Republicans in the Senate are facing significant divisions over strategies to reduce costs related to home-based laws that support President Trump’s agenda, which Elon Musk has derided as “a peep of disgusting pork.”
In light of backlash from the unpredictable bond market and ongoing mask mandates, GOP legislators are exploring new methods to diminish deficits, focusing on potential cuts to Medicare, the Department of Defense, and the Federal Reserve.
However, fresh proposals continue to widen existing rifts.
Senator Josh Hawley (R-Mo.) cautioned his peers against slashing Medicare funding, even as proponents of such cuts argue that the program is plagued by “waste, fraud, and abuse.”
“I don't like the idea of altering Medicare at all,” Hawley stated. “I believe that is a poor choice. We should refrain from such actions. I’ve voiced my concerns on this matter.”
“What about limiting drug prices instead? Why should the [Centers for Medicare & Medicaid Services] be involved in covering prescription costs? Why is Medicare exposed to this?” he questioned.
Other Republicans advocate for Medicare Advantage Plans provided by private insurance firms as an alternative to conventional Medicare, asserting that “all night” healthcare providers exploit the federal program.
Senator Roger Marshall (R-Kan.) mentioned he is considering a proposal put forth by Senator Bill Cassidy (R-La.) aimed at saving lawmakers up to $275 billion by imposing stricter regulations on Medicare advantage plans.
“No one is more concerned about our government bonds than I am. I aim to cut expenses with this bill. If it were up to me, we would reduce from $7 trillion to $6.5 trillion annually,” Marshall suggested, advocating for a $50 trillion deficit reduction over the next ten years.
Some Republicans are requesting a detailed review of defense expenditures, claiming that the Department should also see budget cuts in line with other agencies.
The House-approved bill includes $150 billion in fresh funding for the Department of Defense for new initiatives, such as Trump’s “Golden Dome” missile defense shield. However, fiscal conservatives argue that the defense budget is bloated.
Senator Rand Paul (R-Ky.) criticized the defense hawks for having a “hidden agenda” that utilizes Trump’s expansive budget to promote military spending beyond sustainable limits.
“For those of us who advocate for financial accountability, tax reductions, or both, this proposal is disappointing. It will ultimately turn into a spending bill, with an injection of $150 billion. [What] they were already increasing military expenditure through the standard budgeting process,” he asserted.
“If you are financially conservative, you need to apply that principle universally. You can’t inflate the military budget,” he emphasized.
Marshall indicated that military spending cuts could be beneficial as well.
“I am among the few Republicans who think they have sufficient funds for defense,” he stated.
Despite this, any reductions in the Pentagon budget are likely to face strong opposition from Senate Armed Services Committee Chairman Roger Wicker (R-Miss.) and Defense Budget Committee Chairman Mitch McConnell (R-KY.), who contend that Trump’s defense allocation is inadequate.
Earlier this year, Wicker advocated for the inclusion of $175 billion in new defense funding in the appropriations package but later accepted a $150 billion figure.
McConnell is scheduled to confer with Secretary of Defense Pete Hegsett regarding Trump’s defense budget request on Tuesday.
Senator Ted Cruz (R-Texas) proposed ceasing interest payments to banks that deposit funds in the Federal Reserve.
This move has already encountered backlash from the banking sector, as the industry has come to depend on these payments for stable cash flow.
Strategists at JPMorgan Chase & Co. have warned that eliminating interest payments could disrupt financial markets, predicting that such proposals may not advance.
The House of Representatives’ $267 billion spending bill, which cuts nearly $800 billion from Medicaid and the Supplemental Nutrition Assistance Program, faces opposition from Senators Susan Collins (R-Maine), Lisa Markowski (R-Alaska), and Jerry Moran (R-Kan.).
Provisions aimed at ending renewable energy tax credits could jeopardize millions in investments in Republican-majority states, like West Virginia, where clean hydrogen hubs may lose funding if construction doesn’t begin by the year’s end.
Senators Thom Tillis (R-N.C.), John Curtis (R-Utah), and Shelley Moore Capito (R-W.Va.) have issued warnings about phasing out these clean energy tax benefits.
Conversely, conservatives like Senator Mike Lee (R-Utah) argue that the bill does not go far enough to block Medicaid benefits for undocumented immigrants.
“We’re discussing Medicaid. We’re talking about the Earned Income Tax Credit, child tax credits, and the eligibility to claim dependent benefits for tax purposes. These discussions should not involve non-citizens or illegal immigrants,” Lee told The Hill.
Lee claimed that the House bill fails to fully restrict federal benefits for undocumented immigrants, asserting, “that’s the core issue.”
Meanwhile, Scott contends that subsidies to the Clean Energy Program must be quickly terminated to mitigate the deficit.
“We are facing a financial crisis,” he stated. “Balancing the budget is imperative.
“We must entirely eliminate the Green New Deal. That’s my top priority,” he declared.
Source: thehill.com