This is an audio transcript of the FT News Briefing podcast episode: ‘Swamp Notes — How Medicaid cuts could shake up Maga’
Kasia Broussalian
Cutting government assistance programmes like Medicaid has always been treacherous territory for American politicians. The health insurance programme for low-income residents is used by millions of people. But as a budget battle brews in Congress, some Republicans are thinking about putting it on the chopping block. The problem, as former White House adviser Steve Bannon put it, a lot of Maga is on Medicaid.
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This is Swamp Notes, the weekly podcast from the FT News Briefing, where we talk about all of the things happening in US politics. I’m Kasia Broussalian, and this week we’re asking: will Medicaid cuts threaten Trump’s hold on Republicans? Here to discuss with me is James Politi, he’s the FT’s Washington bureau chief. Hey, James.
James Politi
Hey, Kasia.
Kasia Broussalian
And we’ve also got Guy Chazan who covers the US for the FT, and has recently been looking into America’s love-hate relationship with Medicaid. Hey, Guy.
Guy Chazan
Hi.
Kasia Broussalian
So Guy, break it down for maybe some of our international listeners. What exactly is Medicaid and just how important is it?
Guy Chazan
It’s a government health insurance programme for people on low incomes, and it serves one in five Americans. It really is a massive programme that takes up a large part of the federal budget. And it’s become increasingly important, especially in recent years after President Obama implemented the famous ACA, Affordable Care Act, which was nicknamed Obamacare and that massively expanded the reach of Medicaid. So since then, there’s been a big uptick in the number of people covered by it. So it really has become, in recent years, a very important federal transfer, federal entitlement for people on low incomes.
Kasia Broussalian
And James, why is the conversation around cutting Medicaid happening right now?
James Politi
Well, the conversation is happening now because, you know, President Trump is in the White House. He has a full control of Congress through the Republican majorities in the House and the Senate. And his big legislative goal for the year is to pass what he calls a big, beautiful bill that will extend, you know, the Trump tax cuts that he passed in 2017. He has to find a way to pay for those tax cuts, and Republicans on the Hill are looking for spending reductions wherever they can. And Medicaid, among the big, you know, spending items on the federal budget is one of the prime targets. And the energy and commerce committee has been directed on Capitol Hill to cut $880bn, and so, you know, there’s actually a target that Republicans in the House have set, even though the specifics of how exactly they’re gonna get there haven’t been nailed down yet, and it’s not a binding commitment.
Kasia Broussalian
Right. So the concern is, is it actually possible to get to $880bn without cutting Medicaid? And now I guess I’m wondering, what’s the timeframe that Republicans have in order to pull this off?
James Politi
This negotiation has to get done by the end of the year because if the tax cuts are not extended by the end of the end year, then they expire, which means that, actually, the income tax rates for all Americans and for business will go up again. They’ll revert back to where they were before Trump’s 2017 tax cuts. And so the White House and Republicans on the Hill want to get it, the first stages of it, passed in the spring or the summer, but the actual deadline is really the end of the year.
Kasia Broussalian
All right, now, Guy, the numbers on how many people use welfare programmes, even just beyond Medicaid that you were talking about, they’re really extraordinary. I mean, I’m just looking at something that you’ve written recently. It says here that more than half of US counties get at least a quarter of their income from government transfers. Yes. A lot of people are really relying on these transfer programmes. and many of them also voted for Donald Trump. Now, you were recently in the state of Louisiana talking to people about that disconnect. What’d they tell you?
Guy Chazan
Well, for example, when I was in Bogalusa, this town in Louisiana, I spoke to a woman called Bethany. She didn’t give us her name, but basically she’s about to give birth to her third baby and Medicaid will cover the whole cost of delivery. And basically I said to her, well, how do you feel about this? The fact that the Republicans might be cutting this programme. And she was really sort of flabbergasted by that. You know, she said, I didn’t know this was gonna happen. I voted for Trump, but he never talked about doing this.
We can’t afford this ourselves right now. We can’t afford to pay for this treatment. But I think, you know, it was an interesting tension because she’s a Trump voter, as many people are in Louisiana. And I think they weren’t really aware when the election happened that this was coming down the road, that there could be cuts. I mean, obviously, we have to be careful here because the programmes haven’t been cut yet. We don’t know what’s gonna happen, but it does look like certain Republicans in Congress are determined to use this opportunity to curtail the programme. Whether they’ll succeed is another matter. But that’s gonna be a rude awakening for a lot of people in Bogalusa, in Louisiana for people like Bethany who may lose a lot of her health insurance as a result of this.
Kasia Broussalian
So Bethany said that Trump didn’t really talk about cutting Medicaid while on the campaign trail. What has he said, you know, along with Republican leadership about the issue since?
Guy Chazan
Well, I think it’s very complicated. I mean, basically Trump has always said during the campaign that for him, programmes like Medicaid are sacrosanct. He said, you know, we love and cherish Medicaid and also Social Security. And people that I spoke to on the ground there sort of said, well, we take him at his word and indeed other Republicans, for example, Mike Johnson, the Speaker of the House, who is actually from Louisiana as well, where I was, he has said that they’re not going to cut the programme. They’re gonna target things like waste and abuse and fraud.
