Are Republicans Going to Slash Medicaid?

Speaker Mike Johnson
Sipa USA
By Yuval Rosenberg and Michael Rainey

Happy Thursday! President Trump hosted British Prime Minster Keir Starmer today and told reporters afterwards that Starmer had worked hard to convince him not to impose tariffs on products from the United Kingdom. Trump did, however, announce that he plans to impose tariffs on Canada and Mexico next Tuesday - and double the tariff on imports from China. Here's your evening update.

Are Republicans Going to Slash Medicaid?

House Speaker Mike Johnson insisted Wednesday night that Republicans are not going to cut Medicaid, Medicare or Social Security as part of their effort to slash trillions in government spending. The budget outline narrowly passed by House Republicans this week directs the Energy and Commerce Committee to come up with savings of at least $880 billion over 10 years - and Medicaid, which provides health coverage to more than 70 million people, is expected to be the main source of those cuts. The numbers don't really work otherwise.

But in an interview with CNN's Kaitlan Collins, Johnson said Republican lawmakers and President Donald Trump were on the same page on the issue and would not be seeking massive cuts. "The White House has made a commitment - the president has said over and over and over, we're not going to touch Social Security, Medicare or Medicaid," Johnson said. "We've made the same commitment. Now, that said, what we are going to do is go into those programs and carve out the fraud, waste and abuse and find efficiencies."

Earlier in the day, Trump said the three major social safety net programs won't be cut, except that fraud would be targeted. "I have said it so many times, you shouldn't be asking me that question. Okay?" he said to a reporter who asked if he can guarantee that Medicare, Medicaid and Social Security won't be touched. "This will not be 'read my lips.' It won't be 'read my lips' anymore: We're not going to touch it."

Democrats don't believe it.

"The Republican budget will set in motion the largest cut to Medicaid in American history," House Minority Leader Hakeem Jeffries said at a Thursday news conference. "Children will be hurt. Families will be hurt. Seniors will be hurt. Everyday Americans with disabilities will be hurt. Hospitals will be hurt. And nursing homes will be hurt all across America."

Jeffries said Democrats are prepared to go after waste, fraud and abuse, but he challenged the GOP. "Republicans are lying," he said. "Prove me wrong. There's nothing that we as House Democrats would like better than for the Republicans to prove us wrong - that they are not planning to cut Medicaid."

Some House and Senate Republicans are reportedly also pushing back against the possibility of Medicaid cuts, fearing that such a move could erode their gains with working-class voters and cost them their seats - and cost the party its congressional majorities.

The math leaves Republicans few options if they want to enact all of their tax and spending cuts.

Johnson said that Medicaid loses about $50 billion a year to fraud, and CNN's Collins noted that Medicare and Medicaid make about $100 billion a year in improper payments. She asked where the other $780 billion in savings would come from. Johnson said that Republicans would be looking across all of government and that the Energy and Commerce Committee has the broadest jurisdiction of any congressional committee. "Everybody just reserve judgement, watch us work, and you'll like the final product," he said, later adding, "We're not going to cut benefits for people who are rightfully deserving."

Johnson indicated that work requirements for Medicaid would be part of the solution, but he said that per capita caps on federal Medicaid funding or reductions to the federal matching funds to states would not be affected.

That would leave Republicans scrambling for more savings. Estimates by budget analysts suggest that adding work requirements to Medicaid could save about $100 billion, The Washington Post's Hannah Knowles and Marianna Sotomayor report. They note, as others have, that the Energy and Commerce Committee could slash all the non-healthcare spending it oversees and would still fail to hit its $880 billion target.

The options Johnson ruled out could provide more savings - albeit at a human cost. A new analysis by the Urban Institute finds that imposing per capita caps and eliminating enhanced federal matching funds would cut federal spending by as much as $1.7 trillion over 10 years - and shift those costs to states, which would have to increase their Medicaid spending, perhaps by more than a third. "To offset the lost federal Medicaid revenue," the report says, "states would have to consider a range of policy options, including increasing taxes, shifting state spending away from education and other priorities, cutting Medicaid provider payment rates, and reducing benefits for Medicaid beneficiaries, including disabled and aged populations."

