House Republicans Vote to Claw Back $9.4 Billion in Funding

Speaker Mike Johnson (Allison Bailey/NurPhoto)
Allison Bailey/NurPhoto
By Yuval Rosenberg and Michael Rainey

Good evening. Here's what we were watching today while enjoying the image of the pope wearing a White Sox cap.

House Republicans Vote to Claw Back $9.4 Billion in Funding for Foreign Aid, PBS and NPR

House Republicans on Thursday narrowly passed a White House request to claw back $9.4 billion in approved funding for foreign aid and public broadcasting. The 214-212 vote saw four Republicans join with Democrats in opposing the legislation, which now heads to the Senate. Two Republicans who initially voted against the bill, Reps. Don Bacon of Nebraska and Nick LaLota of New York, flipped to yes to provide the margin of victory for the GOP.

The vote is a win for President Donald Trump, who pressed lawmakers to pass the so-called rescissions package. In a post on social media, Trump blasted NPR and PBS as radical and biased against the Republican Party. He claimed that the recissions, along with his budget reconciliation bill, tariffs, mass deportations and a strong economy "will finally CUT the Deficit, and help balance our Budget."

The bill would claw back $8.3 billion in foreign aid and $1.1 billion from the Corporation for Public Broadcasting, which funds NPR and PBS. Other rescission requests may follow, but the $9.4 billion total for this package represents just a small fraction of the roughly $1.8 trillion in discretionary outlays by the federal government in 2024 - or the estimated $2.4 trillion that the Republican reconciliation bill would add to deficits over 10 years.

The package could still face changes in the Senate, where it is expected to be taken up next month ahead of a July 18 expiration date for the rescissions request.

Trump's Big Bill Would Benefit Wealthy Households and Hurt Poor Ones: CBO

The massive reconciliation bill bearing much of President Trump's economic agenda would reward upper-income households while hurting low-income ones, the Congressional Budget Office said Thursday in a new analysis. The bill passed the House in May and is currently under consideration in the Senate.

In response to a request by Democratic lawmakers, the CBO analyzed how the bill would affect people at different income levels. CBO analysts concluded that while all U.S. households would "gain resources" on average between 2026 and 2034 as a result of the legislation, the benefits would not be evenly distributed.

"The agency estimates that in general, resources would decrease for households toward the bottom of the income distribution, whereas resources would increase for households in the middle and top of the income distribution," CBO Director Phillip Swagel said in a letter to Reps. Brendan Boyle, the senior Democrat on the budget committee, and Hakeem Jeffries, the House minority leader.

The big picture: Accounting for changes in tax levels and cash transfers, the bill is projected to increase total household resources by $3.1 trillion in aggregate, mostly through tax cuts. At the same time, the bill would reduce federal and state in-kind benefits by $1 trillion, largely through reduced spending on food assistance and Medicaid.

States would make up for some of the losses, but only modestly, with the CBO estimating that states would add about $10 billion to household resources as they respond to cuts in federal spending. Other federal spending in the bill, including outlays for defense, border security and infrastructure, would add about $129 billion to household resources, CBO said.

Distributional details: CBO estimates that households in the bottom 10% of all incomes would see a loss of about $1,600 in resources over the 2026-2034 period, relative to the baseline. That loss, equivalent to about 3.9% of projected income, is driven by reduced support for programs like Medicaid and SNAP, or food stamps.

Households in the middle 20% would see resources increase by between $500 and $1,000, corresponding to a gain of between 0.5% and 0.8% of projected income.

For the top 10% of households, the bill would increase resources by about $12,000 on average, amounting to 2.3% of their projected income. That gain is driven mostly by a reduction in taxes owed.

**Adding in tariffs: **Noting that the CBO report doesn't tackle the impact of all of Trump's agenda, the Yale Budget Lab released a separate analysis that includes the distributional costs of the president's aggressive tariff hikes.

Accounting for both the reconciliation bill and increased tariffs, the analysts at Yale estimate that together, the initiatives will reduce after-tax-and-transfer incomes for the bottom 80% of U.S. households. Those in the bottom 10% would see an average reduction in incomes of about 6.5%, while those in the top 10% would see an increase of about 1.5%.

Bessent defends bill: Treasury Secretary Scott Bessent told lawmakers this week that passing the reconciliation bill is crucial, since failing to do so would result in a major tax increase as the 2017 tax cuts expire at the end of the year. Bessent told the Senate Finance Committee Thursday that the resulting "sudden stop" in the economy would hurt "working Americans" most.

Citing an analysis by the White House Council of Economic Advisers that evaluates the reconciliation bill on a dynamic basis, something the CBO score does not do, Bessent said that the legislation would provide enormous benefits to all. "[T]he One Big Beautiful Bill will raise take-home pay between $7,800 and $13,300 for the average family of four," Bessent said. "It will increase wages between $6,100 to $11,600 for the average worker."

Democrats in the hearing portrayed the bill very differently, sticking closer to the CBO analysis as they said it cuts taxes for those at the top while reducing health care and nutritional benefits for those at the bottom.

Boyle on Wednesday noted that Bessent, who had difficulty naming independent economists who back Republicans' rosy economic projections, believes that "right-leaning experts, left-leaning experts, and the nonpartisan Congressional Budget Office are all wrong about Trump's budget bill."

