Progress in House; Long Slog Continues in Ukraine
Author: Greg Valliere
May 21, 2025
YESTERDAY’S REPUBLICAN MEETING with President Trump had it all — tension, anger, humor and signs that a “big beautiful bill” eventually will pass, probably by the August recess.
IF THERE WAS A FLOOR VOTE today, the measure probably would fail. But Trump twisted enough arms yesterday to get a tentative deal on the state and local tax break, leaving two major obstacles:
THE EXTENT OF SPENDING CUTS, or to be precise, the extent of how much spending growth will be slowed. Fiscal hawks want at least $2.5 trillion in spending reductions over ten years, but that still would allow the deficit to rise by several trillion dollars.
HOW MUCH TO SLOW MEDICAID SPENDING: The hawks — with plenty of pushing from the Wall Street Journal — want Medicaid spending to slow for able bodied young people, and this may be the biggest issue of all.
TRUMP WILL BE THE KEY, OF COURSE: He promised to leave Medicaid alone and he said yesterday: “Don’t f— with Medicaid.” What if moderate Senators and Congressmen thwart Trump? He vowed to “primary” them, booting them out of 2026 races, replacing them with MAGA conservatives.
BOTTOM LINE: We continue to believe the bill will pass, and we continue to believe the jockeying between the House and Senate could take well into the summer.
* * * * *
TRUMP REPORTEDLY IS FURIOUS with Vladimir Putin, who continues to stall on a cease fire; Trump has met his match, with little progress in negotiations. Trump now threatens to simply walk away from the negotiations, leaving this quagmire to Europe.
SOME IDEALISTS THINK the Pope could broker a deal, but that’s a long shot. Trump infamously said he would end the war in 24 hours — but his failure to get a deal is a major embarrassment.
PLAN B IS THE SO-CALLLED “GOLDEN DOME” MISSILE SHIELD, which will cost $175 billion over the next three years of Trump’s second term and eventually protect the U.S. The spending continues, Moody’s be damned.
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