Trump budget

Republicans also seek to increase national debt to fund tax breaks for wealthy

By Alexander J Schorr

Image: Cc by NC-ND via Bing

February 24, 2025 (Washington D.C.) – Republican senators pushed a $340 billion budget framework to passage early Friday that would give massive new tax cuts to wealthy people and corporations, while slashing Medicaid and other programs benefitting vulnerable Americans.The budget passed  the Senate in spite of an all-night session during which Democrats raised numerous objections, including to  releasing money that the Trump administration says is required for mass deportations and border security. The budget now heads to the House of Representatives for a vote.

The budget includes $4.5 trillion in tax cuts, a $4 trillion increase in the debt limit, and aims to slash $1.5 trillion from social programs while boosting spending on border security and the military.

The hours-long process trudged through a critical part of the budget process as senators considered one amendment after another to the budget proposal. Republicans, largely on party-line vote, passed the budget 52-48, with all Democrats and one GOP senator opposing it.

One supporter, Senate Budget Committee Chair Lindsey Graham (R-South Carolina), said “What we're doing today is jump-starting a process that will allow the Republican Party to meet President Trump’s immigration agenda.” 

Senator John Barrasso (R-Wyoming), the number two ranking Senate Republican, said that GOP lawmakers are acting quickly to get the administration the resources they have requested and need to curb illegal border crossings. “The budget will allow us to finish the wall. It also takes the steps we need toward more border agents,” Barrasso said. “It means more detention beds… It means more detention flights.”

GOP leadership insists that “the whole thing,” in this case, “The Wall” along the U.S.-Mexico border will be paid for, rather than piled onto debt, with potential spending cuts and new revenues. The committees are expected to consider rolling back the Biden Administration’s methane emissions fee, which was approved by Democrats as part of climate change strategies in the Inflation Reduction Act, and are hoping to draw new revenue from energy leases as they aim to spur domestic energy production.

One amendment that was accepted after several hours of debate was actually a Republican effort to deflect criticism that the package would be paid for by cutting safety net programs. The amendment from Senator Dan Sullivan (R-Alaska) said that Medicaid and Medicare would be strengthened during the budget process. 

Democrats pushed a vote to prevent tax breaks for billionaires, an amendment that was repeated in various forms throughout the night but failed to get enough votes. House Democrats argue that the GOP tax cuts approved in 2017 flowed to the wealthiest Americans, and extending them as Trump wants Congress to do later this year would prolong the gratuity. Even though the billionaire  amendments failed, they picked up some Republican support; Susan Collins of Maine voted for several of them, and Senator Josh Hawley of Missouri voted for another.

Senate Minority Leader Chuck Schumer, a Democrat, launched a strategy early this week to use the budget to focus debate on the impacts of the tax policy and the Trump Administration's Department of Government Efficiency (DOGE), which is slashing programs and personnel across the federal government. 

Senator Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee, said that the single biggest driver of the national debt since 2001 has been a series of Republican-led tax cuts for the very wealthy. She stated, “You’ll never guess what our Republican colleagues on the other side of the aisle are focused on right now, nothing to lower the cost of eggs, it's actually more Republican tax cuts.” She called the budget plan a “roadmap for painful cuts to programs [which] families count on each and every day, all so they can give billionaires more tax cuts.” This information was available by the Associated Press.

House Majority Leader Steve Scalise scheduled a vote this week on the budget resolution, after the House Budget Committee adopted it alongside party lines last week. In order to appease some conservative holdouts and get resolution over the finish line, House GOP leaders made adjustments that would affix up to $2 trillion in spending cuts, even though committees would have to work out the details of such a matter. 

That puts some programs like Medicaid in danger, which has already raised concerns from some Republican members. The House bill also calls for $4.5 trillion in tax cuts over the next decade. These include renewing the Trump tax cuts enacted in 2017 as well as adding other provisions Trump campaigned on, such as no tax on tips, overtime or social security. Some Senate Republicans want to make the 2017 Trump tax cuts permanent.

While Republicans in the House and Senate disagree on the strategy of one bill versus two bills to implement in Trump's agenda, they are united in using budget reconciliation to pass the legislation with only Republican support. Reconciliation is a budget tool that enables some legislation to pass with just a simple majority and avoid the issue of a filibuster, which requires 60 senators to overcome; this is the same process that enabled congressional Democrats to pass parts of former President Joe Biden’s agenda.

According to NPR, negotiations on the budget reconciliation package are expected to become more difficult to overcome in the coming months, as committees craft detailed provisions impacting government programs and tax policy; leaders are speeding ahead to complete action to get a package that both the House and Senate can pass before the end of the year, when Trump’s 2017 tax cuts expire.

Programs like Social Security, food and rental assistance, Child Tax Credit and Earned Income Tax credit lifted more than 34 million people above the poverty line 2023. They are also largely responsible for the 29.7% to 12.9% in poverty rate drop between 1967 and 2023, according to a CBP analysis which utilized the more comprehensive of the Census Bureau’s two poverty measures. Medicaid also provides health coverage for over 70 million people, giving access to healthcare and reducing debt and medical costs. Economic security supports are effective in the decreasing of differences in child poverty between racial and ethnic groups.