Trump Says Tariffs on Canada, Mexico Will Start Next Week, Plus a 10% Increase on China

President Trump said Thursday that he intends to impose 25% tariffs on Canada and Mexico and an additional 10% tariff on goods imported from China, starting next week on Tuesday, March 4.

In a post on his social media platform, Trump said the new tariffs are a punitive response to the countries' roles in the fentanyl trade.

"Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China," Trump said.

The new tariff on China comes on top of a 10% levy imposed earlier this month. The tariffs against Canada and Mexico were announced earlier this month, but Trump delayed them for 30 days to give the countries time to respond to his complaints. Although both countries pledged to take steps to combat the drug trade and illegal immigration, it appears that their responses were unsatisfactory. (Yesterday, at his Cabinet meeting, Trump suggested that the tariffs on Canada and Mexico would take effect on April 2, but that date may apply instead to a new set of tariffs on countries in the European Union.)

According to The Wall Street Journal, Mexico is a major source of illegal fentanyl being smuggled into the U.S., and Mexican cartels often use chemical ingredients made in China. Some bootleg drugs are also made in Canada, but in much smaller quantities. Recent government data indicate that about 240 people are killed by fentanyl overdoses every day in the U.S., with about 86,900 fatal overdoses in the 12-month period ending September 2024.

Mexican President Claudia Sheinbaum addressed the tariff threat Thursday, saying she hoped they could be avoided. "As you know, he has his way of communicating," she told reporters at a press conference, referring to Trump, "but as usual, we have a cool head and optimism that we can reach an agreement."

Neither Canada nor China has responded to Trump's latest threat. Chinese officials are reportedly focused on a broader trade deal with the U.S. rather than the narrower issue of bootleg drug production and trafficking, and believe the county can handle the new tariffs, in part by shipping exports through other counties.

White House Planning Largest Layoffs Yet

The Trump administration on Wednesday ordered leaders in the federal government to begin to prepare for major layoffs and restructuring.

A memo from Office of Management and Budget Director Russell Vought and Office of Personnel Management Acting Director Charles Ezell directed the heads of departments and agencies to develop "reductions in force" and "agency reorganization" plans, due no later than March 13, 2025.

The 7-page memo provides guidance on how to create such plans, collectively referred to as Agency RIF and Reorganization Plans, or ARRP. Among other things, officials are advised to make "a significant reduction" in the number of federal workers by eliminating positions that are not mandated by statute; removing underperforming employees; allowing temporary positions to expire; and renegotiating "provisions of collective bargaining agreements (CBAs) that would inhibit enhanced government efficiency and employee accountability." They are also directed to reduce property holdings and overall budgets.

The White House also asked for a second set of reports from agency heads, due April 14, providing "a positive vision for more productive, efficient agency operations going forward." Those reports are to include organization charts, job descriptions and performance reports, as well as suggestions for moving federal offices out of Washington.

The memo says the hiring freeze put in place via a presidential memorandum in January is still in effect, as is the general rule going forward that any new hires would require four positions to be eliminated. The memo also provides a list of exclusions, including positions in law enforcement, border security, the military and the U.S. Postal Service.

Make way for DOGE: It appears that Elon Musk and his DOGE teams nestled throughout the government are playing a key role in the effort. The memo directs agency heads to "collaborate with their Department of Government Efficiency ('DOGE') team leads within the agency in developing competitive areas for ARRPs."

There are indications that the layoffs and restructurings will be significant. The Washington Post reports that leaders at the Social Security Administration are under orders to reduce their staff by half, while the Labor Department is looking for a 90% reduction.

Max Stier of the Partnership for Public Service, a nonpartisan group that advocates for a stronger federal government, told the Post that the new plans suggest that the White House is seeking to fundamentally transform the nature of the federal government. "They are setting the groundwork for a much more scaled attack on the federal workforce," he said. "It seems like they are using this to reshape the purpose of the government rather than execute it more efficiently."

And Leigh Ann Caldwell of Puck News reports that a trusted source with insight into the Trump administration suggested that, while DOGE wants to save money and eliminate "woke" programs, its real goal is to dismantle the administrative state - or in the source's words, to "break shit."

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