With Tax Bill, Trump Ushers in New Era of Executive Power

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1:18Thanks to genius. from global payments. Scheduling? Personalized. Checkouts? Instant. Absolutely genius. Big League reliability for any business. That's genius. Bloomberg Audio Studios. Podcasts. Radio. News. On this vote, the yeas are 218, the nays are 214. The motion is adopted. The U.S.'s massive tax and spending package officially passed the House on Thursday afternoon. And now it's headed to President Trump's desk. The legislation extends Trump's 2017 tax cuts, making them permanent. But it does a lot more than that. It also slashes Medicaid. Cost cuts, which are mainly in Medicaid and SNAP.

2:07Rollback tax incentives for the clean energy industry. The one big, beautiful bill just shows the vice grip that he's maintained on the Republican Party for the better part of the last decade. Mario Parker oversees Bloomberg's U.S. government coverage. And he says the scope of the bill, the ways the administration justified its cost, and the process it took through Congress all speak to the way Trump has been testing the limits of presidential power. A hallmark of Trump's second term has been just this power grab, this expansion of executive branch powers, whether it's seizing the power of the purse from Congress, sprawling executive orders, using emergency powers to justify the tariffs that he's placed around the country's trade flows.

2:56— Amid the firehose of news these past few weeks, there were even more examples of Trump expanding that executive branch control, from his strike of Iran's nuclear sites without congressional approval to a Supreme Court ruling that could unleash more of Trump's executive orders. I'm Sarah Holder, and this is The Big Take from Bloomberg News. Today on the show, President Trump's recent legislative, military and Supreme Court wins and how they're reshaping the scope of executive power in the United States.

3:34Mario, you and I are speaking at 11 a.m. on Thursday. Minority Leader Hakeem Jeffries has been speaking for more than six hours already as Congress prepares to pass President Trump's, quote, big, beautiful bill. We're dealing with an all-out assault on health care, on Medicaid, on the Affordable Care Act, on the Children's Health Insurance Program. It's this sprawling piece of legislation. But can you tell us, Mario, at a high level, what are the most significant top lines from this legislation? The most significant one and the one that we'll be hearing about, given where we are in the calendar right now as we look ahead to the midterm elections, will be the dramatic consequential slash to the social safety net in the United States.

4:20That's the rollback of social safety net that we haven't seen in decades, at least. The proposed bill includes deep cuts to Medicaid and SNAP, programs that subsidize health care and food for tens of millions of Americans, including many in the working class base that voted Trump into office. The Congressional Budget Office estimated that the cuts could lead to nearly 12 million more Americans without insurance by 2034. Mario says Republicans will be forced to defend those changes on the campaign trail. You've had Republican leaderships make deals on things like SALT, for example, trying to right-size just how much funding to cut, How tight to make the restrictions on Medicaid, how to loosen them, deals like the rural hospital relief fund that Susan Collins was able to back as well.

5:14That being said, I mean, this bill is by turns a microcosm of politics with Trump, but also a paradox for Republicans. The feature of Trump's political movement has been this attraction of former Democrat voting, blue collar, lower class workers who Trump appealed to over the last decade, but who are increasingly reliant on programs like Medicaid, Medicare, SNAP as well. Right. So the image of the traditional Republican from about 20 years ago as high earning, Trump has turned that on its head in some ways with his political movement. And so we'll see what political consequence, if at all, will be paid for this calculation that they just made.

6:02Mario, I don't want to get too in the weeds here about the budget process, but there has been a lot of talk about reconciliation, which is what Republicans used to push this bill through. What is the reconciliation process and what is it traditionally used for? Well, the reconciliation process, which isn't germane just to the Republicans to pass some of their key legislative issues. Joe Biden did it with his centerpiece legislative agenda and Democrats as well. But it's ostensibly supposed to be related to budgetary matters. Now, what we've seen with this bill play out, what we've seen in other administrations as well, is this requires someone called the parliamentarian to weigh in and see whether or not some of the measures in the bill adhere to the strictures of this budgetary process, right?

6:54So some of it takes creative writing on the part of the lawmakers. And then sometimes you just see what happened in several instances with this bill. Some measures that are just very, very political on their face end up being taken out or stricken by the parliamentarian. The CBO calculated that this bill will add over$3 trillion to the deficit. Republicans argue that the CBO doesn't take into account the economic growth that will be spurred by many of the measures in this bill. Whether you disagree with that or not, that's been the Republican argument. Mario says another thing that was unusual about this budget fight was the way Republicans cast doubt on nonpartisan individuals and institutions, like the Senate parliamentarian, who's meant to advise Congress on rules and procedures, and the Congressional Budget Office.

7:49We saw Republicans outright attack the Congressional Budget Office for forecasting that this would add to the deficit. The CBO, the parliamentarian are typically off limits. Typically, both parties have essentially taken those type of losses, if you will, on the chin and thought and considered that those individuals, those bodies are doing their job and being objective. But that's part and parcel to this political moment that we're living in right now, where it's been this erosion of faith in Democratic or big Democratic norms and institutions that hadn't been questioned before. I'm wondering where Trump was in the final days as Congress was debating this bill.

