Senate Republicans are deeply divided over how to cut the cost of House-passed legislation to enact President Trump’s agenda, which Elon Musk has attacked as a “mountain of disgusting pork” and fiscal conservatives on Capitol Hill say doesn’t do enough to cut the deficit.
Facing a jittery bond market and scathing criticism from Musk, GOP lawmakers have expanded their search for ways to reduce the deficit by cutting Medicare, the Defense Department and the Federal Reserve — areas of the budget that were considered off limits just a few weeks ago.
But each new proposal is creating new divisions.
Sen. Josh Hawley (R-Mo.) is warning colleagues to steer clear of cutting Medicare spending, even though proponents of the idea insist it would be targeted only on “waste, fraud and abuse.”
“I don’t like this idea of fiddling with Medicare at all,” Hawley said. “I think it’s a bad idea. We should not do that. I’ve counseled against it.”
“How about instead we cap the price [Centers for Medicare & Medicaid Services] is paying for prescription drugs? Why touch Medicare?” he asked.
Other Republicans want to look at Medicare Advantage plans provided by private insurance companies as an alternative to traditional Medicare. They say that “fly-by-night” health care providers are abusing the program and bilking the federal government.
Sen. Roger Marshall (R-Kan.) said lawmakers are discussing a proposal sponsored by Sen. Bill Cassidy (R-La.) that could save up to $275 billion by cracking down on insurance companies that over-charge Medicare Advantage.
“No one is more concerned about our national debt than I am. I would like to cut more money on this bill. If it was up to me, we would be going from $7 trillion a year to $6.5 trillion,” Marshall said, proposing a half-trillion dollars in deficit reduction over the next decade.
Some Republicans are also calling for a closer look at defense spending, arguing that the Pentagon needs to see its budget shrink along with the rest of government.
While the House-passed bill includes $150 billion in new funding for the Defense Department for new programs, such as Trump’s “Golden Dome” missile defense shield, fiscal conservatives say there’s a lot of bloat in the defense budget that should be eliminated.
Sen. Rand Paul (R-Ky.) says defense hawks have a “hidden agenda” to use Trump’s big, beautiful bill to pump up military spending beyond what the nation could afford.
“It’s a frustration for those of us who think it ought to be about fiscal restraint and/or cutting taxes, or both. It ends up becoming a spending bill and the spending is $150 billion on top of [what] they were already increasing the military” in the regular appropriations process, he said.
“If you’re fiscally conservative, you have to be fiscally conservative everywhere. You can’t be for blowing the budget out on the military,” he argued.
Marshall says he would also support military spending cuts.
“I’m one of the few Republicans that thinks that defense has more than enough money,” he said.
But cuts to the Pentagon’s budget would face strong pushback from Senate Armed Services Committee Chair Roger Wicker (R-Miss.) and Defense Appropriations Committee Chair Mitch McConnell (R-Ky.), who argue that Trump’s defense budget is inadequate.
Wicker earlier this year called for $175 billion in new defense funding to be included in the reconciliation package but later relented to $150 billion, which he says is the minimum needed.
McConnell is expected to press Defense Secretary Pete Hegseth about Trump’s defense appropriations request on Tuesday.
Sen. Ted Cruz (R-Texas) has proposed stopping interest payments to banks that deposit cash at the Federal Reserve, which he says would save $1 trillion over the next decade.
But that proposal is already facing a backlash from the banking industry, which has come to depend on the payments as a steady cash flow.
Strategists at JPMorgan Chase & Co. are warning that eliminating interest payments would create turmoil in the financial markets and predict the proposal isn’t going anywhere, according to Bloomberg News.
Proposals in the House-passed bill to cut nearly $800 billion in Medicaid spending and $267 billion in Supplemental Nutrition Assistance Program spending are running into objections from Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and Jerry Moran (R-Kan.).
So are provisions to terminate renewable energy tax breaks that could strand tens of billions of dollars in investments to Republican states, such as West Virginia, where the Appalachian Regional Clean Hydrogen Hub is in danger of losing funds if construction isn’t underway before the end of the year.
Sens. Thom Tillis (R-N.C.), John Curtis (R-Utah) and Shelley Moore Capito (R-W.Va.) are sounding the alarm over the immediate phase-out of clean energy tax breaks, which they warn would disrupt their state economies and cost jobs.
On the other side of the argument are conservatives such as Sen. Mike Lee (R-Utah), who say the bill doesn’t go far enough to cut off Medicaid benefits to illegal immigrants, and Sen. Rick Scott (R-Fla.), who wants to immediately repeal the climate-oriented tax breaks enacted by Biden’s Inflation Reduction Act.
“We’re talking about Medicaid, we’re talking about EITC, earned income tax credit, child tax credit, and eligibility for claiming the benefits of dependents for income tax purposes. Those things should be benefits available to citizens and lawful permanent residents and not others, not illegal migrants,” Lee told The Hill.
Lee says the House bill doesn’t completely shut off federal benefits to illegal migrants and declared “that’s the problem.”
Scott, meanwhile, says subsidies for clean energy programs need to be cut off promptly to help reduce the deficit.
“We got a fiscal crisis,” he said. “We have to balance our budget.
“We should completely eliminate the Green New Deal, that’s No. 1,” he declared.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
For the latest news, weather, sports, and streaming video, head to The Hill.
