Congress
State budgets land in GOP crosshairs amid struggle to fund megabill
Congressional Republicans agree that the federal government has a spending problem. Now top GOP leaders want to make it someone else’s problem — by shifting some safety-net programs onto state budgets.
The plans under discussion could generate hundreds of billions of dollars in savings to finance the GOP’s domestic policy megabill. But they’re vexing Republican lawmakers — many of them former governors and state legislators — who are not interested in addressing Washington’s fiscal woes by creating them in state capitals, including those run by their own party.
It’s one big reason why Speaker Mike Johnson and Senate Majority Leader John Thune are struggling right now to build consensus for the “big, beautiful bill,” with its expensive suite of tax cuts as well as border and defense spending plus-ups. Already they are scaling back ambitious plans that would force states to either subsidize health and food aid or kick thousands of residents off benefit rolls.
“Most of us are not interested in simply shifting costs,” said Sen. Mike Rounds (R-S.D.), a former governor, who warned “there most certainly would” be significant pushback from states if the GOP proceeds with cost-sharing plans.
“I hope to goodness we don’t go there,” added Sen. Jim Justice (R-W.Va.), another former governor, whose constituents are heavily reliant on federal programs.
The mathematical impetus for the GOP proposals is straightforward enough: The tax cuts that President Donald Trump and Republican leaders are eyeing are estimated to cost $5 trillion or more over the coming decade. Offsetting that cost requires more than shaking the couch cushions, and two safety-net programs have emerged as particularly appealing targets.
Together Medicaid and the Supplemental Nutrition Assistance Program, formerly known as food stamps, account for about $1 trillion in yearly federal spending. Republicans are mostly unified on instituting work requirements, tightening eligibility verification, excluding undocumented immigrants from benefits and cracking down on waste, fraud and abuse. But to achieve even deeper cuts, they are looking to make states pick up more of the tab.
Medicaid has been a joint federal-state program since its creation in the Great Society era, but its 2010 expansion under the Affordable Care Act put the federal government on the hook for 90 percent of the costs for newly eligible beneficiaries. States, meanwhile, have never had to bear the costs of SNAP benefits, though they are responsible for a portion of administrative costs.
Under some House GOP proposals now under consideration, states would have to assume a greater share of the cost for the Medicaid expansion population while also bearing a portion of SNAP benefit costs for the first time. Republicans are also exploring whether to curtail health provider taxes states frequently use to finance their Medicaid costs.
Together, it could shift hundreds of billions of dollars yearly to state budgets that are already strained as federal pandemic aid runs out and other Trump administration cuts take effect. In California, for instance, lawmakers are preparing for a minimum $10 billion budget shortfall for the fiscal year starting July 1, with that number set to triple at least in 2026.
The National Association of State Budget Officers has found that Medicaid makes up more than half of federal funding to states. Brian Sigritz, the group’s director of state fiscal studies, said in an interview that states will either have to raise taxes, cut benefits or slash other programs in response to the slew of changes impacting their budgets. Sigritz said the impact will be “cumulative.”
“It’s clear states won’t be able to absorb the federal cuts and cost shifts in recent federal actions and congressional proposals,” Sigritz said. “States are required to balance their budget, and states won’t be able to fill in the gap.”
Republicans have trained much of their criticism on Democratic-run states that, they argue, run those two programs wastefully. But millions of low-income families in red states also rely on the programs for health care and food aid, and some of the latest GOP plans would actually hurt deep-red states even more than others — including a reworked SNAP state-cost share plan.
That has fueled the intra-GOP backlash, with many Republicans in the House and Senate shorthanding their opposition by insisting they will not “cut benefits” — meaning they might tolerate work requirements and other ancillary changes but not changing the federal government’s core responsibilities.
Rep. David Valadao, one of the most vulnerable Republicans up for reelection in 2026, is a former state legislator who sharply criticizes the fiscal management of his home state of California. But he’s also wary of putting a greater financial burden on states like his.
“California has kind of blown it on some of these fronts,” Valadao said. “So it puts me as a Californian in a difficult position.”
Rep. Derrick Van Orden (R-Wis.) stood up during a closed-door House GOP conference meeting Tuesday morning to warn about the SNAP proposal’s impact on his home state of Wisconsin’s budget. Alongside Van Orden sat dozens of House Republicans in states that would be hit even harder.
