Congress
Khanna on Trump White House: ‘They need to have a 21st century understanding of the economy’
Rep. Ro Khanna took sharp aim at President Donald Trump’s sweeping tariff policies on Sunday, warning they’ll raise prices on American electronics rather than bring manufacturing jobs back to the United States.
“I understand they have 19th century policies of McKinley, but they need to have a 21st century understanding of the economy,” Khanna (D-Calif) said on CBS’ “Face the Nation, referencing the Trump administration’s protectionist trade approach and his admiration for President William McKinley. Critics of Trump’s tariff policy have argued that the lessons of McKinley’s 19th century America are not applicable today.
The California Democrat said the White House’s plan to revive domestic manufacturing is already unraveling, pointing to the Trump administration’s decision to exempt smartphones and computers from his tariff regime after financial markets spiraled into chaos last week over his sweeping global tariffs announcement.
“They were chaotic and they were totally haphazard,” Khanna said. “So you had Howard Lutnick on, saying that we were going to bring manufacturing back, and electronics manufacturing back, to the United States, and they realized suddenly that that wasn’t going to happen.”
“Actually, the iPhone price would go up to 1,700 or 2,000 dollars,” he continued. “And by the way, if that manufacturing moved, it would probably move to Malaysia or Vietnam.”
Khanna, whose district includes Silicon Valley, argued that if the U.S. really wants to compete with China and rebuild advanced manufacturing, it needs investment — not tariffs.
“If you want to bring back the manufacturing to the United States, you have to invest in the workforce, you have to have some investment tax credit for the facilities, and you have to be able to buy the things we make in the United States,” he said.
Khanna’s remarks come ahead of a speech he is expected to give on Monday in Ohio — Vice President JD Vance’s home state — where he plans to cast Vance and Trump as “stubbornly cling[ing] to 19th-century dogma in a 21st-century world” with their approach to foreign and domestic policy. The speech also is part of a broader push led by Khanna to position himself as a counterweight to Vance.
“This is not something the president will be able to spin,” Khanna said. “Either we’re going to see new factories come or we’re not, and tariffs just aren’t going to do that. “
Congress
Senate rejects Susan Collins amendment to boost rural hospitals, raise taxes on wealthy
The Senate rejected a bid by Sen. Susan Collins (R-Maine) to raise taxes on the ultra-wealthy and boost money for rural medical providers in the GOP’s megabill.
The chamber voted 78-22 against a procedural motion related to her amendment, which would have increased a rural hospital fund from $25 billion over five years to $50 billion and allowed a wider range of health providers to tap it. The amendment also would have raised the top tax rates for individuals who earn more than $25 million a year and couples earning more than $50 million starting next year.
It remains unclear whether the failure of the amendment could cost GOP leaders Collins’ vote. She had been concerned about the impact on rural hospitals from the bill, and even questioned if any amount in a rural hospital fund would help offset the losses.
“Rural providers, especially our rural hospitals and nursing homes, are under great financial strain right now, with many having recently closed and others being at risk of closing,” Collins said before the vote. “This amendment would help keep them open and caring for those who live in rural communities.”
Most Democrats joined the majority of Republicans in opposing consideration of the amendment. Sen. Ron Wyden (D-Ore.) called it a “Band-Aid on an amputation” that would barely offset the other health care cuts in the bill: “It would be much more logical to simply not cut $1 trillion from Medicaid in the first place,” he said. Georgia Sens. Jon Ossoff and Raphael Warnock and Virginia Sen. Mark Warner were the only Democrats to vote with Collins, along with independent Sen. Angus King of Maine.
Several GOP senators have aired concerns that the bill’s cuts to Medicaid in the bill would force rural hospitals to close. The bill lowers the amount a state can tax a hospital and then use the funding to qualify for more federal Medicaid dollars without having to dip into their own general funds. Hospitals don’t mind the tax because they can get higher payments from their state.
Conservatives have claimed these provider taxes amount to a “money laundering” scheme that enables states to use the extra federal dollars for other things. But the hospital industry has fought this claim, arguing that the provider taxes are needed to help rural hospitals that operate on thin margins.
Congress
The Senate megabill is on a collision course with House fiscal hawks
House fiscal hawks are looking at the math underlying Senate Republicans’ sprawling domestic policy legislation, and they don’t like what they see.
As Senate Republicans try to muscle President Donald Trump’s “big, beautiful bill” for final passage, they’re on track to violate a budget framework brokered between House fiscal hawks and Speaker Mike Johnson. Under that framework, if the GOP piles on tax cuts over $4 trillion, they’d need to match them dollar-for-dollar with additional spending cuts beyond the $1.5 trillion in the House-passed bill.
“The Senate version adds $651 billion to the deficit — and that’s before interest costs, which nearly double the total,” said the House Freedom Caucus in a Monday afternoon post on X. “The Senate must make major changes and should at least be in the ballpark of compliance with the agreed upon House budget framework.”