Cutting Supplemental Nutrition Assistance Program benefits (SNAP), which is currently $6.20 per person a day on average, and shifting part of the cost of benefits to states would increase food insecurity and poverty. Shifting even a smaller portion of SNAP benefit costs to states would and will strain state budgets, forcing cuts in eligibility and benefits overall. This would include during the event of a recession, when hardships rise and state revenues fall. Preventing potential and future updates and resolutions to SNAP benefits to ensure that people are afforded an adequate diet, or reversing the most recent updates, would increase poverty as well. A 2021 update, the first in decades to account for changes in the scientific evidence on the makeup of a healthy diet, was estimated to lift more than 2 million people above the poverty line, according to the Urban Institute, with the largest poverty reductions for Black and Latino people. 

In Programs like Medicaid, SNAP, and rental assistance, most people who can perform paid work already do so. Taking assistance away from people who cannot document that they are complying with a work amount requirement does not increase employment, research shows, but will increase poverty and hardships for citizens. An Arkansas experiment with Medicaid work requirements found no evidence that the policy increased work, but one in four of those subject to the requirements lost coverage. The Child Tax Credit, now worth up to $2,000 per child, reduces child poverty. Denying the credit to children who are U.S. citizens if their parents lack a Social Security Number (SSN) would increase poverty among children, especially for Latino children, hurting children’s long-term objectives in contributing to the economy as adults.

Additionally, Reducing Supplemental Security Income (SSI) benefits for the low-income disabled children with conditions like Down Syndrome, Autism, blindness, deafness, and cerebral palsy, if another member of the family also receives SSI, this could push many further into poverty. Those families who care for children with disabilities, especially those with more than one disabled child, are more likely than other families to be poor and face more financial and material hardships.

Slashing funding for the Temporary Assistance for Needy Families (TANF) program, which sends funds to states to provide basic cash assistance and services like child care to low-income families, would further limit this program’s reach in responding to poverty levels. Only about one in five families below the poverty line receive TANF assistance.

According to the Center on Budget and Policy Priorities, the agenda represented by The Trump proposals would make millions of people worse off while extending and expanding tax breaks for wealthy households and businesses. Congress could expand rental assistance to reach more people who struggle to afford housing, close the Medicaid “coverage gap,” and expand Child Tax Credit for the 17 million children who don’t get the full credit because their families’ incomes are too low,but the Republican Majority refuses to do this.

Social Security and Medicare are largely off limits due to their popularity with seniors, even if the programs are costly. That makes Medicaid, the largest single source of funding for medical and health-related services to 72 million low-income and medically disabled Americans, a prime target. The House Republican budget plan directs the Energy and Commerce Committee, which oversees Medicaid, to find $880 billion in offsetting spending cuts over the next ten years. On February 19, President Trump publicly endorsed the plan. Although Trump will likely need to garner the votes he needs, it won’t be simple, as significant cuts to Medicaid will be fiercely opposed by powerful interest groups, including hospitals, doctors, managed care plans, the nursing home industry, and patient advocacy groups. Additionally, with a narrow majority in the Senate, Republicans have few votes to spare.

Congress must also consider the impact that Medicaid cuts will have on their voters; three days before Trump endorsed the House Republican budget plan, Steve Bannon, a former Trump advisor, warned Republicans of the political risks. “Medicaid, you gotta be careful,” He told listeners to his podcast, “because a lot of MAGAs are on Medicaid, I’m telling you.” Due to this complication, a split has already opened in the Republican Caucus, according to the Wall Street Journal.

Another reason for Congress to reconsider Medicaid slashing or aborting the Affordable Care Act (dubbed ObamaCare), is that the cuts will do nothing to reduce the costs of healthcare in the United States. It will make healthcare more expensive and harder to obtain; according to a recent Gallup poll, this should be a concern for Congress, as affordability and access are America's top two healthcare concerns.

On average, uninsured Americans get only about half of the preventive services and medical coverage insured Americans receive. According to Forbes, Existing safety-nets are not sufficient to overcome the gap between those with health insurance and those without. The consequences economically are grim; if one family member lacks coverage, the entire family is exposed to financial burden of severe illness or injury. If states were to scale back their Medicaid programs and push larger numbers of beneficiaries off the rolls, then more rural hospitals, safety net clinics, and public hospitals will close their doors to them. When those patients who were previously assisted by these institutions have nowhere to go, many will turn to private hospital ERs for treatment, and, if needed, hospitalizations. Throughout the decades, hospitals have charged privately insured patients more to offset the costs of treatments for patients who cannot pay. If private insurance companies refuse to capitulate, more facility closures will follow. In the end, everyone will face higher healthcare costs; additionally, access to care will decline for insured and uninsured alike.

This controversial and damaging decision, which is pulled directly from the Project 2025 playbook, would strip Americans of trillions of federal funding dollars; these are funds that help people keep their electricity on, sustain clean drinking water, aid communities recovering from floods and wildfires, where state Tribal governments are required to deliver service to communities, and much more. It shall put roughly 2,600 federal programs at risk, and with it, the livelihood of millions of Americans. 

