The Fight Over Entitlement Reform
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I'm Abby Hornacek. I'm Ben Domenech. I'm Dana Perino. And this is the Fox News Rundown.

Thursday, March 20th, 2025. I'm Chris Foster. There's debate among Republicans in Congress about overhauling safety net programs like Medicaid. These programs are broken and bureaucratic, and it doesn't serve those who depend on them, qualify for them. It doesn't serve future vulnerable people in this country because they're not sustainable. We're speaking with Texas House Republican and Budget Committee Chair Jody Arrington.

And Lisa Brady, a wait and see from the Fed on what a Trump transition and tariffs will mean for the economy and the effort to lower prices. Consumers think that deciding between cost of living and inflation is something that geeky economists do. They don't like the prices being high and they don't care what the label is. So they will be concerned about this, no question. And I'm David Marcus. I've got the final word on the Fox News Rundown. ♪

Top House Democrat Hakeem Jeffries warns Medicaid cuts are coming for lower-income Americans. It's unacceptable. It's unconscionable. It's un-American. And together we're going to do everything we have to do to stop these cuts from ever taking effect. Whatever happens with Medicaid and other programs a lot of Americans like, President Trump has made cost-cutting a big part of his domestic agenda through non-traditional means like the Department of Government Efficiency, DOGE,

that's facing opposition in the courts. The Democrats always talk about, oh, our Constitution's been violated. The one thing they never talk about is, where did these billions of dollars go? They never want to look, because when you see where the money went... The president with Fox is Laura Ingraham. He's also working with Republicans in Congress to cut spending more traditionally. The big work there is coming.

There are some cuts in the bill to fund the federal government until the end of this fiscal year, September 30th, ultimately supported by top Senate Democrat Chuck Schumer and passed a week ago to prevent a shutdown. Just think about an annual budget, which is the bureaucracy, both defense and non-defense.

And that was what Chuck Schumer decided to go along with. Texas Republican Jody Arrington chairs the House Budget Committee. That reduced spending year over year, and it redirected resources within the 25 percent of the budget that funds the bureaucracy to border and uproot.

other national security operations and rescinded some monies that were part of the expansion of the IRS back to the Treasury to reduce the deficit. That happens every year.

And in this case, the lion's share of the America First agenda and policies will be wrapped up in this reconciliation bill from locking in the lower tax cuts, from the 2017 Republican tax reform to lower regulatory barriers on energy, to dereg mechanisms like the RAINS Act,

And then, of course, reining in and bending the curve on runaway spending that's driving the debt. In addition, there's plus up for defense, for military readiness and plus up for border security to give the president the resources to detain the millions of illegals who've come to this country over the last four years and deport. And that's unthinkable.

all in that budget reconciliation that we passed out of the committee and then out of the House with a one vote margin and now rests there in the Senate for them to take it up. - Can you make a dent, that is, on cutting spending and reducing the deficit

While still raising defense budgets and not really cutting into what they call entitlement spending, Medicare, Medicaid, Social Security, or at least reforming it. You can you can chip away at the margins with stuff like Voice of America or, you know, etc. But in the end, you have to make really tough political decisions to get this done.

You're exactly right. So you can't avoid health care, welfare and entitlements. We have a number of them on the list of reforms for reconciliation. Obviously, the president

took off the list, Social Security and Medicare, although there are some efficiencies to administer those programs and root out waste and fraud in those programs as well that doesn't touch the benefit. But absolutely, that's what's driving the spending that is pushing us closer to a sovereign debt crisis.

And there's hundreds of billions a year in wasteful, fraudulent spending alone, not to mention unnecessary spending throughout the federal government and the $7 trillion annual budget.

You mentioned Social Security, you mentioned Medicare. You didn't mention Medicaid, which is what a lot of Democrats are trying to get their constituents fired up about that and things like the food stamp program, SNAP, they call it now. What's what's going to happen there? Do you see Medicaid and those services being cut or reformed? Well, I see them being reformed. I think right now every program is unsustainable given our deficits and debt.

