Trump Struggles to Put Down GOP Rebellion Over Budget Plan

Speaker Johnson is still short on votes.
Sipa USA
By Yuval Rosenberg and Michael Rainey

Good evening. President Donald Trump's massive new tariffs, including a 104% levy on Chinese imports, are set to take effect tonight. Meanwhile, House Republican leaders had been hoping to take the next step toward enacting more of Trump's agenda tomorrow, but those plans now face major uncertainty amid blowback from House conservatives. Here's your Tuesday update.

Trump, Johnson Scramble to Drum Up GOP Support for Budget Plan

President Donald Trump and House Speaker Mike Johnson tried to quell a rebellion Tuesday among fiscal conservatives in the Republican conference who are withholding support for the Senate-passed budget framework needed to enact Trump's agenda centered on tax cuts. But the pressure campaign by the president and speaker has so far failed to line up the necessary votes, leaving Trump's "big, beautiful bill" stalled.

Johnson and Trump met with some of the holdouts at the White House Tuesday as the Republican leaders work to pass the budget resolution this week, before lawmakers leave Thursday for a scheduled two-week recess. Some of Johnson's members have refused to back the Senate-approved plan out of concern that the resulting legislation won't meet their demands for steep spending cuts.

The House version of the budget plan calls for $1.5 trillion or more in spending reductions over 10 years to help offset $4.5 trillion or more in tax cuts. The Senate instructions require only a minimum of $4 billion in reduced spending, though Republican leaders insist the final number will be far higher. Johnson has urged his members to approve the Senate-passed outline so that negotiations can proceed on the legislation detailing tax and spending changes.

A lack of trust among Republicans: House holdouts reportedly don't trust the Senate to deliver as much as $2 trillion in cuts - or don't believe that Johnson can win such concessions. The House formula is likely to require steep cuts to Medicaid, which some Republicans have balked at backing. Fiscal hawks are demanding firm commitments for spending cuts on the Senate side. In all, "several dozen" Republicans reportedly are threatening to vote against the Senate-passed plan.

"They are fine saying that there are unlimited tax cuts, but they are unwilling to say they will do spending cuts," Rep. Chip Roy of Texas, a leader of the ultraconservative House Freedom Caucus, told reporters. "The Senate has produced a budget that is phony math, and I'm not going to support it."

Another Freedom Caucus member, Rep. Ralph Norman of South Carolina, told reporters: "The trustworthiness of the Senate is suspect."

A test for Trump: Trump on Monday evening publicly called on lawmakers to back the Senate plan. "The Budget Plan just passed by the United States Senate has my Complete and Total Endorsement and Support. All of the elements we need to secure the Border, enact Historic Spending Cuts, and make Tax Cuts PERMANENT, and much more, are strongly covered and represented in the Bill," he wrote on social media. "THE HOUSE MUST PASS THIS BUDGET RESOLUTION, AND QUICKLY - MAKE AMERICA GREAT AGAIN!"

The president spoke privately with holdouts Tuesday, and he reportedly said he would push the Senate for steeper spending cuts. After the White House meeting, Johnson told reporters that he thought Trump had changed some minds. "I think we'll be moving forward this week," he said.

But a vote that had tentatively been planned for Wednesday is now uncertain. "I would be surprised if it comes to the floor," Rep. Andy Ogles said, according to The Hill. "There's so many 'no' votes. It's 30, 40. And what typically happens in this type of scenario, when you hit a critical mass, suddenly more people go ahead and vote their conscience. And so 30 can easily become 50."

Jeffries challenges Johnson to debate: As Republicans look for a path forward, House Minority Leader Hakeem Jeffries formally challenged Johnson to a "one-on-one debate" on Wednesday over the GOP budget resolution. Jeffries and Democrats have been arguing that the Republican plan would cut Medicaid, food stamps and other benefits to help pay for tax breaks for the wealthy.

"The American people deserve to know the truth," Jeffries wrote in a letter to the speaker. "I look forward to a one-on-one debate with you on the House Floor to fully and transparently explain and defend our differing budget values to the American people."

It might happen; Johnson told reporters he's happy to debate Jeffries anytime.

The bottom line: Amid the economic turmoil spurred by Trump's trade war, Republican leaders are eager to show progress on their agenda, but their budget resolution is still in limbo.

Trump Pushing Ahead With 104% Tariff on China

President Trump plans to increase his tariff on Chinese goods by 50 percentage points, raising it to a staggering 104% on virtually all imports from the manufacturing powerhouse, and the White House said Tuesday that the new levy would take effect at midnight tonight, as scheduled.

Trump says he is imposing the tariff in retaliation for a 34% tariff on U.S. goods imposed by China last week - which in turn was a response by Beijing to a new 34% tariff, on top of existing 20% tariffs, placed on Chinese goods by the U.S.

The huge increase imposed by Trump - coupled with China's vow Tuesday to "fight to the end" in the burgeoning trade war and a statement by the White House that the president "will not break" - dimmed hopes for a quick resolution in the rapidly developing battle. Investors on Wall Street pulled the plug on an attempted stock rally, with the S&P 500 closing 1.6% lower on the day - and down 12% over the last four days.

