(Average Read-Time: 10 minutes)
(1) SENATE TODAY PASSED REVISED 10-YEAR BUDGET PLAN 51-48; House to act next week.
(2) THE TARIFFS EXPLAINED: On Wednesday, Trump unveiled his most expansive tariffs to date sending the markets plummeting and risking high inflation, recession, and unemployment.
(3) DEBT LIMIT X-DATE ADVANCES: Treasury says government may be at risk of default as early as May or June.
(4) MAJOR DEVELOPMENTS ACROSS GOVERNMENT: Huge staff cuts at health agencies; Judge bars cap on NIH funds; States file suit to stop public health cuts; Supreme Court allows temporary freeze on teacher training funds; NIOSH gutted; Aid workers fired during deployment to Myanmar.
(5) DEMOCRACY UNDER FIRE: Is a Trump 3rd term possible?
1. THE SENATE ON SATURDAY PASSED A REVISED 10-YEAR BUDGET RESOLUTION BY A VOTE OF 51-48 aimed at unlocking the filibuster-proof budget reconciliation process to advance the Trump Agenda.
The revised budget plan will be voted on by the House next week. The vote was party-line except for “no” votes by Senators Susan Collins (R-ME) and Rand Paul (R-KY).
House passage is not certain. Three House conservatives have said they will oppose the Senate plan, and given the GOP’s slim margin, Speaker Johnson cannot afford to lose more than three. See Johnson’s Saturday morning leadership letter to House Republicans.
If passed by the House, House and Senate committees would be instructed to draft the following legislation:
The House Ways & Means and Senate Finance Committees would be instructed to extend the expiring 2017 tax cuts at a cost of more than $5 trillion and add up to $1.5 trillion in new tax cuts (although both chambers are using accounting gimmicks to hide the unprecedented debt increase);
House and Senate Armed Services, Homeland Security, and Judiciary Committees would be instructed to increase spending by $300-500 billion to build a new missile defense system and enable mass immigration arrests, detentions, and deportations;
House Energy & Commerce Committee would be instructed to cut spending by $880 billion, most likely to come out of Medicaid because the only other program the Committee could tap to generate that level of cuts is Medicare (politically less likely to be cut);
House Agriculture Committee would be instructed to cut spending by $230 billion, likely to come out of Food Stamps (SNAP) and/or farm programs;
House Education and Workforce Committee would be instructed to cut spending by $330 billion, to come out of student aid or other education or training programs in the committee’s jurisdiction; and
House and Senate Ways & Means and Finance Committees would be instructed to raise the debt limit by $4 to $5 trillion (intended to spare Trump an embarrassing vote on raising the public debt limit before the midterm elections).
In total, the Senate’s revised budget plan, over the long-term, could add $45 to $60 trillion to the public debt, and explode the public debt to more than twice the size of the entire economy.
If the budget plan is passed by the House next week, committees would have until Friday, May 9, 2025 to write the tax and spending legislation.
(I have received numerous questions from people concerned about Medicaid cuts impacting healthcare, social services, and long-term care for Americans of all ages, including disabled Americans. If the revised budget resolution is passed, Medicaid cuts will be determined by the House Energy & Commerce Committee. Click here for membership of that Committee. The Chair is Rep. Brett Guthrie. Each of the Committee Members can be reached through the Capitol switchboard at (202) 224-3121.)
Following committee action, the House committees’ language would be packaged by the House Budget Committee—without change—into a single House reconciliation bill; and the same for Senate committee language.
If the two chambers pass their respective reconciliation bills in May, they will appoint a House-Senate conference committee to resolve their differences. It is here that the process might possibly grind to a halt because the House and Senate remain far apart on Medicaid cuts, food stamp cuts, certain tax issues (for example the SALT deduction), and how to measure the deficit impact of the tax cut extensions.
On the other hand, reconciliation bills are filibuster-proof so the GOP will not require any Democratic votes and, as we have seen repeatedly, threats of political retribution (well-funded primary opponents) from the White House have been keeping Republicans in line.
The author worked on multiple reconciliation bills for the Senate Finance and Senate Budget Committees and the White House Office of Management and Budget. See GovBudget.com for daily updates on Reconciliation.
2. TRUMP’S TARIFFS EXPLAINED: On Wednesday, President Trump unveiled his most expansive tariffs to date sending the markets plummeting and risking high inflation, recession, and unemployment.
GLOBAL TARIFFS: Trump imposed 10% tariffs on imports from nearly every country (going into effect TODAY) and imposed higher rates (so-called reciprocal tariffs effective next Wednesday) on goods coming from about 60 specific countries, including:
European Union: additional tariffs of 20%
China: additional tariffs of 34% on top of the 20% tariff already imposed.
