Donald Trump (4:42)

I want to do what has not been done in 24 years. Balance the federal budget. We're going to balance it.

Ezra Klein (4:51)

I also remember that. That happened in March. So here I've been talking about what the bill does to the budget. But there's this other question, too, maybe the more important one. What is it trying to accomplish? $5 trillion is a lot of debt. But if we were adding it, and it would lead us to invent and commercialize nuclear fusion or perfect a drug that would double our healthy lifespans, then fine, it's worth it. But here's what this bill does in the real world. It cuts taxes, mostly for richer people. It cuts in Medicaid and food stamps. Republicans are also allowing some Obamacare subsidies to expire. And so the estimate is that between all this, 13 million people, 13 million will lose health insurance. It's also grimly exact. The bill has $1.1 trillion in tax cuts for people who make more than $500,000 a year. And it has $1.1 trillion in cuts to Medicaid and food stamps. It is a straight transfer from people cannot afford food and medical care to people can afford to fly first class. The bill also guts the tax credits that support the wind, solar, electric vehicle and nuclear power industries. China will be thrilled by that. So when you think about this bill, you should think about risk. This is a bill that increases our risk of a fiscal crisis. What if all these other countries were alienating, all these investors were scaring? Stop buying our debt. Even as we're creating trillions more in debt, we're going to need them to buy. This bill increases the risk any of us face if we can't afford health care or food for our families. If Trump's tariffs cause a recession, this bill gutted the safety net millions of us would have relied on for help. It pumps tens of billions of dollars into ICE detention facilities and deportation capacity. And so it raises the risk faced by immigrants or anyone else caught up in the administration's mass deportation and detention. Oper Look, I've been a policy journalist for more than 20 years. I've covered more bills than I can count. I cannot remember a crueler or more irresponsible piece of domestic legislation that has been seriously proposed and its sins are compounded by its size. If the Republicans big budget bomb goes off, we are all in the blast radius. My guest today is Katherine Rampel. She's an economics columnist at the Washington Post, an anchor at msnbc, and she's been covering this closely and I've asked her to come on the show today to help talk through all the different risks this bill brings and what it'll really mean for people's lives. As always, my email Ezra kleinshowytimes. Kathy Rampel, welcome to the show.

Donald Trump (7:43)

Great to join you.

Ezra Klein (7:45)

So this big beautiful bill, big, beautiful budget. It is really quite big. There's a lot in it. If you could only tell people about three or four of its parts, what would they be?

Donald Trump (8:01)

I think I would say it is a transfer of wealth from the poor to the rich, from from the young to the old and from the future to the past.

Ezra Klein (8:09)

Walk me through that.

Donald Trump (8:11)

So it has a lot of big bundles of parts in it which normally we would have more time to digest piecemeal. But those include big tax cuts which are generally quite regressive. They help higher income people more. It also includes big cuts to the safety net, particularly Medicaid and snap, otherwise known as food stamps. And it includes basically eliminating a bunch of climate related tax credits which are investments in the future, as well as cutting programs that disproportionately help children, which I would also say robs our future and will still cost a lot of money, which leaves the bill due to future generations of taxpayers.

Ezra Klein (8:57)

And how big is that bill?

Donald Trump (9:00)

Depends on how you calculate it. There are a bunch of competing estimates out there, but over 10 years, it's somewhere around $4 trillion. And before the negotiations are done, it may well be more than that, because there are a bunch of Republicans who want even more tax cuts.

Ezra Klein (9:17)

You and I are both battle scarred veterans of the 2010 budget crisis.

Donald Trump (9:23)

Oh, yes. Oh, yes.

Ezra Klein (9:24)

And I think those fights, when we were constantly being told by Republicans that we were about to become Greece and needed immediate austerity, and then, in fact, interest rates were completely fine for years and years, soured a lot of people on warnings about the debt. But we're in a pretty different interest rate environment now. So interest rates are a lot higher.

Donald Trump (9:46)

Yep.

Ezra Klein (9:48)

And the payments have gotten pretty serious. So interest payments are currently the second highest expenditure in the federal budget. It's more than our entire national defense spend. Adding a bunch more debt on top of that seems a little dangerous. How do you think about the debt burden we're facing down here?

Donald Trump (10:10)

What's that expression? Something that can't go on forever won't. I think that's kind of where we are in that we cannot continue to sustain this level of deficit spending without, at some point, you would think, bond investors revolting and needing to, as our political leaders, needing to either cut spending or raise taxes or both. But when that actually happens, I have no idea. You know, it might be depending on where Trump is headed. Trump is doing other things to call into question the safety or risk freeness of the US Dollar and US Debt. So setting that aside, this is what worries me.

Ezra Klein (10:58)

So I'm used to doing budget coverage, and you tend to kind of sit in the confines of the budget. You're worried about this provision, that provision. But there's this interaction effect between what Trump is doing elsewhere, the tariffs, the trade war with China. We've seen bond markets shake recently under various fears, and then piling on a huge amount of new debt in this budget if it passes. And we have this world where we have much higher interest rates. I think the Trump administration would like to see interest rates come down.

Donald Trump (11:34)

Oh, Trump has made that more than clear.

Ezra Klein (11:36)

More than clear. But passing a budget like this makes it a lot harder for the Fed to bring down interest rates.

Donald Trump (11:42)

Yes. Well, a lot of things that the Trump administration is doing will make it harder to reduce interest Rates, one of which is adding a lot more debt piled onto the existing debt that we already have. Some of it has to do with the fact that tariffs are likely to increase prices. All of these things are kind of coming together to make it more likely that rates either go up or at least don't come down as much as certainly anyone looking for a house would like them to be.

