Republican leaders are rapidly running out of ways to pay on President Trump’s agenda as GOP lawmakers shoot down various proposals to cut their spending and make money.
Without finding some new ideas, the GOP risks adding trillions of dollars to future deficits by passing on the Trump agenda.
Outside observers have expressed pessimism that lands on ideas that Republicans have sufficient support to be passed on to the law.
“I haven’t seen them getting money. There’s no ‘there’ there.’ To be very honest about that, if they want to spend money, they’re going to put it on debt,” said Sen. Judd Greg (NH), who previously served as Republican chair of the Senate Budget Committee.
“They are not going to take it out of the tariffs. You have it [White House trade adviser Peter] Navarro runs around saying they are planning on earning $600 billion in tariff revenue. That’s ridiculous. It’s a basic economy. You raise that price and people stop buying it,” he said.
“It’s all a joke, and to be honest with you, when it comes to saving money and reducing your debt,” he added. “This president doesn’t really care about debt.”
Maya MacGuineas, chairman of the Responsible Federal Budget Committee, said lawmakers need to withstand political blows and make significant cuts despite reducing some profits.
“If you remove all the big money from the table, it can be very difficult to find enough savings to offset the tax cut by $4, $5 trillion or even more.
“People say you can’t touch benefits to anything and you can’t raise taxes. Okay, then we’ll have a debt crisis. That’s the result of not talking about benefits or taxes,” she warned.
The most ambitious plan has emerged so far, and now appears dead after 12 House Republicans this week informed leadership this week that they would not support a bill that includes cutting Medicaid compensation for a vulnerable population.
Republicans who balked with Medicaid cuts say they’re willing to support the program’s new work requirements. But it will achieve limited savings.
Budget experts say that Elon Musk’s government efficiency (DOGE)-recommended discretionary spending cuts that need to be approved through a vote by Congress will save relatively few money in the long run compared to the enormous forecast costs on Trump’s agenda.
So far, Musk hasn’t come close to finding the trillion dollar cut he said he first found. Even if his Doge team cut all the de-escaping centers, discretionary federal funds (almost all the money allocated by non-Pentagon Congress on an annual basis would be $50 billion below his target.”
Musk has since said it has significantly reduced its budget cut targets for next year, and is expecting $150 billion in savings from waste and fraud reductions.
“This Doge group throws a lot of smoke, but they basically do it with little candles,” Greg said. “They are basically chasing the slight discretionary event that produces very small savings. So they’re not going to get it from discretionary accounts. They get some, but that’s not big.”
He called the whole practice “a lot of glamour and almost a substantial.”
Trump has ruled out a significant reduction in two biggest drivers of federal debt, Social Security and Medicaid, as well as cutting veteran health programs and military retirement benefits.
Some Trump allies have come to mind raising the fees for top income tax brackets from 37% to 39.6%, or creating new 40% brackets for those who have made more than $1 million, but those ideas hit harsh opposition from Senate Republicans.
“I am very opposed to raising taxes,” Sen. Ted Cruz (R-Texas) said last week when asked about tax increases for wealthy people.
Speaker Mike Johnson (R-LA.) and Senate majority leader John Tune (Rs.D.) pledged at a press conference on April 10 to cut short by at least $1.5 trillion, to cut the deficit in the budget adjustment bill that will be handed over to acquire borders, as well as increase defence spending and extend the 2017 Trump tax cut.
They made a promise to ease the Finance Hawks in a home led by Chip Roy (R-Texas) and Andy Harris (R-Md.), who threatened to vote against the Senate’s amended budget resolution.
Extending Trump’s expiration of 2017 tax cuts adds an estimated $4.6 trillion to his debt over the next decade.
Additionally, Republicans in the House and Senate are urging the federal government to spend between $20 billion and $350 billion to secure borders and between $100 billion and $150 billion to strengthen defense spending.
Next is the new tax credit proposals Trump has placed on the table, including protecting Social Security benefits from tax-exempt income, which costs between $150 and $250 billion over a decade and $1.5 trillion in 10 years.
Budget experts say negotiators will have a very difficult time finding $1.5 trillion in savings.
“We’re a great leader in our efforts to help people understand how we’re doing,” said William Hoagland, senior vice president of the Center for Bipartisan Policy, who served as Republican Staff Director for the Senate Budget Committee. “I don’t know how to do that.”
He said implementing new Medicaid work requirements will save only an estimated $100 billion over a decade.
He then warned that “it’s very difficult to define what waste, fraud, and abuse is.”
“If you define wasteful spending as something like provider tax,” he says, referring to budget gimmick states that health care providers use to secure more federal Medicaid funds through taxation and reimbursement, which could lead to a lot of political opposition.
“That could be a big number. It could be a $500 billion to $600 billion could be enough. [in savings]but I think most people would say it will lead to a decline in profits, so I think the provider tax is off the table,” he said.
The Responsible Federal Budget Committee estimates that banning so-called Medicaid provider tax gimmicks will save $720 billion over a decade.
Limiting these taxes to 2.5% of the provider’s revenue would save $285 billion, while limiting 10% of the state’s general funds would save $350 billion, according to the group’s forecast.
Sen. John Cornyn (R-Texas), a member of the Senate Finance Committee, spoke about eliminating tax “expenses” or niche tax credits that benefit special districts, such as mortgage interest deductions.
However, each of these special tax credits has a voice constituency, and the larger the tax credits, the stronger the special benefits of lobbying for them.
Republican negotiators are most likely to eliminate the electric vehicle (EV) tax credit, the signature result of President Biden’s Clean Energy Agenda. The EVS’ $7,500 consumer tax credit was identified by Trump’s transition team in November as a offset to tax reform.
Other clean energy tax credits enacted by the Biden Inflation Reduction Act (IRA) can similarly pay Trump’s tax priorities to eliminate renewable electricity production tax credits, energy investment tax credits, clean electricity tax credits, and production tax credits.
But even these tax credits, which were considered low-hanging fruit, have supporters in the GOP.
Four Republican senators, John Curtis (Utah), Tom Tillis (NC), Lisa Markowski (Alaska) and Jerry Moran (Kansas), sent a letter this month warning from the IRA that eliminating the energy tax credit would hurt business and work.
“We support financial liability and careful efforts to streamline tax laws, but we warn against the full-scale abolition of credit today.
Massive cuts to defence spending also face solid opposition in Capitol Hill.
Senate Armed Services Committee Chairman Roger Wicker (R-Miss.) has insisted on providing at least $150 billion in new spending to the Pentagon to maintain its US defense capabilities.
A Senate Republican source said the $150 billion new defense funding was the “lowest” for the budget adjustment package.
Another potential pot of savings can result from cracking down on so-called inappropriate payments in Medicare, Medicaid, and other parts of government.
However, tracking and eliminating these inappropriate payments requires large federal spending in advance to fund personnel to do labor-intensive work.
For example, the Government’s Office of Accountability discovered $51.1 billion incorrect payments in Medicare and $50.2 billion in Medicaid in 2023.
Hoagland said policymakers can find a savings of about $2 for every dollar spent eradicating inappropriate payments.
However, it is still difficult to find a way to find $1.5 trillion in savings over a decade without affecting profits.
Hoagland said the House Energy and Commerce Committee, appointed by the joint budget resolution that granted a $880 billion deficit cut, “we must look at something other than healthcare” to reach that goal.
He said it would need to consider selling federal assets, such as radio frequency spectra.
