David Remnick: I spoke with economist Janet Yellen about the Republican budget bill, the impact of escalating deficits on our economy, and the unending trade deal chaos that's coming from the White House. Now, some of these moves have been deeply unpopular, not least with the traditional deficit hawks in Trump's own party. Elon Musk is making noise about targeting the bill's proponents in the primaries. In The New Yorker, our Washington correspondent Susan Glasser's column said this, "Rarely have so many members of Congress voted for a measure they so actively disliked, but vote for it they did. Now, will any of this have real political consequences for Donald Trump and the Republican Party? Will it matter in the midterms? Susan, according to a recent poll, more than 40% of Donald Trump's voters, 40% of them, rely on Medicaid, and 65% say that Congress shouldn't cut its funding naturally. I don't quite understand this. Why would the Trump administration, knowing this political equation, make this such a big part of the bill and see so much cutting in Medicaid, and ignore these people's needs?

Susan Glasser: First of all, it speaks very clearly to the ability of Trump to force many Republican members to vote against their own perceived political self-interest and that of their constituents. In next year's political midterm elections, you may see some Republican members in competitive districts, of which there are fewer and fewer in America, who actually lose their seats as a result of this vote.

Even more big picture, I think it speaks to a partisan moment in which the label of your party being affixed to a bill is so significant for these elected officials that it essentially overwhelms all other considerations. Let's be clear that Donald Trump explicitly promised not to cut Medicaid. As recently as the day before the bill's final passage, he was reportedly telling members of Congress in an Oval Office meeting that there were no Medicaid cuts in it.

David Remnick: I think, Susan, there's also the fact, correct me if I'm wrong, that voters won't feel the real impacts of these Medicaid cuts until after the midterms.

Susan Glasser: Right. It is a very political bill. What they have done is front-loaded the benefits to people of tax cuts, for example, and tried to push off and delay the cuts that would affect people. It's something really unusual. It seems to defy certain conventions, even of our dysfunctional politics.

David Remnick: Totally. Look, I just talked to Janet Yellen. She, like you, said, "Look, this is a bill, most of all, directed toward cutting Taxes for wealthy people." How does the politics add up for Donald Trump?

Susan Glasser: I think it speaks to a theory of the case in which even economic self-interest is subordinated to partisan and tribal loyalty. They're counting on these voters not to abandon them, even if they screw them. That's number one. Number two, the primacy of the culture war. This is a Republican Party that now believes, I guess, that they can convince people of anything. Maybe that's true, by the way. I do think there's a strand in the Republican Party that we're having trouble fully processing, perhaps. It's the Joni Ernst, Dan Patrick, we're all going to die, so what the hell strand of the Republican Party.

Joni Ernst: They are not eligible, so they will be coming off.

Speaker 4: People will die.

[crosstalk]

Joni Ernst: We all are going to die.

[crosstalk]

David Remnick: Explain that.

Susan Glasser: That maybe suffering is required in order to carry out the Republican revolution. I think we're still struggling with this, but I think it tells us about a new political reality in which the Trump White House has concluded that its voters, even if they are forced to bear some of the pain of this bill, will not abandon them because of other priorities such as partisan loyalty, tribal loyalty, and the culture war, the idea that Trump is on their side, even if he's not on their side.

David Remnick: How did the sum total of the DOGE experience and now the big beautiful bill-- Is this going to be regarded as a political accomplishment for his constituencies? Is it going to raise his numbers and help the Republicans in an election next year?

Susan Glasser: There certainly are indicators. Of course, history suggests Democrats would be likely to fare better in the midterm elections almost regardless of this particular legislation. I think there may be individual components of it that you'll hear the Trump White House tout, for example, no tax on tips, things like that, but the overall package suggests something that is not what Americans broadly were clamoring for, and it's not even what Republicans were clamoring for.

I am struck by this fact that there was real pushback from many, many corners of the Republican coalition. Conservative groups, deficit-cutting groups, they were all pushing and lobbying, and pretty aggressively, many industries that have been Trump-friendly businesses were also against this. The healthcare industry, enormous lobbying cloud in Washington against the measure, and it still passed. I think that's speaking to a new politics where the Trump White House is so confident of its support from Republicans that they're overriding objections that in the past would have crippled or killed outright a bill like this.

David Remnick: If you're JD Vance and cast a deciding vote in the Senate and you want to be president, was this a good day or a bad day for you?

Susan Glasser: I think for JD Vance, who comes from a part of Ohio that's going to be very affected by things like the Medicaid cuts, by things like rural healthcare, that this was, at a minimum, a political risk. He had no choice but to take it, of course, because that's the job of a vice president in Trump's world, is to salute and say, yes, sir.

David Remnick: Vance himself said that the point of the bill is to fund ICE. Is that popular enough as a trade-off for healthcare?