Ezra Klein (12:16)

I know this all gets wonky to try to plug the weird and quite, I think, dangerous budget into the other parts of the Trump administration's economic theory, but I want to try to do it for a minute because we've just spent months covering the tariffs and the theory behind the tariffs, and on some level, the theory behind the tariffs is this, that trade deficits are bad. And this world where what's happening is that the rest of the world keeps giving us money and we keep taking in all of their investment, and that has effects on the dollar and effects on our manufacturing. And the Trump administration wants that on some level, to stop. They believe America's been ripped off by selling so many financial products in order to buy goods.

Donald Trump (13:03)

Yeah, that doesn't make any sense, though.

Ezra Klein (13:07)

Yeah, I agree. That's one of the problems with this administration.

Donald Trump (13:09)

Doesn't make any sense. And I think Scott Besant is smart enough to know that it has been to our advantage that other countries or private individuals around the world want our Treasuries because it has enabled us to continue borrowing and borrowing and borrowing and not have to make the politically difficult decisions to either raise taxes or cut benefits. So it sounds like you think that the administration wants people to stop buying our debt. Is that your theory of the case?

Ezra Klein (13:40)

I think that they believe that this world, in which our financial products are so unbelievably attractive, and we are buying so much from their soul and giving them our money, and they take our debt in that it's a bad world, and they want to shift the balance of trade and inflows and outflows, and that's what the tariffs are largely about, and that they're doing this at this moment when they're gonna pile on a bunch of debt.

Donald Trump (14:08)

I think what's happening here is that Trump decided he likes tariffs, and everybody around him scrambles to reverse engineer a justification for it.

Ezra Klein (14:19)

Oh, that I don't disagree with.

Donald Trump (14:20)

I don't think that anybody is thinking, yes, we need to have more tariffs in order to have more manufacturing, in order to have the rest of the world not buying our debt, because everything Trump wants to do will increase the debt.

Ezra Klein (14:33)

So I am not arguing there's not a contradiction. What I'm saying is you're doing both of these things and they are putting on a bunch of tariffs.

Donald Trump (14:39)

Yes.

Ezra Klein (14:40)

And they are making us a less trustworthy place to invest. And then on the other hand, they're gonna radically increase are debt and the need to have the world keep buying it. And these two things together, making America a both less welcoming place for that kind of endless purchasing of our debt and making America a less trustworthy place to purchase debt and making America a place it needs to sell ever more debt. Seems like a recipe.

Donald Trump (15:09)

Oh, absolutely.

Ezra Klein (15:10)

For things to go very badly wrong.

Donald Trump (15:12)

Absolutely.

Ezra Klein (15:12)

At some unknown point in the Future.

Donald Trump (15:14)

Yes. I 100% agree with that.

Ezra Klein (15:16)

That is where I'm going with all this.

Donald Trump (15:17)

Okay. I 100 agree with all of that. But I don't think that any of this is deliberate. I think Trump is convinced that the bill won't cost anything. People like Scott Bessen have told him it's gonna supercharge growth and we'll grow our way out of debt, and then we don't have to worry about whether there's appetite out there to buy more Treasuries.

Ezra Klein (15:43)

Do you buy that? The taxes we're seeing in this bill will lead to a lot of growth we would not have otherwise had.

Donald Trump (15:50)

I think that it will stimulate demand somewhat in the near term. If people's taxes go down, they have more money to spend on other things. We saw that last time. So, you know, there'll be some supply side effects, some demand side effects, but not enough to overcome all of the other reasons why this is slowing the economy. So, like, I was talking with this guy who is the CEO of a Christmas tree company, Balsam Hill, they sell artificial Christmas trees from China. And I was asking like, so Trump says he's going to help you in the long run by cutting your taxes. And he said, we ran the numbers, and if they cut their taxes on their profits by half, that would offset 2% increase in tariffs. So it's just like the numbers don't add up, particularly for industries that are really exposed to the tariffs. But in general for the macro economy, no, these things are not going to fully pay for themselves, even if there is a tiny grain of truth to the idea that they could stimulate the economy, at least in the near term. So, again, I think in some ways it sounds like you're giving them too much credit. I don't think it's as strategic as you make it out to be. But the bad outcome you describe.

Ezra Klein (17:09)

Yeah, See, I don't.

Donald Trump (17:09)

Yes.

Ezra Klein (17:10)

I don't hugely care what they think they're doing.

Donald Trump (17:12)

Okay, fair enough.

Ezra Klein (17:13)

I care what they're doing. I agree that all of their different arguments for things are contradictory and don't cross domains, that there's no macro theory of the case.

Donald Trump (17:23)

Yes.

Ezra Klein (17:24)

But they are doing all these things, and that seems like a huge risk that is building up beneath the system to me.

Donald Trump (17:33)

Yes, I agree with that. And again, this Moody's announcement, I think is. Yeah.

Ezra Klein (17:39)

Do you want to describe what happened there?

Donald Trump (17:41)

Yeah. So there are basically three main ratings agencies, and for a very, very long time, the U.S. debt was rated by all of these ratings agencies as pristine, risk free. You know, the gold stars all around. AAA is what they called it. And then over the last 10 to 15 years, ratings agencies started knocking us down a peg and saying maybe they're not as good for their word as they seem to be, including because there was a debt ceiling debacle where it looked like we might default on our debt, et cetera. More recently, the last holdout, Moody's, which I think had not downgraded us in over 100 years, or we've had a perfect rating for them for over 100 years. Moody's basically said, yeah, we don't think these guys are quite as 100% good for their money as we once thought, because US deficits have already been on track to be growing and growing and growing. And now with the likely passage of this additional big, beautiful bill, that problem is only gonna get worse. So it doesn't really mean anything per se. Like, it's more symbolic. It is more like yet another scolding from the financial markets in a way that lawmakers are acting irresponsibly.