Japan: additional tariffs of 24%.
Vietnam: additional tariffs of 46%
South Korea: additional tariffs of 25%
Taiwan: additional tariffs of 32%
India: additional tariffs of 26%
United Kingdom: additional tariffs of 10%
Switzerland: additional tariffs of 31%
Thailand: additional tariffs of 36%
China has already announced 34% tariffs in retaliation.
Canada and Mexico are not included in this latest round of tariffs, though a 25 percent tariff was imposed earlier this year on goods not covered by the USMCA.
Actual increases in prices are expected to differ from the tariff percentage because some of the cost of products comes from distribution and operations inside the U.S.
Energy and “other certain minerals that are not available in the United States” are excluded from the new global tariffs.
Tariffs of this scale have not been seen since the Smoot-Hawley tariffs enacted in 1930, often blamed for deepening the Great Depression.
Previous to these global tariffs, Trump had already imposed:
25% tariffs on imported cars and parts which went into effect Thursday;
25% on any country buying Venezuelan oil (China, Spain India);
25% tariffs on steel and aluminum that went into effect on March 12; and
10% to 25% tariffs on USMCA noncompliant goods from Canada & Mexico.
Ending it rather than mending it: One trade expert accurately observed, “The era of increasingly free and extensive international trade, built upon a rules-based system that the U.S. was instrumental in shaping, has drawn to an abrupt end….Rather than fixing the rules that many U.S. trading partners admittedly took advantage of…Trump has chosen to blow up the system governing international trade.”
Everybody loses in a trade war—businesses, workers, consumers. The National Association of Manufacturers said, “the high costs of new tariffs threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations,” and the National Retail Federation said, the tariffs would “equal more anxiety and uncertainty for American businesses and consumers.”
Trade wars increase the possibility of military conflict. Robust levels of trade among countries lessen their likelihood of going to war because active trading partners search for ways to avoid conflict. For example, robust U.S.-China trading relationships have likely been a deterrent to invasion of Taiwan.
Why does the President have authority over tariffs? The Constitution gives Congress authority over tariffs, but Congress has enacted laws delegating its authority to the President to facilitate negotiation of free trade agreements and to respond to “emergency” situations. Trump’s tariff actions claim that trade deficits are an “emergency”--clearly not what Congress intended.
Despite the Administration’s attempt to mischaracterize tariffs as “external revenue” being paid by foreign countries, tariffs are taxes imposed on U.S. companies importing products from other countries and are passed on to U.S. consumers as higher prices.
More background: A Washington Post analysis of which prices could rise the most; and a CATO analysis explaining there is no relationship between trade deficits (Trump’s justification for tariffs) and economic growth.
Legal Challenge: A Florida company says the President’s tariffs on China violate the Supreme Court’s major questions doctrine, which requires executive actions that present a question of “vast economic and political significance” to be “clearly” authorized by Congress. Read more.
Finally, consider this: The Trump Administration is counting on its tariffs incentivizing countries to move their overseas factories to the U.S. But building a new factory is an expensive and long-term proposition. Trading partners know that Trump changes his mind frequently, his term ends in January 2029, and U.S. labor costs are high compared to most other manufacturing locations.
For daily updates see Bloomberg tariff tracker, NYTimes Tariff Tracker, Washington Post Tariff Tracker, GovBudget.com/tariffs and GovBudget.com/economic-news.
3. DEBT LIMIT X-DATE ADVANCES: Treasury says government may be at risk of default as early as May or June.
On Wednesday, Treasury Secretary Scott Bessent said the federal government is at risk of running out of borrowing authority—and defaulting on U.S. financial obligations—as soon as May or June.
The author managed debt limit legislation as General Counsel for the Senate Finance Committee. See GovBudget.com/key-debt-ceiling-developments/ for daily updates.
4. MAJOR DEVELOPMENTS ACROSS GOVERNMENT:
MAJOR STAFF CUTS AT FEDERAL HEALTH AGENCIES: RFK Jr. began mass firings at the Department of Health and Human Services—about 20,000 to be fired, one-quarter of the Department’s staff. Firings of this magnitude threaten Medicare and Medicaid operations, public health, pandemic preparedness, and U.S. leadership in medical research.
Democrats said the firings and unilateral reorganization of the Department of Health and Human Services violate spending levels set in annual appropriation laws.
Read this fact sheet for the impacts on the Food and Drug Administration (FDA), Centers for Disease Control (CDC), National Institutes of Health (NIH), Medicare and Medicaid Services (CMS), Indian Health Service (IHS), Substance Abuse and Mental Health Services Administration (SAMHSA), Administration for Children and Families, and other HHS agencies. See also the Murray, DeLauro letter to HHS.