GOP leaders have pulled back from some of the farthest-reaching proposals. The House Agriculture Committee had been eyeing having states pick up a 25 percent share of SNAP costs; the latest proposal would start at 10 percent for states with the lowest rates of overpayments. “No one likes this,” said one Republican granted anonymity to describe private sentiments inside the party, “but we need to reach these cuts.”
As for Medicaid, Johnson on Tuesday ruled out cutting the federal reimbursement rate and suggested that an alternative — per-capita caps on federal reimbursements — would also be excluded.
But other proposals — like limiting state provider taxes — remain on the table, and so far the public pushback inside the House GOP has been relatively limited. That’s not true in the Senate, where most Republicans hate the idea of saddling states with billions of dollars in new financial burdens — though discussion continued about cutting the federal share for some Medicaid beneficiaries at a party retreat Wednesday, according to two senators who attended and were granted anonymity to describe the closed-door event.
Sen. Thom Tillis (R-N.C.), a former state House speaker, has warned against catching states off guard on Medicaid changes and said he plans to call members of his own state legislature to discuss the percolating proposals. Sen. Kevin Cramer (R-N.D.), another veteran of state government, said shifting costs to states “may make [the federal] numbers look better … but it still becomes a burden.”
Senate Agriculture Chair John Boozman (R-Ark.) said in an interview that he has “concern” about sharing costs for food aid and that his panel is not pursuing the idea. Sen. John Hoeven — who, like Boozman, is in frequent contact with House Agriculture Chair G.T. Thompson (R-Pa.) — said he was skeptical the House would ultimately follow through: “I’d put that in the category of, let’s actually see if they do it.”
New cost-sharing mandates could stick GOP-dominated states such as Alaska, West Virginia, Mississippi, Louisiana, Oklahoma, Alabama and Florida with multi-billion-dollar annual bills — forcing high-stakes choices for state officials who would suddenly have to worry about their own political hides. Even White House officials have privately fretted about a potential “one-two punch” for red states, leaving many in the GOP much more comfortable with the less drastic proposals, such as work requirements.
“I think the politics of work are a lot lighter burden to carry than just pushing off some of the costs to the states,” said Sen. John Cornyn (R-Texas), who is seeking reelection next year.
Samuel Benson, Rachel Bluth and Eric He contributed to this report.
Rep. Lori Trahan on Wednesday unveiled a discussion draft for a bill that would make artificial intelligence developers liable when their products cause harm.
The legislation comes after OpenAI’s agents escaped containment and autonomously hacked into AI platform Hugging Face and accessed U.S. government websites.
The Clear Liability for Artificial Intelligence Misconduct Act aims to make it easier for those harmed by so-called rogue AI to bring claims against developers. Trahan’s bill does not preempt new state laws on AI liability — historically a prerequisite for attracting Republican support in the House.
“When someone breaks the law and hurts you, you can take them to court. That shouldn’t change just because the wrongdoer is an AI agent,” Trahan (D-Mass.) said in a statement. “Developers have already built systems capable of acting on their own and causing real damage. The CLAIM Act makes sure they answer for what their systems do.”
Legal experts have warned that existing laws require proof of intent or negligence, standards that can be difficult to show in court when AI models go rogue.
Trahan’s bill would ensure AI developers are unable to argue that their AI systems are incapable of intent. Instead, courts “would presume an AI system acted with the state of mind a person taking the same actions would have had.”
Trahan spokesperson Francis Grubar said work on the CLAIM Act began almost immediately after theJuly introduction of the FRONTIER Act, legislation with Rep. Jay Obernolte (R-Calif.) that would grant the government power to restrict the deployment of AI models deemed to pose catastrophic risks. While that bill aims to prevent serious harms before they happen, Grubar said the CLAIM Act would address how to impose accountability for existing damages.
Unlike an AI liability proposal announced last week by Sens. Josh Hawley (R-Mo.) and Chris Murphy (D-Conn.), Trahan’s legislation would not amend the 1986 Computer Fraud and Abuse Act. Grubar said the CLAIM Act would instead impose clearer liability on a broader range of harms, as well as autonomous or AI-enabled cyberattacks.
The CFFA, an anti-hacking law that bars individuals from accessing a computer without consent, requires proof of intent to hack into a computer system, which can’t be as easily applied to AI agents.