Ezra Klein (19:16)

So when you add a bunch of debt, it matters what you're adding the debt for. In this case, we're adding it to extend the tax cuts passed in 2017 and then add a bunch of new tax cuts on top of it.

Donald Trump (19:29)

Yes.

Ezra Klein (19:29)

How do you describe the total tax cut package here? What is it trying to do? What should we. Who is it benefiting? What's your gloss on it?

Donald Trump (19:38)

So overall, most Americans will get a tax cut. I think a lot of the talking points are relative to. Again, relative to what they would have had if no bill had passed, because a lot of the tax code is expiring and people's taxes would have otherwise gone up. So when you hear talking points like these are only tax cuts for billionaires or corporations or whatever, that's not quite true. Like, I think I looked this up before we met, but basically 94% of Americans will get some tax cut relative to what would have happened if Congress does nothing. But the very biggest benefits definitely go to higher income classes, like 2/3. This is from the Tax Policy Center. 2/3 of the plan's tax cuts by dollar value go to those in the top quintile. People in the top 1% would get about a quarter of the tax cuts. So that's people making over a million dollars. Basically they get about a quarter of the benefits. And then if you look at the overall bill, it's not only that the rich benefit more, it's that the poor come out behind. Because to the extent that any of this is paid for at all, it's largely paid for by taking other benefits away from low income people.

Ezra Klein (20:58)

Like what benefits?

Donald Trump (20:59)

Medicaid and food stamps are the biggies here. Medicaid currently enrolls something like one in five Americans. It's a huge program, it's a popular program. And Republicans have argued that their changes are only about kicking off the freeloaders and apocryphal welfare queens. And we'll make sure that everyone who is deserving of this public health insurance program continues to receive it. But if you actually look at the provisions themselves, that seems very unlikely.

Ezra Klein (21:39)

I want to stay on the Medicaid side of this for a minute. One of the big ways we're trying to save money in Medicaid without saying what they're doing is cutting it is what's called work requirements. And the theory of work requirements is we make you prove that you, if you're an able bodied person, that you have worked more than 80 hours or you are looking for work in some kind of intense way. And if you can't prove that you lose your Medicaid because you know if you're going to get the benefit of Medicaid, you should show the responsibility of either working or looking for work. The problem is, and my partner Annie Lowry has talked about this as the time tax and written about this kind of administrative complexity a lot we make it so hard to do and to prove that huge numbers of people lose coverage through being unable to complete the paperwork. And so you're weaponizing time and bureaucratic complexity to deny people a benefit they are supposed to have. So how much of the Medicaid cut is built around that?

Donald Trump (22:49)

So a lot of it. And I actually did a lot of on the ground reporting about a pilot version of this back in 2018, 2019 in Arkansas, where the Trump administration allowed Arkansas to impose work requirements. And I'll say a few things. So the first thing is like, this is a very popular actually provision. Something like 62% of Americans like the idea of Medicaid work requirements, including about half of Democrats. So it's because it sounds reasonable. Why shouldn't people have to show that they are productive members of society in order to receive these government benefits? But it's not really clear like what problem it's trying to solve in that almost 2/3 of people who are on Medicaid are working. They're working either part time or full time. And the remainder who are not working have something that is generally considered like an allowable excuse, meaning that they're a full time caregiver, they're enrolled in school, they have a disability, et cetera. It's only a very tiny slice of people who don't have one of these exclusions, one of these exemptions that's spelled out. So in Arkansas, most of the people, something like 18,000 people, lost their Medicaid within the span of a few months. Most of those people were kicked off of Medicaid not because they were shown to have not been working or have one of these other allowable exemptions, but for administrative reasons. Basically, they didn't fill out the paperwork or they didn't fill it out sufficiently. There was one guy that I profiled, Adrian McGonagall, who actually was working at a chicken plant and he got confused about how to report his hours. It was like not mobile friendly. The website literally shut down after, I think nine o' clock every day. I don't know, the hamsters had to go to bed or something. And he didn't have access to a computer. He only had his phone and he thought he did it once and that was sufficient. Anyway, he lost his health coverage. He had severe COPD because he was not able to get his medications and to treat this chronic illness. He ended up getting very sick, lost his job at the chicken plant. And so this policy that was sold as encouraging people to get jobs actually cost him his. He unfortunately passed away quite recently, as I learned. I got in touch with his former legal aid attorney who had said that, you know, ultimately Adrian had been one of the plaintiffs in the case to challenge this law and did get it overturned and he was able to get his Medicaid back. But he kind of went into this downward financial and health spiral as a result of all of this. So these things have consequences and there are long term harms that are created by what seems like, you know, Reasonable paperwork to some people. But the reality is that this is a backdoor way of basically purging people from their health insurance again, to take it back to the Congressional Budget Office. That is their assumption as well. The Congressional Budget Office says, yes, this will save a lot of money and a lot of people will lose health insurance. There will be no change on employment. That is what their assumption is. This policy that, again, is supposed to be about making sure only the deserving people get jobs and encouraging more people to pick themselves up by their own bootstraps will actually have no effect on how many people have jobs.

Ezra Klein (26:29)

That's pretty grim.

Donald Trump (26:31)

Yes.

Ezra Klein (26:32)

And it saves a lot of their money, actually, which implies that a lot of people are losing coverage through these paperwork requirements.

Donald Trump (26:42)

Yes.