FEDERAL JUDGE BARS TRUMP CAP ON NIH RESEARCH FUNDING: The ruling made an earlier temporary order permanent and was followed by the Trump Administration filing an appeal. Under the Administration’s plan, the National Institutes of Health would cap the funding it provides to cover the “indirect costs” of research.
LAWSUIT FILED BY 21 STATES (State of Colorado et.al. v. HHS and RFK Jr.) challenging the legality of HHS terminating $11 billion of public health funding. The lawsuit, organized by the NY Attorney General, alleges that HHS “issued mass terminations for billions of dollars in vital public health funding with no warning and effective immediately” violating the Administrative Procedure Act. The States argue that, contrary to the HHS justification, Congress did not “limit the funding… to the period of the COVID-19 emergency… (and) made wide-ranging public health investments extending beyond COVID-19.” The States also noted that Congress chose to rescind some of the COVID-19 funds, but left these funds in place.
Trump Administration is firing 85% of employees at NIOSH, the National Institute for Occupational Safety and Health, a small agency that focuses on worker safety and health, for example, certifying 9/11 responders for healthcare benefits. “Unions that represent miners, nurses, flight attendants and other professions have criticized the cuts, saying it will slow the identification and prevention of workplace dangers.” Read more.
The Supreme Court voted 5-4 to allow the Administration’s temporary freezing of $65 million for teaching training grants on the grounds of discrimination. The five-justice majority said the Administration was likely to prevail in its claim that District Courts do not have jurisdiction to enforce contractual obligations to make payments which should instead be heard by the Court of Federal Claims. Read more.
A lawsuit was filed Wednesday against the Social Security Administration and DOGE to stop the termination of phone services. Plaintiffs argued the move discriminates against disabled beneficiaries.
The Administration fired U.S. aid workers during deployment to Myanmar to assess earthquake response needs. Read more.
Link to other Key Court Actions Last Week Impacting Government Agencies and Programs, Immigration, and Civil Rights: See the Just Security website or WP Tracker).
5. DEMOCRACY UNDER FIRE: IS A TRUMP THIRD TERM POSSIBLE?
The 22d Amendment to the Constitution is clear and unequivocal: “No person shall be elected to the office of the President more than twice.” The Amendment’s clear intention to prohibit 3rd terms is further underscored by providing, “(N)o person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once.”
However, President Trump said last weekend, “I’m not joking” about trying to serve a third term.
This could be an effort to avoid the political pitfalls of being a “lame duck” who cannot run again, or Trump is actually considering ways to circumvent the constitutional prohibition on third terms. The latter would not be surprising for a President who, barely two months into his term, has repeatedly violated Congress’s constitutional authority over appropriations and the Impoundment Control Act.
There are three ways Trump might attempt a circumvention of the constitutional prohibition on third terms:
(1) Make false claims about election fraud—which he has already done repeatedly about the 2020 election—in order to declare a false “emergency” as justification for interfering with the 2028 election;
(2) Pressure the Supreme Court into accepting the obviously baseless argument that the prohibition on being elected “more than twice” is intended to mean more than twice consecutively; or
(3) employ the “Putin-Medvedev” maneuver by running JD Vance for President and himself for Vice President, with Trump continuing to wield the power (or Vance resigning to elevate Trump). The latter would appear to be precluded by the 12th Amendment which provides that “no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States” but that again is subject to Supreme Court interpretation.
TODAY, THOUSANDS PROTESTED AGAINST TRUMP ACROSS THE U.S.: AP | WPost | WSJ | Politico
THIS WEEK’S RECOMMENDED VIDEO: Highlights from Senator Cory Booker’s (D-NJ) longest floor speech in Senate history; and this short clip from his speech.
About the author: Charles S. Konigsberg, J.D., served as Assistant Director at the White House Office of Management and Budget for three successive Budget Directors; General Counsel at the U.S. Senate Finance Committee; Minority Chief Counsel at the U.S. Senate Rules Committee; Staff Attorney at the U.S. Senate Budget Committee; Director of Congressional Affairs at CFPB and CNCS; and Staff Director of a national bipartisan budget task force. He is an Independent, having served Democratic and Republican Administrations and Senators.
He is author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. (Contact the author for the 2024-25 edition. The 2025-26 edition will be published by Amazon.com after release of the Trump FY 2026 budget this spring.)
He is also Publisher of Appropriations.com which tracks appropriation bills; and GovBudget.com which tracks major federal developments, by subject area, each day.
Speaking engagements and press interviews can be scheduled by calling: (202) 818-8578 or (301) 509-5688. Email comments, suggestions, and questions to: ckonigsberg@capitolpublicpolicy.com.