And you can achieve the $2 trillion goal in reconciliation, $2 trillion in reduced spending, without touching the benefits of Medicaid and these other means-tested welfare programs. These programs are broken and bureaucratic, and it doesn't serve those who are in need.

those who depend on them, who qualify for them. It doesn't serve future vulnerable people in this country because they're not sustainable. And it darn sure doesn't serve the taxpayers who thought they were giving their money to help people in their time of need, not illegal immigrants who, by the way, get

get $9,000 per illegal immigrant for social services across the board. And $9,000 per illegal immigrant is more than we spend on U.S. citizens who are on Medicaid. In fact, it's more than we spend for our veterans on their military retirement benefits. Is it going to be what could it be enough?

to phase in, for example, changes to Social Security? Unfortunately for the budget, for budget writers, people are living longer. And is there a mechanism where you could possibly say however many years out, add a year, add a year, add a year for people to be eligible and increase that age? Yes, there are common sense and pretty straightforward ways to make the Social Security system and the trust funds

work and solvent and sustainable. But Medicare is more challenging, but it's doable. But when it comes to Medicaid and food stamps and some of these other programs where, for example, there's not even a work requirement in Medicaid for able-bodied adults to

That's the majority of people in the Obamacare expansion population of Medicaid. That's $120 billion in savings. That's the right thing to do. That will prevent people from being trapped in dependence on the government and generations of people in poverty. So these are good policies. They're right for all involved, every stakeholder, including the taxpayer. But the big ones are going to have to be done

on a bipartisan basis. Otherwise, they're used as a political cudgel against one another, and they end up not going anywhere. Are there any absolute red line priorities that the White House has signaled to you? We absolutely have to have this in a final bill or we won't sign off. Well, I think most Republicans are...

mostly focused on locking in the tax cuts and jobs act because those tax cuts expire at the end of this year it would be a 22 tax hike on the average american but here's the thing um they're not free that is there is a deficit impact to cutting taxes and most republican uh circles don't

emphasize that enough, don't recognize and consider that. So what we have to do is cut the taxes and

and we have to cut regulations with it and other good economic policies. But the worst thing we could do to this economy is not offset the impact of the deficits and let the deficit grow, crowd out more private capital so that we can experience growth and risk a sovereign debt crisis in undermining the dollars of reserve currency. That is the biggest threat, and that's the biggest drag on our growth. So we can do both things.

At the same time, that's what our budget resolution framework does. It's a balanced budget resolution framework. It forces us to cut spending, eat our vegetables as we're cutting taxes and doing all the pro-growth stuff. Speaking of taxes, I mean, is there a way on the other end to increase revenue at all, like you said, instead of just trying to cut everything with pay-fors? Are there any plans to raise more money?

Well, I'd say a couple of things. There are some pay for revenue streams on the immigration side, but it's not significant. I think it's good policy. And there's some fines that go with not abiding by immigration laws, but that's not significant. I mean, we're talking about

a $36 trillion debt and $2 trillion annual deficit. So I think other streams of revenue, I think, are not predictable when you talk about tariffs.

But, for example, in the tax code, there's a lot of savings from tax breaks for special interest groups and loopholes. The biggest one on the list of targets is the green energy or climate-related tax subsidies. I mean, from electric vehicles to renewable energy, all these tax credits that are really –

cash tax programs to some of these renewable and green energy corporations. Those things were distortive of the energy markets. They made prices go up for consumers. They threatened our bread and butter baseload, 80% of which is fossil fuels, oil and gas. So that represents about $700 billion in

in savings. And then, of course, the much debated state and local tax deduction, the SALT tax, that was about $800 billion in pay for. That's being discussed now on changing it the other way. That is actually raising the cap for people in New York and California. First of all, if this was on the other foot, if you guys were in the minority, would you

Would you be mad at your leader for for doing what Schumer did? And what would you say to Democrats in and out of Congress that are upset with him? Well, I don't think he had a choice politically. I just think it would have ended up being the Schumer shutdown and it would be counterproductive. So I think he did the right thing politically. But, you know, at this point in time,

There's a lot of frustration in the Democrat Party, rightfully so, because they're wandering in the wilderness after that butt kicking in November election. And Trump is at warp speed advancing the America First agenda that he was hired to do. So they just...

They're desperate for some momentum. They're desperate for a win. But we keep jamming them with, I think, good policies that reverse course on the last four years and put our country on a path to a safer, stronger, more prosperous future. Jody Arrington's the chairman of the House Budget Committee, proudly representing Texas 19 there in West Texas. You've got Lubbock. You've got Abilene. Congressman Arrington, good to talk to you. Thanks. Thanks so much, Chris. God bless.