Ezra Klein (26:43)

And I just think this is ugly. If you want to argue that people shouldn't have healthcare, fine. If you want to argue people should have jobs, we could have all kinds of labor market policies that help people.

Donald Trump (26:55)

Get jobs, none of which are in this bill.

Ezra Klein (26:57)

None of which are in this bill. But for the administration that did doge to add a huge layer of bureaucratic complexity, how good will the other languages of this paperwork be? How quick will the response times in these agencies?

Donald Trump (27:17)

Will the website shut down after 9pm.

Ezra Klein (27:18)

Will the website shut down after 9pm it just really reveals something. Both an unwillingness to. I mean, Trump has promised not to cut Medicaid, an unwillingness to stand up for what they're actually doing, and then an effort to weaponize the very bureaucratic inefficiency that they otherwise pretend to condemn and root out against the weakest and most powerless segment of society. People who do not make enough money to get health insurance.

Donald Trump (27:51)

Yeah, and there are a bunch of other.

Ezra Klein (27:52)

The whole thing just. It actually turns my stomach.

Donald Trump (27:54)

Yeah, there's a bunch of other red tape that they add, they record, require that people on Medicaid have to reprove eligibility more frequently, which, again, if the process were completely seamless, who cares? But it's not. Every time people have to reprove eligibility, even if nothing has changed in their situation, there's a chance the paperwork gets lost. People have to find the time to go to the office to deliver the forms in person, or they have to navigate this clunky website or whatever. It's just a matter of, like, hacking through all of this red tape, American Ninja style. You know, that's sort of how I picture it. It's an obstacle course, essentially, that they've set up for people to make it harder for them to prove that they are entitled to the benefits that they are legally entitled to.

Ezra Klein (28:40)

And then there are about $300 billion in cuts to SNAP, which is the sort of modern term for the food stamps program. And there's also the a lot of this bill is about extending tax cuts from the past.

Donald Trump (28:54)

Yes.

Ezra Klein (28:54)

But right now there are these subsidies for the Affordable Care act that are passed under the Biden administration which have made the premiums in the Affordable Care act much cheaper. They've led to a pretty big increase in the number of people enrolled. And one of the pay fors in the bill is to allow those to expire. Do you mind talking a bit about how that'll work?

Donald Trump (29:14)

Yes. So understandably, there's been a lot of focus on Medicaid. There are other provisions either in the bill or part of sort of the broader Republican agenda that will also end up with people losing their health insurance. There are these expanded subsidies essentially for people to buy insurance on the individual marketplace that have partly been responsible for the fact that the uninsured rate in America, I think, was at its lowest level on record last year. It's partly because of Medicaid expansion. It's partly because of this. And it's like technical and wonky and people don't really pay attention to it. But those expanded subsidies were passed by Democrats and are set to expire at the end of this year. Republicans could choose to extend those, just as they are extending a lot of other things on the tax.

Ezra Klein (30:09)

Pretending that extension cost no money.

Donald Trump (30:11)

Correct. But they have chosen not to. So when you see these scarier figures for how many people are going to newly become uninsured from the CBO, you know, over 13 million people. That is inclusive of Medicaid changes to the Affordable Care act and some other regulatory stuff that basically Congress is codifying.

Ezra Klein (30:34)

So I just want to put a very fine point on this. According to our best read of what the bill is going to do, we are going to drive 13 million people off health insurance.

Donald Trump (30:46)

Yes.

Ezra Klein (30:47)

We are going to end $300 billion of spending that gives food to hungry people. And that is going to go to pay for, depending on how you calculate it, roughly a quarter of tax cuts goes to the top 1%. Like that's the fundamental math of this bill.

Donald Trump (31:09)

Yes, that is the fundamental math of this bill. And this is part of the reason why I, among others, have characterized it as a massive transfer of wealth from the poor to the rich because it is forcing low income people who would otherwise have access to these safety net benefits that have been around and been popular for Many decades.

Ezra Klein (31:31)

Including among Republicans. Including among, as Senator Josh Hawley's been saying.

Donald Trump (31:34)

Well, yeah, I mean, just as an aside, there are Republicans in the House who very narrowly won their elections last year by fewer votes than the number of people who have met who are on Medicaid in their districts. So yeah, besides, like the human cost of all of this, politically, it seems pretty dumb to me because while there is maybe a stereotype of who is the typical food stamp recipient or the typical Medicaid recipient, a stereotype that's, you know, racialized, among other things, people from all walks of life go through periods where they need this assistance. Many of them are Republicans. Many of them live in districts that are currently represented by Republicans. And at some point people are going to notice when they can't put food on the table or they can't get the inhaler for their kid.

Katherine Rampell (32:56)

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Ezra Klein (33:59)

It used to be the case in American politics that Democrats won voters who made less than $50,000 by a lot and Republicans won voters who made more than $100,000 by a lot. And so we used to have these fights over the safety net, but they somewhat aligned with the political coalitions. Republicans wanted to cut benefits like this, but mostly those were not their voters. In 2024, Donald Trump won voters making less than $50,000. It wasn't a huge victory among them, but he won them. Donald Trump won voters who did not go to college. When you look at who is on Medicaid, when you look at who is on food stamps, when you look at who needs expanded health insurance subsidies under the Affordable Care Act. It is concentrated in this group of.

Donald Trump (34:47)

Voters who thought Trump was going to make their cost of living cheaper and.

Ezra Klein (34:53)

Who are also now paying for them.

