved $55 billion through canceled contracts and property leases, but has since appeared to acknowledge that many of the cuts saved less money than originally claimed," Reuters says. "An update released on Tuesday had either removed or lowered the cost savings for 170 contracts by a total of roughly $3 billion ... Savings on one USAID contract, for example, dropped from almost $655 million to 35 cents."

 

Number of the Day: $38 Billion

Even as he helps drive what could be the most significant reduction in the size and scope of the U.S. government in history, tech billionaire Elon Musk continues to be the beneficiary of billions of dollars in federal spending. A new Washington Post analysis of Musk's organizations, which include Tesla and SpaceX, found that "Musk and his businesses have received at least $38 billion in government contracts, loans, subsidies and tax credits, often at critical moments."

The payment stream goes back more than 20 years and accelerates sharply in the last 10. Starting in 2021, Musk's contracts with the federal government exceeded $4 billion each year, rising above $6 billion in 2024. And the annual and total amounts are probably larger, the Post says, because some of the work involved is classified.

"Not every entrepreneur at this scale has been this dependent on federal money - certainly not Nvidia, not Microsoft, nor Amazon, nor Meta," Jeffrey Sonnenfeld, professor at the Yale School of Management, told the Post, noting that much of the money has flowed during Democratic administration. "With DOGE, there does seem to be a paradox there. He has been a big beneficiary of national industrial policy, especially Democrat industrial policy, through government funding."

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