"I can see why," Boyle said. "Their bill gives billionaires like him a tax break while kicking millions off their health care."

Oregon Sen. Ron Wyden put it a bit more colorfully Thursday. "It is caviar over kids," he said of the GOP plan. "It is Mar-a-Lago over the middle class."

CBO

Bessent Touts 'Successful' Tax Season, Claims Tariffs Aren't Taxes

Appearing at Thursday's Senate Finance Committee hearing, Bessent defended Trump's economic policies more broadly, telling lawmakers that the president "is breathing new life into the American economy" by challenging the decades-old status quo regarding taxes and trade.

Bessent said that the Treasury Department had just concluded "its most successful filing season in years" and did so while cutting costs and making improvements at the IRS. He said tax receipts have defied predictions that DOGE cuts or the perception of reduced IRS enforcement would lead to a sharp decline in revenue. Some of the DOGE staffing cuts were postponed until after the tax-filing season was over.

"Critics of the president's efforts to modernize the IRS warned that the effort would result in a 10% shortfall in receipts," Bessent said, repeating points he had made a day earlier before the House Ways and Means Committee. "Instead, the opposite happened. April receipts this year were up 9.5% over the previous year. And receipts in May were up 14.7% over the previous year." Bessent said those increases happened even as billions of dollars in waste and planned IT spending were cut.

Bessent also defended Trump's tariffs, claiming that they are not a tax and arguing that the increased cost of the levies does not have to be borne by U.S. consumers. And he pushed back, or tried to, on projections that the GOP tax-and-spending bill will increase the deficit over 10 years. He told lawmakers that he "aggressively" disagrees with the Congressional Budget Office's projection that the Republican reconciliation bill would add $2.4 trillion to the deficit.

Democratic Sen. Elizabeth Warren pressed Bessent on the cost of the plan. "Every credible, independent expert agrees that Trump and the Republicans' 'big, beautiful bill' would add trillions of dollars to the national debt and would not even come close to paying for itself," she said, citing the Congressional Budget Office, the Penn-Wharton Budget Model, the Yale Budget Lab, the Tax Foundation and the Committee for a Responsible Federal Budget - as well as Elon Musk and The Wall Street Journal.

She asked if Bessent could point to an independent analysis that shows the bill would reduce the deficit. Bessent pointed to a CBO analysis that said that Trump's tariffs would raise $2.8 trillion, more than the projected cost of the reconciliation package.

Bessent was asked a similar question on Wednesday at a hearing of the House Ways and Means Committee. "It strikes me that you are hell-bent on ignoring the warnings of any independent expert whose opinions may not serve your goals," Rep. Mike Thompson of California, top Democrat on the Ways and Means Tax Subcommittee, told Bessent.

In response, Bessent cited Arthur Laffer, a Trumpian economist who served in the Reagan administration and is best known for his theory suggesting that some tax cuts can increase revenue by juicing economic growth. Thompson laughed. "Great, I don't think that one counts," he said.

Democratic Senator Forced Out of DHS News Conference and Handcuffed

Democratic Sen. Alex Padilla of California was forcibly removed from a Los Angeles press conference held Thursday by Homeland Security Secretary Kristi Noem, sparking calls for an investigation and warnings from shocked lawmakers that the Trump administration is growing increasingly dictatorial.

Video of the incident posted online showed federal agents removing Padilla from the room where Noem was speaking, forcing Padilla to the floor in a hallway outside and handcuffing him.

In a statement released after the incident, Padilla said he was in the Federal Building in Los Angeles for a briefing with officials and entered Noem's press conference in hopes of getting answers about the recent deployment of military forces in the city. "After identifying myself and trying to ask a question, I was aggressively pushed out of the room, forced to the ground, and handcuffed," Padilla said. "If that's what they do to a United States Senator with a question, imagine what they can do to any American that dares to speak up. We will hold this administration accountable."

In a post on X, the Department of Homeland Security said that "Padilla chose disrespectful political theatre" and was not wearing his Senate security pin and that agents at the scene "thought he was an attacker." DHS said that the senator "was told repeatedly to back away and did not comply with officers' repeated commands." The post also alleged that Padilla did not identify himself, though video footage online showed him doing so.

The White House also blamed the senator for the confrontation. "Padilla stormed a press conference, without wearing his Senate pin or previously identifying himself to security, yelled, and lunged toward Secretary Noem," Abigail Jackson, a White House spokesperson, told Politico. "Padilla didn't want answers; he wanted attention. Padilla embarrassed himself and his constituents with this immature, theater-kid stunt - but it's telling that Democrats are more riled up about Padilla than they are about the violent riots and assaults on law enforcement in LA."

Noem and Padilla reportedly met for 15 minutes after the press conference.

Democrats and some Republicans decried the way Padilla was treated. Senate Minority Leader Chuck Schumer called the incident "disgusting," "despicable" and "so un-American." He said it "reeks of totalitarianism."

Democratic Sen. Chris Murphy of Connecticut said the episode feels like a defining moment and a test for the country. "This is not simply an assault on Senator Padilla," he said on the Senate floor. "This is not an assault on Democratic senators. This is an assault on the rule of law. This is an assault on our democracy."

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