Donald Trump (34:54)

Yes, higher tariffs, right. There are many ways in which this administration and allies in Congress have run a pretty regressive agenda. Not looking out for the common man, shall we say. I mean, we haven't even talked about some of the other dosh cuts recently, like closing half of the regional Head Start offices. Head Start is the program that serves low income families by providing pre K and childcare and other ancillary services for the parents. My question will be at what point do Americans necessarily connect the dots? I think with tariffs, people understand the tariffs are happening. Some of these other connections I think are a little bit more opaque. And some of that is of necessity and some of it I think is by design. Like one of my, one of my most deeply held political beliefs is that complexity rewards demagogues. And this bill is definitely a case in point. Like budgets are always complicated and make people's eyes glaze over. But normally journalists have some time to digest what's in it and help people understand how it might affect them. Instead, all of this stuff is being dumped at once. So it's very easy to lie about like Donald Trump and Republicans in Congress are just looking out for you and are gonna make you rich and are gonna kick off all of those freeloaders and welfare queens from programs so that you get them and they don't. And it's an easier story to tell the more opaque the actual policies are.

Ezra Klein (36:36)

It's why I've thought a fight happening as we speak and we don't know how it'll resolve yet. Is interesting. So the bill as initially written, has the work requirements come into play in 2029 after the next presidential election. So they get to pocket these assumed savings because we do budget numbers over 10 years. But in theory, nobody will feel the thing they are doing to Medicaid until 2029, or at least that thing they are doing to Medicaid. But the more right wing members of their caucus want that brought up to 2026, in which case people begin to feel it immediately within this term, such that it could be something that people are upset about come the next presidential election. Again, we don't know how it'll play out. But I thought it was quite telling that the Republican majority's preference, not their sort of more freedom caucus minority, was let's put this in the bill, but make it the Next president's problem because you can lie about things until you're thrown off of Medicaid and a bunch of people you know are thrown off of Medicaid and then what just happened comes clear real quickly.

Donald Trump (37:50)

Yes. Well, there's this fundamental tension within the Republican caucus, as you pointed out, and between members who think that the provisions are not heartless enough and those who think that they are too heartless in the political sense, I guess in that the people on the budget committee, I should say when we're recording this, we don't know what concessions were given to them as yet in order to get the bill out of committee. But the people who voted against it initially said that they wanted these Medicaid work requirements to be moved up, they wanted more of the climate related tax credits to be rescinded, et cetera. But then there are a lot of other members of the party who were very worried about exactly the political risk you identified that people will realize they've been kicked off of these benefits and will take their anger, justified anger out on the Republican Party and whoever's on the Republican ticket. And this is a problem not only in the House, but it's a problem in the Senate. I think you mentioned Josh Hawley has talked about this.

Ezra Klein (39:01)

Hawley seems to be against Medicaid cuts at high levels altogether and he's making the argument that I sort of just alluded to. We are now a working class party. It is our voters on Medicaid.

Donald Trump (39:13)

Yes.

Ezra Klein (39:14)

Cutting Medicaid for our voters.

Donald Trump (39:16)

Well, and there's also some disagreement in the party about whether to even call these Medicaid cuts. Right.

Ezra Klein (39:21)

Well, I think there's not disagreement. They don't want to call them Medicaid cuts.

Donald Trump (39:24)

Yes, fair. Fair.

Ezra Klein (39:25)

But they're, they're not. They might play stupid, but they're not idiots.

Donald Trump (39:29)

Yeah. Yes, fair.

Ezra Klein (39:31)

They know they're saving money and that when you save money on Medicaid, what just happened is somebody somewhere did not get health care.

Donald Trump (39:37)

Right. But they are spinning it as it's only the undeserving people who won't get health care, the people who are lazy, who are freeloaders, who are government parasites and, you know, can't get their butt to work.

Ezra Klein (39:50)

But what Josh Hawley is saying, but what Josh Hawley is saying is, look, guys, we can't be believing our own spin.

Donald Trump (39:59)

Yes. We can't get high on our own supply.

Ezra Klein (40:01)

We can't get high on our own supply. If we do this, we are cutting Medicaid for our voters. And what I'm saying is the people writing this bill know what they're doing.

Donald Trump (40:08)

Yes, I see.

Ezra Klein (40:09)

They are not confused about what is happening when you cut Medicaid in this way. They know that the only way this saves money or the main way this saves money is people who otherwise could have walked into a hospital or a doctor's office and put down a Medicaid card and gotten healthcare coverage that the government would have paid for cannot do that. Yes, that's the mechanism.

Donald Trump (40:31)

Yes, I agree with that. I mean, there are a lot of contradictory things.

Ezra Klein (40:35)

Yes. I just don't want to allow their spin to stand on this show.

Donald Trump (40:37)

That's my. That's a totally reasonable point. Yes. So there are members of the Republican conference who want these Medicaid cuts to kick in faster. There are members who want them to kick in more slowly, or maybe not at all, because they understand that it is their voters who may suffer. There are members of the party who don't want to raise deficits. There are members of the party who think that deficits don't matter. There are just, like, part of the issue here, and part of the reason why I have been really wondering, like, where does this bill actually go, is that there are so many mutually exclusive constraints in a party that has a very thin margin that it's hard to know who gets to extract what demands in exchange for their vote. Cause, like, we haven't really talked about the Republicans who are in, you know, the SALT caucus, who want basically bigger tax cuts for rich people by allowing people in blue state, predominantly blue states, to deduct more of their state and local taxes. And they may be the defining. You know, it seems like the people who are worried about Medicaid cuts hurting their own constituents, they've gotten a little quieter recently. The SALT caucus is now louder. So maybe they're the ones who get to twist the bill in their direction. But then it's gonna cost even more. And what do you do about that? And be more aggressive and be more aggressive, and you end up having the bill cost more. Do you end up kicking even more people off of benefits? I don't know. Like, these puzzle pieces just don't fit together.