But other parts of Trump’s coalition had take a different view. You have people in the Freedom Caucus, for example, in Congress who are very hawkish on fiscal matters. And you also have Elon Musk, who is wielding his chainsaw and saying that there has to be a massive campaign to eliminate fraud in entitlement programmes. I mean, he talked of $500 to $700bn worth of fraud, which many budget specialists have questioned.
Kasia Broussalian
Yeah, well, James, talk a little bit more about that. How do you see these two factions that guy’s talking about here? You know, on the one hand, the fiscal hawks, but also billionaires like Elon Musk and then other lawmakers who are also concerned about spending for Medicaid, how do these two factions affect Donald Trump?
James Politi
Well, it’s very interesting because Trump and, you know, increasingly Republicans have been casting themselves as the party of the working people, that Maga, its identity is, on the economic front, is of populist policies that are more directed towards helping working people than the traditional Republican platform of simply tax cuts for the rich, fiscal conservatism, pro-business, pro-corporate regulation. Trump has sort of changed the equation to a certain extent. And he made a lot of gains with lower-income voters across the spectrum, really, in the 2024 election. But this is a big test of whether the White House and Republicans in Congress are, in a certain sense, gonna hold true to their, sort of, new mantra of populist economics, being on the side of the working people, being on a side of more low-income individuals. And they risk a backlash if ordinary Americans who are struggling are suddenly deprived of health insurance. And that’s why the Democrats are trying to jump in on this because they’re trying to say, well, look, you know, this whole business of we’re the party of the working people isn’t actually true. They’re cutting your healthcare insurance. How could they be on your side?
Kasia Broussalian
Well, you know, what’s interesting to me is both of you kind of bring up these two factions when ostensibly, I think the narrative around the Trump administration up until this point has been very much that Trump kind of has a pretty complete control over the Republican party. You’re not seeing a lot of pushback, but is that not as iron clad as it seems? What do you guys think?
James Politi
Well, at the moment, it’s very hard to see any pushback on Capitol Hill. It’s very hard to see anyone come out and say, I disagree with President Trump. I don’t wanna do this. His focus, actually, has not been on Congress so far. He’s been taking executive action left and right. All the actions that we’ve seen have come really from the White House, and he hasn’t prioritised the congressional negotiations. Once we get into the sort of heat of the tussle on Capitol Hill, I think we’ll expect Trump and White House officials to turn the screws and try to get this legislation passed. The tax cuts are really, really important for Trump.
Kasia Broussalian
Guy, what do you think? What could actually make this debate over Medicaid cuts, you know, existential for Donald Trump?
Guy Chazan
Well, as James said, a lot of his victory in November was down to the fact that he tapped new sources of support for the Republican party, you know, poor Hispanic voters, poor African-Americans. A lot of these people voted for him because he promised to bring prices down from day one. That was part of his appeal. He castigated Joe Biden for the inflation wave under his presidency, and he said he was going to counteract that. Now there’s little evidence that that has actually happened, but I think a lot of working class people voted Republican this time. That’s my impression, anyway, because of his promises to tackle the cost of living crisis. Now, if the Republicans cut Medicaid, then that really cuts across those sort of promises and there could be a backlash.
I think we’ve seen something similar before. Democratic legislators I was talking to brought up the 2018 midterms when the Republicans really wanted to abolish Obamacare, the Affordable Care Act, and they didn’t succeed and there was a big backlash against that and that really helped the Democrats in the midterms then. And they’re hoping they can repeat the trick this time. If there’s another attempt to sort of slash Medicaid, that could really backfire for the Republicans in the midterms in 2026.
Kasia Broussalian
So, James, in the end then, where do we stand on the budget fight?
James Politi
Well, I think it’s kind of, you know, a game on at the moment. I think that the battle lines are being drawn. The Republicans in the Senate and the House are trying to all get on the same page. And then they will have to proceed to clear the first hurdles. The Republicans are trying to pass this legislation through a process called reconciliation, which means that it can sort of fast track measures that are related to the budget with a simple majority in the Senate. But for that, they will need extraordinary unity. And on the House side, the Republican margin is incredibly slim. They only have a few votes to spare. And actually, there are a few special elections coming up that they’re worried about. So the first sort of mission for the Republicans is to get everybody on board, and it’s not easy.
Kasia Broussalian
All right, we’ll have to check back in with you when it comes to ahead. I wanna thank our guest, Guy Chazan, covers US politics and society for the FT. Thanks, Guy.
Guy Chazan
Thank you.
Kasia Broussalian
And James Politi, he’s our Washington bureau chief. Thanks, James.
James Politi
Thanks, Kasia.
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Kasia Broussalian
This was Swamp Notes, the US politics show from the FT News Briefing. If you wanna sign up for the Swamp Notes newsletter, we’ve got a link to that in our show notes. Our show is mixed by Sam Giovinco and produced by Katya Kumkova. Special thanks to Pierre Nicholson. I’m your host, Kasia Broussalian. Our executive producer is Topher Forhecz and Cheryl Brumley is the FT’s global head of audio. Original music by Hannis Brown. Check back next week for more US political analysis from the Financial Times.