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Galaxy S25 Ultra, the AI companion that does the heavy lifting so you can do you. Get yours at Samsung.com. Compatible with select apps requires Google Gemini account results may vary based on input check responses for accuracy. This week on the Brett Baer podcast, my all-star panel weighs in on the top stories at home and abroad. Fox News contributor Katie Pavlich, Fox News senior congressional correspondent Chad Pergram, and hosted the Richard Fowler show, Richard Fowler. Listen and follow now at foxnewspodcast.com. This is David Marcus with your Fox News commentary.

Coming up. The Federal Reserve is holding off on any change in its benchmark interest rate, opting to wait for greater clarity on what the economy is doing, as President Trump makes many changes, including with tariffs. Inflation has started to move up now, we think, partly in response to tariffs. And there may be...

delay in further progress over the course of this year. But Fed Chair Jerome Powell also describes the overall picture as solid, even as surveys of households and businesses show increased concern and uncertainty. There have been plenty of times where people are saying very downbeat things about the economy and then going out and buying a new car.

But we don't know that that will be the case here. We will be watching very carefully for signs of weakness in the real data. Of course we will. The Fed now expects the economy to grow more slowly this year and next year compared to its last quarterly projection three months ago. Kevin Hassett, director of the White House National Economic Council, says the administration is taking multiple steps that will help to reduce inflation, including deregulation and spending cuts.

And he offers reassurance about a reciprocal tariff policy set to kick in April 2nd. I think that one of the things you see from markets is that they're expecting that there are going to be these really large tariffs on every single country. But there are a whole bunch of countries that treat us fairly, that we have a trade surplus with, and that don't charge tariffs on our goods. And so if you're going to be reciprocal, that's what American people want. And if you're reciprocal, then I think markets need to change their expectations because it's not everybody.

Hassett also tells Fox Business that he and the Commerce and Treasury secretaries have been talking with other countries about mutually lowering tariffs. In the meantime, the Fed is adjusting its expectations. They projected modestly higher inflation, 2.8% instead of 2.5% for this year.

I think that's on the mark, given what we've seen so far. Doug Holtz-Akin is former director of the Congressional Budget Office and president of the American Action Forum. They also projected slower growth, marked it down from 2.1 percent to 1.7. Again, I think the decline in consumer sentiment, the uncertainty businesses are facing is going to hurt the growth outlook. Neither...

uh, adds up to a recession nor a restart of the worst of the inflation, but they are cautionary signs. Yeah. What about fear of recession? It seems to, you know, talk about it. Speculation about it seems to increase any time, you know, the economy is not going gangbusters, um, fear either in the markets or for the public. Is that something that, you know,

The fear itself, is it enough to impact the economy, even if there are no indications that an actual recession is coming?

Yes. If households collectively become afraid that the outlook's going south, they can stop spending because they want to have some savings for the tough times. And if they all decide to stop spending at the same time, businesses have no business. They lay people off. You get a recession. So it can be a self-fulfilling fear. And that's a concern always. The Trump administration has talked about a transition period.

Does the American consumer have enough patience for that right now with inflation still elevated, though the Fed chair is is pointing out it's really, you know, cost of living as opposed to inflation that impacts consumers the most?

uh, consumers, uh, think that, uh, deciding between cost of living and inflation is something that geeky economists do. They don't like the prices being high and they don't care what the label is. So they will be concerned about this. No question. Uh,

being told that they have to go through it really depends on what's on the other side. And so I think the administration would be well served to articulate to the American people, this is why we're going through this period of transition. What will be on the other side will be more jobs for everyone, higher wages. Tell a story about why it's worth it. When it comes to inflation and it's still being elevated, the Fed chair did talk a little bit about

tariffs, but he didn't go too far down that road. President Trump is still sounding confident that his tariff policy is ultimately going to bring companies and jobs back to the U.S. How long could it take for all of this to shake out? How long could it take before we really can gauge the potential impact of tariffs one way or the other?

Very few tariffs have been in place for very long. The steel and aluminum tariffs, for example, actually went into effect on March 12th. So what we've seen so far are the kinds of things that happen in anticipation of tariffs. If the president goes through with his April 2nd promises on tariffs on Canada and Mexico, tariffs on pharmaceuticals, autos and chips, and then reciprocal tariffs on every other country,

That's a substantial tax increase that happens right now in the middle of the year. And you would expect to see the impacts from that essentially immediately. So I'm concerned about the scale of that tax increase in an economy that is now growing slower than its trend. So impacts are quick.