Ezra Klein (42:14)

I was gonna say that the thing here is that the only thing holding the coalition together is fear of Donald Trump himself, that House Republicans, Senate Republicans, whatever they think on most policies, very few of them will dare oppose him. Except there was this one thing that happened.

Donald Trump (42:32)

Oh, I know what you're gonna say.

Ezra Klein (42:34)

Which is that Donald Trump had exactly one good political instinct here and he said, maybe one of the ways we should pay for this is we should raise taxes on really wealthy people. And not by a ton, but maybe just enough to say we're doing it.

Donald Trump (42:52)

Yep.

Ezra Klein (42:53)

What happened to that?

Donald Trump (42:55)

This was one of the few times I think I've seen his friends and allies in Congress, like, visibly recoil. And many of them said publicly, yeah, that's not a good idea. And so Trump then posted on social media, well, I think they should do it, but it's probably a bad idea. So I kind of understand if they don't. This is one of the few times I feel like I've seen Donald Trump back down in one of these fights. And, you know, it's clear that this was in the no fly zone.

Ezra Klein (43:31)

It was just interesting to see this vestigial reflex of the Republican Party as I understood it to exist in 2013 kick in. And the one thing Donald Trump cannot do as he tries to build his working class multiracial coalition is the most popular policy move in his arsenal for a bill like this, which is to pay for some of your tax cuts by raising taxes on rich people.

Donald Trump (44:03)

Well, you said the one thing that holds the Republican Party together is fealty to Trump. I think it's fealty to Trump. And tax cuts, particularly regressive tax cuts. This has been their North Star for many, many years. And it does not surprise me that that's their one red line with this guy is that we cannot raise taxes on higher income people and corporations.

Ezra Klein (44:29)

So Donald Trump wins the election running against the high prices of the Biden era, and he walks into an economy where inflation has calmed down, things are pretty steady and stable, stock market's in good shape. And then he begins raising prices through tariffs. And the tariffs are bouncing around a lot right now. We're on a reduced level with China for 90 days as we negotiate something around 30%. A mere 30%.

Donald Trump (44:57)

Yes.

Ezra Klein (44:58)

But there are tariffs now on all kinds of goods coming from all over the world. Those price increases are starting to show up, are going to continue showing up. There's also a huge amount of uncertainty pausing all kinds of business investment, because when you don't know what the tariff rate or tax structure will be from day to day, you're not going to make a bunch of long term capital investments. So every forecaster says that the risk of recession has been rising from what they anticipated it would be at the beginning of the year. Now you get a bill like this where we're doing things like cutting, snap, cutting Medicaid, cutting The Affordable Care Act. How do those two things interact?

Donald Trump (45:39)

I think it's never really a great time to kick a lot of people off of critical benefits like Medicaid and snap. But probably the worst time is when we are about to head into a recession because a, that's when people are most likely to need these programs and they automatically kick in. And so there's a little bit of the safety nets, what the safety net is, right? It's to catch people when they might otherwise be falling, to help them get back on their feet. These programs also because they kick in automatically, they're thought of as automatically stabilizing the overall economy. Because if all of these people who were losing their jobs at once, stopped spending at once, that's going to lead to kind of a downward spiral. They stop spending the places that they would spend their money, stop hiring, lay off people, et cetera, et cetera. But it's effectively like an automatic form of stimulus and helps the economy recover a little faster. If instead you have these things coinciding at once where we have a recession on the one hand, and these massive changes to programs like food stamps and Medicaid, then you will have not only greater suffering among individuals in the near term, but potentially a deeper and longer recession. And look, I really, I don't think a recession is a fait accompli. You know, I don't want to suggest that it's definitely going to happen, but the odds have increased and all of these agenda items are conspiring to make life a lot more difficult, whether intentionally otherwise, a lot more difficult for the most vulnerable Americans because again, the tariffs will also increase the prices of the things that they buy. So, yeah, it's like it's the perfect storm.

Ezra Klein (47:33)

So Republicans will tell you that this whole conversation is unfair, that we're ignoring all the ways in this bill that they are expanding help for the working class. So there is a somewhat complicated approach to expanding the child tax credit. There are things like no tax on tips, no tax on overtime. Talk to me about this set of policies, the more populous dimensions of this bill.

Donald Trump (48:03)

So I don't think they're uniformly bad. All of the things that you just mentioned. I do think that we should be doing something to make more assistance available to families with kids, for example. But the way that they have structured these changes is still not really targeting those who need it. So just as an example, the no tax on tips thing, it sounds like that would help your typical waitress or other hospitality worker. In reality, those people are probably low income enough that they're not going to benefit from this because their income is below the threshold where they would get taxed much anyway. Whether that income is coming from tips or from wages. The people who are going to benefit are going to be the people who are disproportionately high income who can maybe reclassify more of their income as tips or as overtime. So this is going to be like a big boondoggle for accountants and tax attorneys.

Ezra Klein (49:08)

And we've got to the irs.

Donald Trump (49:10)

And we've got to the IRS checking.

Ezra Klein (49:11)

On tax shenanigans are going down.

Donald Trump (49:13)

Right? So this is not structured in such a way that it will actually help the people that I think are being envisioned. When you think about tipped workers or you think about people who need overtime pay, they are probably gonna see very little benefit or at least relative to where the dollars are actually going to be flowing. It's primarily going to help higher income people. The same thing with like cutting or eliminating taxes on Social Security. Most people under current law, like who are low income already are not paying taxes on Social Security. The people who are left out of the current system who would be exempt are disproportionately higher income because of how the law currently works. So a lot of these things that sort of sound populist on their face are either symbolic or actually going to be regressive. And it will also distort a lot of behavior too. Like I should tell the Washington Post to just pay me 100% in tips and then, you know, all of my income will be tax free. With a home equity investment from HomeTab.