It’s a wonky hill to die on, but dozens of House conservatives insisted on the deal before smoothing the megabill’s path through their chamber. Johnson at one point told the conservatives they could go after his gavel if he didn’t hold up the deal — what some of the holdouts considered a “blood oath.”
If the House hawks stand by the deal and the Senate bill doesn’t change appreciably during the final amendment vote marathon that got underway Monday, it could force GOP leaders to “conference” the legislation between the two chambers — likely delaying the bill’s passage beyond Trump’s deadline of July 4.
Now compounding concerns for House GOP leaders, who have ordered members back to Washington to start voting on the bill Wednesday morning, billionaire Elon Musk sent new volleys of criticism at Trump’s marquee legislation Monday over the bill’s deficit impact.
“Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame!” said Musk on X on Monday. “And they will lose their primary next year if it is the last thing I do on this Earth.”
The House fiscal hawks have been crystal-clear about their fiscal red lines, though many now privately worry that they could end up getting jammed by Senate Republicans — and by Trump — with a far spendier bill. Johnson on Monday would not address whether the pending Senate bill could pass the House but told reporters he’s long advised Senate GOP leaders to hew as close to the House version as possible.
There’s “a lot of game left to play,” he added.
Notably, a group of 38 House Republicans led by Rep. Lloyd Smucker (R-Pa.) wrote Senate Majority Leader John Thune in early June warning that any changes to the GOP megabill needed to adhere to the fiscal framework laid out by the House. Under that plan, if the GOP includes $4.5 trillion in tax cuts in their bill, then they would need to scrounge up at least $2 trillion in spending cuts.
It’s already looking to be a far cry from what Senate Republicans hope to pass in the coming hours.
According to the Joint Committee on Taxation, the Senate’s plan includes around $4.45 trillion of tax cuts versus the $3.8 trillion in tax cuts passed by the House. But the spending cuts contemplated by the Senate GOP wouldn’t come close to making up the difference, according to the Congressional Budget Office, the other official budget scorer on Capitol Hill.
CBO estimates the Senate plan includes around $1.5 trillion in mandatory spending cuts, but that amount is reduced by around $300 billion in one-time investments in border funding and national security policy.
“The Senate bill is currently out of compliance with the budget framework by $651 billion, which is adjusted for dynamic revenue from higher economic growth,” said Paul Winfree, CEO of the Economic Policy Innovation Center and a top economic official during Trump’s first administration, in a text. “I think it will be very important to get that number closer to $0 to avoid conference.”
Senate Republicans in many ways made steeper cuts to Medicaid than the House, which would have otherwise helped rectify the difference.
But between $200 and $300 billion in spending cuts included in the House-passed bill were knocked out because they didn’t comply with Senate budget rules. The chamber’s parliamentarian, Elizabeth MacDonough, has been in constant talks with Senate Republican and Democratic staff about whether provisions in the legislation are fit for the filibuster-skirting reconciliation process.
“What we’ve been told is somewhere around $250 billion, because I’ve heard $300 and I’ve heard [$200], so I’m gonna split the difference,” said Sen. Markwayne Mullin (R-Okla.) of the sidelined spending cuts.
Mullin added that House Republicans should look at the score of tax cuts under the so-called current policy baseline, which assumes that trillions of dollars of expiring tax cuts would be extended.
“I think it’s up to the House how they want to look at this, because they can go in two different directions,” said Mullin. “If you go underneath current law, then you have a deficit. If you go into current policy, you actually have a surplus of $507 billion.”
Still, prominent Republicans such as Budget Chair Jodey Arrington (R-Texas) and conservative firebrand Rep. Chip Roy (R-Texas) have argued that Senate Republicans still need to do the math as laid out in the House budget, regardless of which baseline they use.
Rep. Keith Self, another Texas Republican, wrote Monday on X that senators are “completely ignoring” the House budget framework. “This isn’t just reckless,” he wrote, “it’s fiscally criminal.”
Meredith Lee Hill contributed to this report.
Congress
Musk goes back on the offensive as megabill moves through Congress
Elon Musk is escalating his assault on President Donald Trump’s “Big Beautiful Bill” as the Senate readies a final vote on it.
The world’s richest man, who until recently played an active role in the Trump administration, attacked the GOP’s sweeping domestic megabill over the weekend. On Monday, he threatened to wield his financial resources against Republicans who support it.
“Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame!” Musk wrote on X. “And they will lose their primary next year if it is the last thing I do on this Earth.”
Musk’s opposition to the megabill, which could cripple the renewable energy industry while adding trillions to the national debt, led to a public break with the president shortly after his time as a federal government employee came to an end in late May.
The two appeared to patch things up several days later.
But Musk is again on the offensive. Also on Monday, he tagged Freedom Caucus members Texas Rep. Chip Roy and Maryland Rep. Andy Harris in another post assailing the megabill.
“How can you call yourself the Freedom Caucus if you vote for a DEBT SLAVERY bill with the biggest debt ceiling increase in history?” Musk wrote.
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