Even if the budget does not pass the House, President Trump has threatened to withhold federal aid from key programs and risk a potential government shutdown.

In what is referred to as the “Appropriations Clause,” the U.S. Constitution gives the spending “power of the purse” to Congress, not to the President. It states: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” The clause underscores an aspect of the system of checks and balances that make up the government and prevents the executive branch from spending money without Congressional oversight and approval. 

Additionally, should President Trump enforce this spending without Congress, these actions may violate the U.S. Impoundment Control Act of 1974. While this act allows some limited presidential control over funds, it explicitly prohibits a president from withholding funds, also known as “impoundment,” even if that president disagrees with the policy objectives related to spending. The Office of Management and Business (OMB) memo directing funding cuts is doing precisely that.

There has been obvious court action against this behavior; in one case the states argue that Trump’s executive actions are plainly illegal, where the judge is likely to issue a restraining order. In another scenario, nonprofit groups who use federal funds have already secured a near-term stay of the administration's actions; the legal and political landscape continues to change hour to hour.

President Trump’s cuts may shut down dozens of programs that reduce the cost of housing for everyday Americans, including loan guarantees that keep mortgage rates lower. The president may also gut the Home Energy Rebate programs and the Weatherization Assistance Program, which helps families save money by upgrading their homes to be more efficient and healthier, permanently lowering utility bills. The funding cut may also slam the brakes on vital clean transportation programs like the National Electric Vehicle Infrastructure Program (NEVI), which provides states with funding to deploy a nationwide network of electric (EV) chargers to help make EVs more accessible, practical, and a money saving option for all Americans, all while addressing air pollution, carbon emissions, and  EV range anxiety for all drivers. Additionally, the  NEVI program can tackle pollution in communities of color, which would undoubtedly lose money and protections.

Non-profit organizations, like those serving climate and environmental justice communities, have already been blocked from the federal system that allows them to access grant money. Among the many programs being affected, Trump’s move could impede the Community Change Grants, which provided $2 billion to environment and climate justice projects which would help benefit disadvantaged communities. The president’s funding cuts disproportionately impact Tribal Nations and Native People, who receive a wide range of federal grants and loans. Looking specifically at the cross between Tribal governance and the environment, programs under financial threat could include climate resilience programs, wildlife grants, and energy programs delivering cleaner, safer, and more reliable energy that support Tribal governments to regulate environmental quality, and even more.

Trump’s Office of Management and Budget (OMB)  memo may potentially sever funding for countless infrastructure and manufacturing projects in communities across the country, jeopardizing tens of thousands of middle-class, union jobs. Those workers who repair roads, install broadband and so on will face layoffs and furloughs due to the Trump cuts. Apprentices learning their trade in federally supported programs will likely have their sessions and education interrupted and fractured, perhaps even permanently, with many being students in federally supported financial aid programs. These same cuts are a direct attack on current and future workers, students, and by extension, the economy at large. Additionally, according to Evergreen Action, extreme weather disasters like the flooding in North Carolina and the fires in California show us why competent governance is crucial and how federal grants and loans can help American citizens recover when disaster strikes. 

The Federal Emergency Management Agency (FEMA), which is vital to natural disaster response, is one of the programs on the president’s chopping block. Trump has repeatedly threatened to eliminate FEMA.  The Associated Press illustrates that presidents can currently authorize the reimbursement of some expenses at 100%, just as former president Biden did for the costs from Hurricane Helene and the California fires. About 6 in 10 voters in November’s election approved of how FEMA was handling its job, according to AP VoteCast; roughly 4 in 10 disapproved, yet the number was higher among Trump’s voters, as two-thirds of them said they disapproved of how FEMA was handling its job. Naturally, there are some facts to consider: FEMA encourages insured survivors to apply, and it does not duplicate assistance for damage that is covered by insurance but may cover other losses that insurance may not. If FEMA funds arrive before an insurance settlement, one can use the FEMA money as a bridge loan until insurance settlement arrives. You would have to repay FEMA for any duplication in benefits. Also, a homeowner who lived in the home at the time of the disaster may be eligible for funds to repair the area of their home damaged by the disaster, even those areas that have pre-existing damage. Moreover, applying for disaster assistance does not grant FEMA or the federal government authority or ownership of your property or land. By slicing funding for FEMA entirely, President Trump runs the risk of disproportionately affecting millions of homeowners, and predisposing them to poverty and death.

The president is cutting off opportunities just as America is hitting its manufacturing resurgence. Federal funding under the Inflation Reduction Act propelled $110 billion of private investments and created 90,000 manufacturing clean energy industries. Blocking federal funding, such as the nearly $400 million Pennsylvania clean manufacturing grant, will undermine our growing clean economy and deprive the Commonwealth of about 6,000 new jobs.The current presidential administration is going out of its way to stifle and kill off economic growth in service of a divisive culture war agenda. 

The budget bill could be voted on as early as today, but must be passed no later than March 14 to avoid a government shutdown.