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Ezra Klein (51:43)

One of the other ways they're trying to pay for part of this is gutting various tax credits to incentivize clean energy. They're in the Inflation Reduction Act. This is another part of the bill under active negotiation. The right wing of the Republican Party wants to make the evisceration of these tax cuts quite complete. The bill as it is currently written just makes it profound is where I'd put it. But solar credits, wind credits, tax cuts for electric vehicles, nuclear, which in general one tends to think about the Republican Party supporting, putting aside even what you think about climate change. Okay, these were fast growing, are fast growing American industries and they are industries we don't want to lose to China. We have big tariffs on Chinese electric vehicles for a reason. Donald Trump has wanted to bring down American energy prices and wants American energy dominance. These are things that generate energy and contribute to an overall capacity. How do you think about what this will mean just for the energy prices and the industries behind them?

Donald Trump (52:56)

Well, and a lot of the investments have to date been concentrated in red districts as well. I mean, my general view on so called clean energy, green energy, whatever term you want to use is that the transition is coming no matter what, just because the economics in the long run make much more sense to electrify everything and to use solar and wind and other renewables as much as possible because on the margin sunshine and wind are free and fossil fuels are not. So it's going to win in the long run. The question is only how quickly. And politicians can do things to either speed it up or slow it down. And if they slow it down, that means we are just delaying the time until we get the really, really cheap, not to mention cleaner and more renewable energy and raising costs effectively in the near term.

Ezra Klein (53:54)

But it does something else too, which is that there is a race to have the dominant corporate players in what will be globally important export industries.

Donald Trump (54:06)

That's also true.

Ezra Klein (54:07)

As you say, there's a transition going on. It's probably going to happen one way or the other. And China, who we are obsessed with, competing with, and for reasonable reasons, they've pumped a huge amount of money into trying to dominate solar technology, trying to dominate wind technology, battery technology, EVs. So putting aside again what you think of renewable energy and my opinions on it are exactly what one would think they are. This is a gigantic gift to China where their electric vehicle industries are already quite globally competitive. We are keeping those cars out for a reason. We worry if they come in they would beat the cars we are making. But now nobody likes Tesla in Europe and liberals don't Like Tesla in America, increasingly. And we are cutting the knees out of our other electric vehicle companies, which are using these kinds of credits to catch up. And to be really good at solar, wind and nuclear, you got to fund it. And we're going to stop doing that, too. Just from their industrial policy strategy, this just seems disastrous for us.

Donald Trump (55:16)

Yes, I generally agree with that. I mean, I think I am more skeptical of industrial policy more generally than you are. And I thought that the tariffs we placed on not just Chinese solar, but global solar back in whatever it was, 2018 and then extended under Biden, I thought those were dumb. Like, if other countries want to sell us solar on the cheap, let them. Let us have cheap, clean energy.

Ezra Klein (55:44)

We don't disagree on this.

Donald Trump (55:45)

Okay. And I agree with you that this set of policies is, again, somewhat at odds with Trump's general pro manufacturing renaissance agenda. Like, why are we talking about bringing back sneaker factories and maybe doll factories at this point? I'm not really sure, like, very low value items. If we are going to use industrial policy to try to revive or invest in some segment of the manufacturing industry, we should be doing it for these goods of the future.

Ezra Klein (56:23)

So this gets to another form of redistribution that you brought up at the beginning and I wanted to end on, which is the redistribution from the young to the old. And there's a way that the climate side does this very directly. If we are slowing down that transition, slowing down emissions curbs, people who are younger and are going to live in a more volatile climate are going to experience more harm from that. But you're making a bigger point about the bill. The bill from a administration that prides itself on being pronatalist and being pro kids and wanting to see more kids in America. Walk me through that form of redistribution.

Donald Trump (57:02)

So there are a number of ways in which babies and kids are basically getting shafted. One is again, sort of where we started out talking about who pays back the debt. At some point, this debt is going to be repaid, will have to be repaid by future generations of Americans, either in the form of higher taxes or fewer benefits. So that's gonna be today's kids. That's like a very basic point. But we are also doing a bunch of things to disinvest in their healthcare, disinvest in their nutritional development, by taking away some of these, again, critical safety net benefits that do have a payoff over the long run. And then there are other, like, random things in the bill that just seem to be bizarrely like, I don't know, exacting cruelty upon kids for no apparent reason. Like, again, this is really in the weeds. But Medicaid dollars, federal Medicaid dollars cannot be used to pay for undocumented people. Some states will use their own funds to provide health insurance to children, regardless of immigration status. And the bill says if you do that, if you use your own funds to pay for these kids, then we are going to strip away all of this other money. So it's like they're basically incentivizing states to take health insurance away from children. The child tax credit is another good example of this. Again, it's like buried in the bill. Probably very few people have realized it's in there, even though they say they are making it more generous, they're making it more generous, but basically for higher income people and they are taking it away from a lot of children. And the way that they're doing that is that they're saying if either of a child's parents doesn't have a Social Security number, the child is not eligible for the child tax credit. And this does not only affect kids who might have an undocumented parent, it also affects kids who might have one parent who's here legally too. Like, if you're on a student visa, you generally can't get a Social Security number. So if you imagine like a US Citizen has a kid with, you know, somebody who is in their grad school class, their child will not be eligible for the child tax credit, whereas in the past they would have been. And there's also a marriage penalty built into all of this too. Like if the parents in that example don't get married, then the US Citizen parent can claim the kid and get the credit, but if they get married, they lose it altogether. So there's like a bunch of like little things in the bill that just basically take a lot of resources away from kids in some ways big and small, especially, you know, children of immigrants. But not only children of immigrants cost shifting more of food stamps onto the state, that will disproportionately hurt kids because kids make up a huge chunk of the food stamp receiving population. So there are a bunch of things like that. And I think that that kind of gets lost in all of this.

