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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, everyone. We told you yesterday that we would lead today with what we're learning from the all-nighter that members of the House of Representatives have just pulled on the fate of Medicaid coverage for millions of Americans, the SALT tax deduction, tax breaks for billionaires, and other items in the budget bill that Politico, for example, describes as the central legislation of the Trump 2.0 Project.

Its fate was uncertain enough, though, as you may have heard, that the President himself went to Capitol Hill for a last minute lobbying trip yesterday, and even dropped an F-bomb on his fellow Republicans. We'll explain why, and where it all stands, with who knows how many Congress members and journalists, however bleary eyed at this point, and I wonder what else they slipped in there in the middle of the night, that they hoped we wouldn't notice.

No Democrat will vote for this bill, so the Republicans can only lose two votes from their side of the aisle. Up with us now. With us now, I should say, the up since the crack of dawn herself, and that's pretty early this time of year. Marianna Sotomayor, who covers the House of Representatives for The Washington Post. Marianna, thanks for doing this. Welcome back to WNYC.

Marianna Sotomayor: Of course, thanks for having me.

Brian Lehrer: They started at 1:00 AM. Is this still going on?

Marianna Sotomayor: Oh, yes, it's still going on, and it's expected to go for several more hours. A number of the chairmen from different committees, and also ranking members are finishing testifying about what's in their portions of this, as it's called, "One big, beautiful bill." Should expect Democrats to actually introduce dozens of amendments, so that's going to go into way, way late this morning, and honestly, that is actually a lot of hours that Speaker Mike Johnson still needs to finish negotiations, because those talks are still ongoing.

Brian Lehrer: Yes, and you identified in your reporting six Republican red lines that are complicating passage of this budget central legislation of the Trump 2.0 project, as it's been described. I want to get to at least three of them in our conversation now, Medicaid, the SALT deduction, and the deficit. The President's F-bomb yesterday was about Medicaid. Without putting our FCC license at risk. Marianna, what did the President say, and who was it aimed at?

Marianna Sotomayor: Yes, he was very blunt saying, essentially, don't mess around with Medicaid. What he was referring to there is this big debate that's been happening among moderates, and the far right in the House Republican Conference. There's also been some senators like Josh Hawley in particular, who has been saying, "We should not be cutting people off from receiving Medicaid benefits."

Of course, House Republicans, especially more so on the fiscal conservative side, really want to reduce the deficit, and in order to do that quickly, you're going to have to cut into Medicaid, and other social safety net programs, so what Trump is saying, and it is a pretty populist message, and he has been saying it for some time, is that beneficiaries should not be touched in this process, so that was his message, but of course, it was left to interpretation by some lawmakers in the room yesterday.

There's a number of fiscal hawks who heard that and said, "Well, Trump also did say, 'You can cut waste, fraud, and abuse.'" That has been the guiding light for many House Republicans, how they argue for a number of these cuts publicly, but again, a number of these cuts based on a lot of projections now coming out, seems to put beneficiaries at risk.

Brian Lehrer: Your article that got posted at 5:04 AM this morning quotes Budget Committee Chair Jodey Arrington of Texas to some of what you were just saying. Saying, "There's a debate among the House Republicans about where the waste and fraud is, versus restructuring the program."

Is that a nice way of saying, many of them are not that focused on actual waste and abuse. They just don't want as many people to have heath being covered by health insurance by the government?

Marianna Sotomayor: Yes, it's like you said, left up to interpretation in some ways. There's many arguments, depending on who you're listening to, and what ideological flank they belong to, who define waste, fraud, and abuse differently. I mean, waste, fraud and abuse, we've heard from the Trump administration, as well as from the speaker's office. They've been defining that as people who have been abusing the system.

Democrats pointing out, "Well, if your definition of abusing the system is potentially kicking off single mothers," there's a provision in there, where based on a certain cap that they should be making. There's parents, who once their children turn seven, they have to be able to work to receive any Medicaid benefits, so by definition, they could be losing a little bit of coverage there.

That workplace requirement is actually something that Republicans are still debating at this hour, when they should kick in. Fiscal hawks would like to see those work requirements, and people actually be able to work to receive them, sooner rather than later. Currently, the bill text says 2029. Fiscal hawks are hoping that it kicks in as early as later this year.