Lawmakers have questions: In an appearance before the Senate Finance Committee Tuesday, U.S. Trade Representative Jamieson Greer defended the tariff program as lawmakers asked him to explain the meaning and purpose of Trump's trade initiatives.

Greer said the tariffs were "already bearing fruit," with dozens of countries seeking trade deals. "Nearly 50 countries have approached me personally to discuss the president's new policy and explore how to achieve reciprocity," he said, adding that several countries have offered to reduce their own tariffs, including Argentina, Vietnam and Israel. (Earlier Tuesday, Treasury Secretary Scott Bessent put the number of countries seeking a trade deal at 70.)

Republican Sen. Thom Tillis said that from his perspective, it looks like "we've decided to begin a trade war on all fronts." He asked Greer who in the Trump administration should be held responsible - his exact words were, "Whose throat do I get to choke?" - if the tariffs fail and end up raising prices and slowing growth, as many economists have warned they would.

"I wish you well," Tillis told Greer. "But I am skeptical.''

Sen. Ron Wyden, the senior Democrat on the committee, asked Greer to explain the plan behind the tariffs. "In the last week, the White House has been all over the map when it comes to these tariffs. There is no clear message about how they were determined, what they're supposed to accomplish, how long they will be in place, whether they're a negotiating tool or a move to try and cut the United States off from global trade and usher in a new era of 1870s-style protectionism.''

Wyden also called on lawmakers to reclaim authority over tariff policy. "Donald Trump's aimless, chaotic tariff spree has proven beyond a doubt that Congress has given far too much of its constitutional power over international trade to the executive branch," he said. "It is time to take that power back."

Legislative moves: Wyden, along with Republican Sen. Rand Paul, released a resolution Tuesday that would repeal Trump's global tariffs by terminating the emergency Trump declared in order to exercise tariff authority.

"Tariffs are taxes, and the power to tax belongs to Congress-not the president. Our Founders were clear: tax policy should never rest in the hands of one person," Paul said. "Abusing emergency powers to impose blanket tariffs not only drives up costs for American families but also tramples on the Constitution. It's time Congress reasserts its authority and restores the balance of power."

A bipartisan pair of senators, Republican Chuck Grassley and Democrat Maria Cantwell, introduced a bill last week that would require congressional approval of new tariffs imposed by the president. Under the terms of the proposed legislation, if Congress failed to approve the tariffs, they would automatically expire after 60 days. The bill is not expected to go anywhere, though. Senate Majority Leader John Thune made his opposition clear, saying, "I don't think that has a future," and the White House said Trump would veto it if it did reach his desk.

Quotes of the Day

"When it comes to tariffs and trade, we all understand in the White House (and the American people understand) that Elon's a car manufacturer. But he's not a car manufacturer - he's a car assembler, in many cases. If you go to his Texas plant, a good part of the engines that he gets (which in the EV case are the batteries) come from Japan and come from China. The electronics come from Taiwan ... What we want - and the difference is in our thinking and Elon's on this - is that we want the tires made in Akron. We want the transmissions made in Indianapolis. We want the engines made in Flint and Saginaw. And we want the cars manufactured here."

− Trump trade adviser Peter Navarro, speaking to CNBC about the Trump administration's effort to boost industrial production in the U.S. Navarro added that building assembly plants like those run by BMW and Mercedes in South Carolina, which rely on parts made in Germany and Austria, "doesn't work for America."

"Navarro is truly a moron. What he says here is demonstrably false. ... Tesla has the most American-made cars. Navarro is dumber than a sack of bricks. By any definition whatsoever, Tesla is the most vertically integrated auto manufacturer in America with the highest percentage of US content."

− Tesla CEO and DOGE leader Elon Musk, responding to Navarro's criticism on social media, highlighting the tensions in the administration over the tariffs.

Musk is reportedly less than enthusiastic about Trump's plan and has called for a "zero-tariff situation" between the U.S. and the European Union instead, effectively creating a free trade zone. The Trump administration has been cool to the idea, even if it involves eliminating tariffs, since it would allow and even encourage production within the tariff-free zone, including areas outside the U.S.

Trump Administration Announces a Big Raise for Medicare Advantage

The Trump administration on Monday announced that payments for private Medicare Advantage plans are going to rise by 5.06% on average from 2025 to 2026, a higher-than-expected increase that is more than double the 2.23% rate proposed in January. The final increase is projected to add more than $25 billion in costs for the federal government next year.

The change is based on growth in per capita Medicare costs and additional data on recent healthcare spending, the Centers for Medicare & Medicaid Services said.

Analyst David Larsen of financial firm BTIG said that the change also has to do with the Trump administration: "The higher overall final rate is in line with our view that Republican administrations are generally more (Medicare Advantage)-friendly," Larsen wrote, according to the Associated Press. "While fraud, waste, and abuse are certainly a focus of the new administration, we view the final rate notice as a positive surprise."

A positive surprise for healthcare companies that provide Medicare Advantage plans, that is. "The more than 5% payment bump is an unexpectedly big win for UnitedHealth Group, Humana, CVS Health and Elevance, among other big insurers," Axios noted.

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