The Hugging Face incident, along with a flurry of other disclosed hacking incidents by rogue AI agents from OpenAI and other AI developers, has sparked a debate over how companies should be held legally liable for their AI systems.
OpenAI CEO Sam Altman, in an interview with Blue Light News’s Decoded podcast, said there should be a new “liability framework” to hold developers accountable for AI-powered cyberattacks. His comments come after White House officials like Director of National Intelligence Jay Clayton, who was recently appointed as AI czar by President Donald Trump, previously said that existing product liability laws are sufficient for now in addressing AI’s risks.
Vice President JD Vance will take questions from Michigan voters in a CBS News town hall airing Oct. 17 as the Trump administration prepares a closing message to voters ahead of the midterms.
The town hall comes amid a blitz of campaign events for Vance and President Donald Trump as their party faces multiple headwinds that could cost them control of the House and Senate.
Michigan’s Senate contest between Democrat Abdul El-Sayed and Republican Mike Rogers has become one of the cycle’s closely watched battleground contests. Michigan also has several competitive House races and will elect a new governor for the first time in eight years.
Vance campaigned in Michigan with Rogers, gubernatorial nominee John James and Mike Bouchard Jr., the GOP nominee in the 10th Congressional District, at an Aug. 31 rally in Sterling Heights. Rep. Lisa McClain also appeared at the event.
The one-hour special, moderated by “CBS Evening News” anchor Tony Dokoupil, will be recorded earlier in the week. Vance and Dokoupil will discuss issues facing voters, including affordability, tariffs, immigration, health care, artificial intelligence, the war with Iran and the state of American democracy, according to CBS News.
The two were scheduled for a town hall interview in March, but the vice president postponed due to the war with Iran.
The vice president’s office did not immediately respond to a request for comment.
Sen. Maria Cantwell, the top Democrat on the Commerce Committee with vast jurisdiction over artificial intelligence policy, outlined six AI safety principles Wednesday morning — tenets she believes should underpin any legislation to stave off the greatest threats posed by the rapidly-evolving technology.
“To manage risks from advanced AI systems we need clear safety standards, continuous testing, and reporting of serious failures,” the Washington Democrat said in a statement. “America can lead the world in AI by building systems that are not only more capable, but safer and more secure.”
Cantwell’s framework would encompass six priority areas: enforceable safety standards for frontier models, continuous testing, disclosure and oversight, public-private partnerships, protection for children and workers and adherence to U.S.-led global standards.
To directly address risks posed by the technology, her framework would have federal experts at the National Institute of Standards and Technology and other agencies establish clear federal rules to address harms, with specialized standards for open-source AI models to reduce risks of catastrophic misuse.
The senator is also recommending that the federal government provide developers with guidance on how to accelerate U.S. leadership on AI without sacrificing basic safety protocols.
On testing, Cantwell argues the government and independent experts should provide constant oversight and “continually scrutinize and stress test covered AI models,” particularly when sensitive information or secure facilities are involved.
She also says AI systems must have built-in safeguards to ensure they halt self-modification that could bypass safety controls. And she states that advanced models should not be released until they have undergone an independent, comprehensive audit — similar to outside auditors examining a company’s financial statements.
Cantwell, a former tech executive, has for years pursued similar priorities. But her new framework comes ahead of a midterm election that could return control of the Senate to Democrats, handing Cantwell back of the Commerce Committee gavel.
It also comes as lawmakers are under pressure to regulate the AI industry but are showing few signs that they will be able to reach consensus, across the aisle or even within their own party.
Senators had hoped for hearings, markups and briefings on AI legislation before leaving Washington until after the November elections, but little progress was made. Sen. Ted Cruz (R-Texas), the current Commerce Committee chair, has continued to say he intends to hold a markup on AI-related bills but has punted multiple times, saying senators have yet to reach agreement on any bipartisan measure.
Senate Majority Leader John Thune and Sen. Amy Klobuchar (D-Minn.) have been trying to cut a deal on legislation to prevent and contain catastrophic risk from runaway AI technology, but bill text has so far failed to materialize.
Cantwell’s approach laid out Wednesday morning would be stricter and more comprehensive than what Thune and Klobuchar are expected to ultimately produce, based on similar legislation they have offered in the past.
Her approach of “constant oversight and vigilance” would also serve as a contrast to that of GOP leaders, who have consistently called for a “light touch” regulatory regime.
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