Brian Lehrer: Next topic, the SALT tax cap. By way of background, for people who still don't know what this is, it used to be before the Trump tax law of 2017, that all state and local taxes were federally tax deductible. That got reduced to only the first $10,000 of SALT, State and Local Taxes, much less than many middle class homeowners pay in property taxes, for example.

It's seen as a big, blue state issue. New York, New Jersey, Connecticut, California. Remind us why Trump wanted that cap in the first place. Was it largely like literally to punish people in states that didn't vote for him?

Marianna Sotomayor: Yes, so it's an interesting thing to mention, because Trump at the time, obviously, was a New Yorker, but I do not believe, having covered the 2017 tax debate at that time, he was intimately involved with these specific details. Really, where the pressure came from, was from then Speaker Paul Ryan, and his leadership team. At the time, there weren't as many swing district Republicans in these blue states, so in order to reduce the cost, overall cost of this bill, they did not mind punishing blue states.

They, of course, argued they had to pay their fair share of the deal. Why should Republican with smaller state incomes be paying for these blue states? It's actually an argument you continue to hear from some more fiscal hawks on Capitol Hill, so the difference is purely based on what the House majority looks like right now. Extremely thin, and a lot of the majority makers do come from these blue states, and they are-- It's a real red line.

They put their foot down for several months saying, "If we don't get a good deal, we're not voting for this bill," and reminder, that once this bill gets to the floor, Mike Johnson can only lose three Republicans if all members are present in voting to be able to send this bill to the Senate.

Brian Lehrer: Again, this is a basic thing which seems to be crucial as you're indicating to getting some New York Republicans, in particular, to vote for the budget. I see that aversion being floated in the last day, raises how much state and local tax would be federally tax deductible from $10,000 to $40,000. Is that enough for New York members like Nick LaLota from Long island, or Mike Lawler from North of the city, who've been vocal about this?

Marianna Sotomayor: It is. It seems like it is. This isn't something that actually happened overnight. Leaders have been back and forth with these six Republican members who, initially, leaders had floated that 30,000 cap for the deduction, and the six said, "No, hell no," is what LaLota actually said. This seems to be something that's more amenable to them. The problem is, the more you raise the cap, the more that it adds to the deficit, so as these details are coming out about what's in this agreement with these SALT lawmakers, it is really upsetting far right lawmakers in the House Freedom Caucus. They are now even more so less open to voting for the bill overall, because they are the big deficit hawks in this conversation.

Brian Lehrer: Next point of contention. From your article's list of six that I was going to get to anyway, is the deficit, and listeners, if you're just joining us, my guest is Marianna Sotomayor who covers the House of Representatives for The Washington Post. As they are still going with the all-nighter into the all-morninger that they started at 1:00 AM to try to resolve all the disputes in this Trump budget bill, which is, again, as Politico put it, "The central project, the central legislation anyway of Trump 2.0."

Next point of contention is the deficit. One piece of big news the last few days is that Moody's downgraded US government debt from a AAA rating to AA, citing concerns about mounting debt, that'll make interest rates go up to reflect the additional risk. Is that bit of news informing the debate on the bill at all?

Marianna Sotomayor: It is. Republicans, at this point, many of them would rather not hear all of these projections that are coming out. We've talked to a couple of lawmakers who have really just said, "Oh, all of these projections are just based on a different set of facts," so they really are not trying to let that influence where they are right now in trying to pass this bill, so in other words, I don't think it's going to necessarily change the scope of the legislation, but the deficit is a really big deal.

Not only is it that you have a lot of House Republicans from the Freedom Caucus, in particular, who for years since they have taken the majority, have been saying, "We really need to reduce the deficit." This is actually the hill that they will die on, okay? If they are somehow able, if Johnson is somehow able, and Trump, to that matter, are able to persuade them to vote for this bill, you already have senators out there saying, "I'm not going to vote for this, if it's going to further raise the deficit. It's already not doing enough to cut the deficit to what I would like it to be."

It is going to be a continuing problem, if this bill gets to the Senate for Majority Leader John Thune, he can also only lose three Republicans to, potentially, pass this bill either back to the House, or to President Trump for his signature.