The payoff could take a long time. I think it's important to recognize that for some things like a manufacturing plant for pharmaceuticals, it can be 15 years from idea to finishing the construction. So this is not something that turns quickly in my view.

The president, of course, at the same time is leaning on Congress to extend his 2017 tax cuts, arguing that that will help consumers and that if Congress doesn't do that, it would amount to a tax increase. When it comes to the reciprocal tariffs, though.

You know, what if other countries decide to lower their tariffs on U.S. imports in order to, you know, get the benefit of that? Could that end up working to everyone's advantage? Is that kind of a best case scenario? Certainly, it would be great if we had lower tariffs around the world and a greater reliance on trade. But that's not been done.

the president or the administration's stance. On other fronts, they have been uniformly interested in levying tariffs. So I'm not sure exactly how much take up they'll get in getting into a lower tariffs bidding war. I think a bigger concern will be the retaliation we've already seen from Canada and Mexico, further retaliation from Europe on the autos and other, especially pharmaceuticals, and

a global trade war. And that's a bad news scenario for everybody involved. Are there undercurrents in the economy that always get missed with all the focus on the headlines about inflation and tariffs? Are there other things that should get more attention?

Well, I think one of the really pressing issues in the economy right now is the affordable housing crisis. This is a real shortage of inventory. Housing has always been a place where low-skilled workers could find some jobs, where tradesmen could find some employment. It's always been part of the business cycle. So a boom always was part and parcel with a housing construction boom. And we

We really have had a housing market that's been dead in the water for a while now. And that, I think, is something that deserves more attention. Yeah. And the mortgage rates haven't really moved much as the interest rates haven't really moved much. Right. Yeah. Yeah.

i mean the federal reserve you know held interest rates their interest rates constant um but they don't control the 10-year treasury rate and as a result they don't control mortgage rates and when they cut rates by 100 basis points in the fall

The long rates went up by 100 basis points. So what matters for the longer term is, you know, what are the administration's plans for getting the enormous amount of federal debt under control so that we're not borrowing so much and driving up rates? That would free up capital for housing, for business investment. That would be a boon to the long-term growth prospects. And that's a wait-and-see part of the market right now.

Interesting, too, that the Fed's decision to leave interest rates alone for the second meeting in a row wasn't unanimous. I mean, and there was also some disagreement about how many rate cuts they may make as this year goes on. I mean, how significant is that?

I think all of the dissents were more hawkish than one might have expected. Mr. Waller, who literally dissented, dissented over the size of the Fed portfolio. They slowed down somewhat the runoff of the portfolio. He would have wanted to keep it at 25, which is a tighter monetary policy. So that's a hawkish lean.

There are four members in their projection said there are going to be no rate cuts this year. That's up from one last meeting. And so on the committee itself, there's a concern over the inflation outlook and a more hawkish stance. What about their lowering of the projection for economic growth? I mean, how concerned should the country be about that?

They should take note of it. That's in a couple of months, a serious downgrade of the growth prospects of the economy. And we had an economy that was growing at 3, 3.1, 2.6 percent at the end of last year, now down to 1.7 in these projections. That's going from above trend to below trend. And that's not a good development. And yet the Fed chair still describes the overall picture as bad.

And he said that, you know, from a policy standpoint, the Fed is is in the right place to be able to react to whatever happens. So a bit of reassurance at the same time. And, you know, we were created 150,000 jobs that the most recent unemployment report, the unemployment rates, 4.1 percent. You really can't look at that and say we have a problem. Inflation might not be back to 2 percent, but it's.

two and a half to three depending on which measure you like and it's been there for essentially a year so inflation is much lower and pretty stable in isolation that would be a pretty good picture it's the the surrounding concern over the the policies on uh tariffs the policies on on debt that that I think are causing the market to not be confident in the outlook

Just uncertainty. In a word, uncertainty about exactly where certain things are heading. One other question. I'm wondering where the recent drop in oil prices fits into all of these things when you look at the overall economy. How important is that? I mean, it certainly has been helping at the gas pump.