Ezra Klein (60:25)

I think that's important though, because if you look at also where the bill spends new money, one of the places that it spends new money is inflicting pain and accelerating deportation among immigrants. So there's $45 billion through 2029 for ICE detention facilities. It's a 365% increase annually from where it is now $14 billion through 2029 for ICE transportation and removal operations, a 500% increase. So you're seeing them as they cut Medicaid, as they cut the Affordable Care act, as they cut green energy subsidies. They're spending a bunch of money on funding the machines and architecture for deportation, for detainment, for. If you begin thinking about other things, you've heard from Stephen Miller about suspending due process and for things that could get very scary, it has been a complaint to the administration that they don't have the resources to do mass deportation and confinement right now. This bill is meant to give them that money.

Donald Trump (61:41)

Yes. And look, because, yes, this is a very scary expansion of the detention industrial complex. The one piece of all of this that I do want to make sure I emphasize is that Trump says he's going after gang bangers and criminals and drug dealers and whatever. And those are the people who are getting locked up with this image conjured up of like these are people living in the shadows, committing crimes. He's actually been trying to deport a lot of people who have permission to be here or had, I should say, permission to be here. He is basically de documenting people to create a larger illegal population or unauthorized population by taking away legal status or, you know, various kinds of temporary legal status that people have. He has stripped Afghans, Venezuelans, a lot of other populations of the protections that they had against deportation, their ability to be here legally, work legally. So he is basically manifesting this, you know, scary fantasy that he had been portraying for many years, that we are being overrun with people who are not allowed to be here. And he's now saying, no, you've now broken the law. But he basically forced them to break the law by taking away their protections.

Ezra Klein (63:04)

I think this gets to this bigger picture we've been tracking a bit during this conversation. Budgets are a way we make certain goals possible to achieve and other goals impossible to achieve.

Donald Trump (63:17)

They're statements of our values.

Ezra Klein (63:19)

So tax cuts for people in general, rich people in particular, definitely check protecting Medicaid and healthcare for working class people, which you have heard them talk about. Nope. Medicaid is getting gutted. This sort of whole world working class coalition now, not so much keeping prices down between the tariffs and how much more people will pay as we shift health insurance costs onto them and off of the government. We're not keeping prices down, cutting budget deficits, which people around Trump have talked a lot about how unsustainable our fiscal picture is. This bill is a Disaster. But the Stephen Miller mass deportation agenda, the immigration side of this administration and its promises, that is really getting served here. I mean, the promises we're keeping here are tax cuts tilted towards rich people and building a huge engine, funding a huge machinery of de documentation, as you, I think correctly put it. Deportation to detention. Those are our values. I guess that's the budget.

Donald Trump (64:28)

Those are our values. I wish they were more clearly communicated to the public. But again, the fact that this bill has come together so quickly, it's over 1,000 pages long, should tell you how much they actually want the public to learn about what is in this agenda.

Ezra Klein (64:48)

I think that's a good place to end. Always. Our final question, what are three books you'd recommend to the audience?

Donald Trump (64:54)

Okay, so I was thinking about the right three to recommend, and I'm gonna give you three very different titles. Currently I am reading Ken Rogoff's book Our Dollar, your Problem, which has a sweeping how the dollar became the global reserve currency and how much of that was about luck and whether that will persist. I haven't finished it yet, but I'm really enjoying it right now. My second recommendation would be Demon Copperhead by Barbara King Solver, which came out a couple of years ago and I think won the Pulitzer. And it's a beautiful novel that's loosely based or sort of an update of David Copperfield that I think, besides being extraordinarily written, has some tremendous political insights in it as well. I don't know if. Have you read it?

Ezra Klein (65:48)

I have, and she's been on the show, and it's a great episode if people want to go back and look it up.

Donald Trump (65:52)

Yeah. About sort of resentment among. She doesn't describe them as Trump voters in her book, but some of them could be reserved, recognizable as like, the Trump in the diner archetype. Trump voter in the diner archetype. And then my third recommendation is going to be Shy, which is the musical Composer Mary Rogers memoir published posthumously with Jesse Green, who is the theater critic here at the Times. And people who know me well know that I'm a big theater nerd. And I loved this book. It's like, very dishy. There's a lot in it about mid 20th century gossip from Broadway and how she dated Stephen Sondheim, who recently passed away but was not known for being attracted to women and how all of that went. And it's just a delightful, delightful, gossipy memoir. So definitely recommend that.

Ezra Klein (66:57)

Catherine Rampel. Thank you very much.

Donald Trump (66:59)

Thank you.

Ezra Klein (67:15)

This episode of the Ezra Klein show is produced by Roland Hu. Fact Checking by Michelle Harris with Kate Sinclair and Mary Marge Locker Mixing by Isaac Jones and Amin Sahota. Our senior engineer is Jeff Geld. Our executive producer is Claire Gordon. The show's production team also includes Marie Cassillon, Annie Galvin, Elias Isquith, Marina King, Jan Kobel, Kristin lin and Jack McCordick. Original music by Pat McCosker Audience Trilogy by Christina Samulewski and Shannon Busta. The director of New York Times Opinion Audio is Andrea Strasser and special thanks to Tyson Brody.

Katherine Rampell (67:58)

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