Brian Lehrer: I want to pull back to a forest for the trees question. Everybody's talking about these particular red lines, but there's so much reporting about the things they want to cut, from Medicaid, to public broadcasting. I think we risk forgetting what the cuts are for. Big tax cuts that go way disproportionately to the wealthiest Americans, both individuals and corporations. Can you remind us of the basics of the tax cuts that they want to extend?

Marianna Sotomayor: Yes, so the 2017 tax cuts, and Republicans have been arguing that, if they are not able to pass this tax bill, then everybody will see their taxes go up. The reason why is, because the 2017 tax law will expire at the end of the year, so really, the end of the year is the deadline to get this done, but what we are seeing are a lot of changes to social safety net programs.

Besides Medicaid, this could also impact Medicare. It could also-- Not could, it is going to impact nutritional programs, who can actually be able to receive them. A lot of that comes from what Republicans believe are necessary policies like needing work requirements, meeting certain thresholds for people to be able to access that. The reason why, is because they argue they want to be able to have a lot of that money, so that, yes, you can get better tax breaks depending on what level of income you have.

The federal government-- This has been a Republican ideological point for many years. They do not want to see the federal government be involved in state government decisions, for example. What we're seeing is proposals that the federal government would not be helping the states on, again, those social benefit programs, and that's going to really put a burden on the states who have relied on help from the federal government to, for example, be able to subsidize Medicaid to keep hospitals open.

It's not just going to affect whether people can receive the benefit. It could affect larger populations who may not be able to, again, be able to access a hospital in their area, because it closes. There's going to be ramifications like that.

Brian Lehrer: There was some debate about raising taxes on billionaires as a populist sop, if that's the right word. Even though there would be still big tax breaks for a lot of really, really rich people. Trump floated it. Is the House Freedom Caucus blocking that, or there's going to be no such thing from what I'm gathering from the most recent reporting?

Marianna Sotomayor: Yes, so interestingly, I would say that there are some members in the Freedom Caucus who do believe in that more populist message that Trump delivers, so they are some who have considered, "Well, maybe we should raise taxes on the highest earners, to be able to balance a lot of this out, and possibly, reduce the deficit." It's something that you don't hear as much from a majority of Republicans.

I mean, this is an issue that all of Republican leadership at one point literally laughed at, because they knew that they were not going to raise taxes on the highest earners. When Trump came out, and said that, that's something that maybe Republicans should consider, there was consideration. I even heard from some of those staunch Republicans who do not want to raise any taxes, say, "Hey, maybe we could do this. I'm actually okay. I'm on board." They were, of course, saying that privately, and as quickly as some things happen here in Washington, the idea went away. It just does not have enough votes among a majority of Republicans to actually incorporate into law, so it's not being considered and certainly.

Brian Lehrer: Certainly, preserves a big talking point for the Democrats. I said in the intro, before you go, Marianna, I was wondering if they slipped any special interest goodies or punishments into the bill in the middle of the night, while everyone except them, and you as of the crack of dawn were sleeping? Anything like that cross your awareness, or if not, what kinds of things like that might you be on the lookout for?

Marianna Sotomayor: Yes, it's something that we're still waiting for. We do expect a number of changes to this bill, from the technical language, to actual policy. We have not received that yet, and it could also come in phases as the day goes on. It's a lot of the discussion points that a lot of these members have been negotiating over the last several hours, of course, SALT is one of them. Medicaid work requirements, when those are supposed to kick in, is going to be part of it, is my understanding, as well as any further repeals from the Biden era Inflation Reduction Act.

A lot of conversation about, possibly, curtailing energy tax credits, and that's been a point of contention as well for many Republicans, who have manufacturers who have actually been benefiting from those tax credits, so a lot still to be figured out. Not too much time left, at least, if you're considering Johnson's own self-imposed timeline of passing this by Memorial Day.

Brian Lehrer: Marianna Sotomayor, who covers the House of Representatives for The Washington Post. Marianna, you get a Special Duty medal for working us into your day with all of this still breaking around you. Thank you very much for joining us.

Marianna Sotomayor: Happy to join you all anytime.

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