Susan Glasser: Pretty amazing argument. I believe Vance also said the Medicaid cuts were "immaterial" because ICE was so much more important in his particular statement. That's why we're seeing every day, things like the militarized spectacle of massed, heavily armed agents in the streets of Democratic run cities. Those are images that may stir horror among Democratic viewers, but they actually are designed to invoke the passion and righteous fury of Republican voters.

David Remnick: You would figure that he'd have one great supporter in this, and that would be the wealthiest man in the world, but Elon Musk [chuckles] has said this bill is a disaster. He now seems to be behaving against his own self-interest. Every time he opens his mouth lately, Tesla stock plunges, and he's got a lot of business in Washington.

Susan Glasser: One of the aspects of this Trump-Musk breakup that I think was so notable and somewhat undercovered was Trump saying the quiet part out loud here, openly threatening Musk with the revocation of his Pentagon contracts, of his billions of dollars of dollars in federal spending that benefit Musk many businesses, not just the Tesla with the electric car subsidies, but most importantly, the space contracts from the Pentagon, the contracts for his boring company. Maybe it's implicit in a lot of how Washington works, but rarely is it explicitly said because in the past, one would say that's illegal, that's improper.

Substantively, the fight between Musk and Trump, the falling out between Musk and Trump is essentially the shattering of the idea that the Republican Party is the party of budget cutting and fiscal responsibility. That means that all those cuts, the elimination of basically America's entire foreign aid program, for example, simply about cruelty because there's no fiscal rationale for it, and this bill underscores that. I think that's really important for people to understand. They've just admitted essentially to the public there is no rational basis for these cuts, there is no policy goal undergirding it. The goal is cutting for its own sake. We're in a frenzy of self-destructiveness.

David Remnick: The events have come at us so fast that I wonder, after the passage of this bill, and the rollout of tariffs, and so much else, what else Donald Trump has in store. He's only really exhausted one eighth of this second term, right?

[chuckles]

Susan Glasser: Thank you for reminding us of that.

David Remnick: You're welcome. What do you think is next? What's around the corner?

Susan Glasser: I think we have to take Trump seriously as far as what are some of the things that he has said for a long time that he wants to do that he's been stymied from doing. One of the things, because it's been a short amount of time that we haven't fully seen yet, is what is he planning to do with the personal power of the Justice Department and the FBI because he went to great lengths essentially to politicize those entities to make sure that they were in the hands of personal loyalists. He has threatened many, many of his political opponents with investigations, with prosecution.

I'm very, very nervous and curious to understand whether he will follow through on those threats now that he has people who appear to be much more willing to carry out those threats. Second of all, if he manages to hold on to both chambers of Congress, what could they do to make permanent this kind of Trumpian revolution in terms of the power of the presidency?

I think if you look at the template that people like Viktor Orban have used in Hungary, that's the risk factor that we face right now, is that a compliant Republican Congress, essentially a Supreme Court that increasingly appears to be not just a conservative majority on paper, but actually a Trump majority in reality, that if Trump, the Supreme Court, and that Republican Congress can change our political system in a more long lasting way. That's my fear.

David Remnick: Since we started out talking about economics, I'd like to end with that, too. One of the things that we're now hearing is that Trump very much would like to get rid of Jerome Powell as the head of the Fed. Anybody panicking about that in Washington?

Susan Glasser: I think we are the boiled frog, David. We are almost panic immune at this point in the same way that Donald Trump has, I think, inoculated much of America against facts in our political debate. Even inside of Washington, there's so many individual crises at any one time. It's very, very hard in Trump 2.0 to focus on any one of them. The campaign against the Fed chair and the independence of the Fed is something that Donald Trump has carried over from his first term. He invade against his own appointee. Let's underscore that he was his own appointee.

Janet Yellen actually might have been not a terrible fit on paper, but of course, he didn't like the optic,s and Donald Trump is all about the optics. He didn't want to keep Janet Yellen because she was Barack Obama's chair of the Fed. He found in Powell someone who seemed like he would carry on, more or less, those policies. He quickly soured on Powell. As with many of his first-term appointees, Powell had been adamant that he would fight Donald Trump to the last penny of his very considerable fortune, Powell is a wealthy man, in order to preserve the independence of the Federal Reserve. Many experts consider the idea of an independent central bank to be core to-- [crosstalk]

David Remnick: How does he go about fighting that?

Susan Glasser: It would end up being a lawsuit. There are real questions with this Supreme Court. One of the things I'm worried about is that in the next term of the Supreme Court, we could see rulings that erode or eliminate altogether the independence of some of these independent federal agencies that have been around since the New Deal. Then we're talking about a different America, I think.

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David Remnick: Susan Glasser writes our column Letter from Trump's Washington, and she's co-author with Peter Baker of The Divider, a best-selling book about Donald Trump's first term.

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[00:14:20] [END OF AUDIO]

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