Because the US is now the world's largest producer of oil, we both own and use the gas station. And it's good news when we're using the gas station to buy gas, it's bad news when we're selling it.

uh, oil prices are now mixed blessing, uh, with prices below $60 a barrel, we'll get less investment in production capacity, less exploration, uh, but it'll be great at the pump. And so, uh, that's not one when you can draw a verdict on very easily. Yeah. Is, is one particular thing driving the decrease or is it several things? It's the global slowdown. Uh, you know, the U S was, was the place where growth was fairly rapid. It's now not as rapid, uh,

In other places, we've got monetary authorities cutting rates because they're worried about the growth outlook. And when the world grows more slowly, oil prices usually drop off. Anything you any piece of advice you want to offer to Americans who may be concerned about the uncertainty surrounding the economy and are still struggling with elevated prices? What can they do to prepare and to help themselves?

Well, the usual rules apply. I mean, having a job and keeping it are important. People do that anyway. Trying to have some savings for a rainy day, people try to do that anyway. I guess the biggest thing in this environment is divide all your fears by 10 until you actually see some data that says there's something real there because there's a lot of negative chatter out there.

Former CBO Director Doug Holtz-Akin, President of American Action Forum, thank you very much for your time. Thank you.

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Subscribe to this podcast at Fox News Podcasts dot com. It's time for your Fox News commentary. David Marcus, what's on your mind? White House Press Secretary Caroline Leavitt announced at the very beginning of President Donald Trump's second term that new and independent media would be invited to play a big role in covering the administration. The collective eye roll from traditional media was as immediate as it was condescending.

We all remember Trump's first term when his press conferences often devolved into a full-contact sport, with former CNN correspondent Jim Acosta wrestling a female White House aide for the microphone, for example, amid nothing but constant "gotcha" questions. The snarky back-and-forth from the media in those days created entertainment, but a lot more heat than light. The White House press in Trump's first term sought always to expose Trump for this or that, but almost never to truly understand the administration's policies.

There were exceptions, of course, such as your favorite cable news network whose White House correspondents play it down the middle no matter who's in office. But in general, Trump faced a daily inquisition while his successor, President Biden, more or less got a free pass throughout his abysmal four years as president.

Today, the addition of independent outlets has transformed Trump's press availabilities from a tackling shouting match into a substantive, almost daily discussion of the administration's actions and priorities. With the exception of the recalcitrant Associated Press, which has weirdly decided to die on the hill of defending the name Gulf of Mexico, all the old Trump haters from the New York Times to NBC News are still in the room. They just don't completely dominate it anymore. If

If you listen to a news conference with Trump now as opposed to five years ago, you do not come away with the impression that he's some sort of pariah who everyone hates and thinks is a liar. We have a full spectrum of media in there, and it has brought comedy to the process. But there are still tough questions, too.

Does the new mostly conservative media in the White House toss up some softballs? Sure. Are the online thank yous to Levitt for opening up the room a bit saccharine? Certainly. But compared to what? A mainstream media that just nodded along as former White House spokesperson Corrine Jean-Pierre told us Biden was fit as a fiddle and she was a very important historical figure? Spare me.

The fact of the matter is that outlets like The Daily Caller, even Steve Bannon's War Room, are no more biased to the right than NPR, a longtime staple of the Oval Office, is biased to the left. Nor are they abnormal. Even super left-wing California Governor Gavin Newsom just had Bannon on his new podcast.

For four years, we had a White House press corps that, with the exception of Fox News and Real Clear Politics, ran cover for Biden and KJP. So if we all admit that the press did a terrible disservice to the American people with its one-sided and farcical coverage of Biden, then how can we complain that both sides of the American political divide are now represented in the room?

70% of Americans do not trust journalism today, and for extremely good reasons like those outlined above. I'm a journalist, and even I don't trust journalism. But this fresh approach from the White House could be a step in restoring some level of trust. Americans know when they're only getting one side of the story. We have a basic sense of fairness that rankles when we see the powerful put a thumb on the scale. And by inviting all perspectives in the room, the White House is allowing us to weigh arguments freely and fairly.

To turn an old saying upside down, if it's broke, fix it. And the news media's coverage of the White House for years now has been badly broken. Maybe, just maybe, these new and formerly banished voices in the Oval Office are just what we need to fix it. I'm David Marcus, Fox News digital columnist and author of Charade, The COVID Lies That Crushed a Nation.

You've been listening to the Fox News Rundown. And now, stay up to date by subscribing to this podcast at foxnewspodcasts.com. Listen ad-free on Fox News Podcasts Plus on Apple Podcasts. And Prime members can listen to the show ad-free on Amazon Music. And for up-to-the-minute news, go to foxnews.com.

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