8:40How influential has he actually been in getting this almost through the finish line? I think highly influential. I think Trump's impact in convincing a strident budget hawk to eschew some of those concerns, if you will, and support passage of the bill. Now, that being said, you asked where Trump was. Trump was at the White House. He was working the phones from what we understand as well. Again, various folks were visiting the White House as well. But then we also saw the familiar cudgel with which he's wielded over the last 10 years or so, which is his social media account. And we know that when you as a politician, as a Republican, when you're in the crosshairs of a truth social post or Twitter post, that it's an uncomfortable place to be because essentially Trump, his allies, then flood and signal boost whatever message it is that he's directed your way.

9:41But then there's also the threat, which is the underpinning all of this, the threat of a primary. Even if they survive the primary, it will be costly, right? And it will be damaging. And so you saw a couple of weeks ago, Thomas Massey from Kentucky, who isn't supporting the bill. You saw Trump and his allies form a super PAC in order to find a primary candidate to oppose Massey. You saw this past weekend Tom Tillis from North Carolina, a longtime senator, who got crosswise with Trump over his stance on the bill. And lo and behold, by the end of the weekend, after Trump had threatened to find someone else to replace him or primary Tillis, Tillis said that he will be retiring from the Senate.

10:33While Congress was considering this legislation, Trump made a decision that would normally require congressional approval without getting it. That decision and a recent Supreme Court ruling on nationwide injunctions together raise more questions about the limits of presidential power. All that's after the break.

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13:57The so-called one big beautiful bill moved through Congress quickly. While lawmakers were still in the throes of debating its contents, Trump made another major move. striking nuclear sites in Iran without seeking congressional approval. Some members of Congress from both sides of the aisle were upset about that, but the defense from the administration was that they did inform some Republican lawmakers. So I asked Mario Parker what he made of the unilateral strike and Trump's defense. I mean, it shows that it goes back to our earlier point in the conversation where you've seen Trump push some of the, not just constitutional limits, but just norms as well, or at least do the bare minimum.

14:44So there was no gang of what we will call in Washington, D.C., gang of eight meeting to inform them, the top lawmakers from either side of the party to inform them of this strike in the Middle East. The administration said that, I think Pete Hexeth even mentioned in his press conference the day after that they followed the strictures of the law. Right. So they did essentially the bare minimum that they had to do. Now, that being said, about a week after that, there was in this fast moving news cycle, there was the early preliminary intelligence report that ended up leaking out that countered the public assessment of the attack that the administration had been putting out.

15:33And you saw that the response from that was for the administration to look at its communications with Congress as a potential reason for that leak. And this still has to play out more, but I don't think this will help improve the lines of preemptive communication. I mean, do you see this as a fundamental shift in our understanding of presidential power when it comes to military action? I'm not sure if it's a fundamental shift. We've seen an erosion of Congress's involvement in such measures over the last, call it, 20 years or so. To be fair, this didn't start with the Trump administration. I think what was striking was the fact that it was Iran, the fact that it was the Middle East, anytime, you know, nuclear is involved as well.

16:25But look, I mean, again, just to be fair to the Trump administration, they would say that they pulled these strikes off without having to put American boots on the ground, without American casualties. And then shortly thereafter, there was a ceasefire agreed upon between Israel and Iran after the 12-day war. So from the administration's point of view, They feel like they were validated by the calculation. You have some Republicans who are saying that it's unconstitutional. In some ways, those Republicans are thinking forward to what happens when the next Democratic president does something like that as well.

17:06Obviously, Democrats are going to oppose such unilateral strikes from the opposition party. Well, Mario, we've been talking about the ways President Trump and the administration are testing executive powers. So we have to talk about the Supreme Court. The Supreme Court last week moved to strike down the power of the lower courts to issue nationwide injunctions. We've seen nationwide injunctions go into effect to block all manner of Trump administration priorities in both his first term and already in his second. Can you just remind us in this busy news moment, as you've alluded to, what was that ruling?

17:43and how does it change the way executive orders or legislation from the president can be challenged moving forward? Well, one of the frustrations of both Trump terms, Trump 1 and Trump 2, they issue some type of order or they take some type of action. That action is sued or countered in a court, right, say in some state. That court will then issue an injunction that prevents that order from being carried out nationwide. And that has been a point of frustration for the Trump administration as it does so many things, whether it's birthright citizenship, deportations, other measures as well. And so now this ruling essentially says that that those injunctions are limited to the parties involved in that suit.

18:34So if that took place in, say, California or or some other state, it's limited there. as opposed to having a blanket cover across the entire United States. How could the Supreme Court ruling impact what Trump does next? Could it push Trump to take more executive actions if he knows judges are limited in their ability to stop them? Well, it's unclear exactly which other issues he may seize upon. For Trump, they're fighting wars in various fronts across the courts, whether it's with the higher education system and some of the things that we see playing out there, whether on immigration as well, again, whether on the implementation of tariffs.

19:20This has essentially emboldened him for whatever he sees coming next. Zooming out, how do all of these developments that we've talked about so far, The tax bill, Iran's strike, and the Supreme Court ruling relate back to this new testing of the limits of presidential power under Trump. There's no doubt about it that we haven't seen in a long time, at least, the stretching of the executive powers that we're seeing take place right now. I mean, just so sprawling. I don't think that it's hyperbole to say that in Trump's first five months back in office, there's no part of American life that hasn't been impacted by the presidency and some of the moves that he's taken.

20:06Whether that's the deportations, whether that's leapfrogging the governor of California and sending in the National Guard, whether that's the deportations to third countries, countries that aren't persons of migrants' origin. Some of the top law firms in the country are seeding, acquiescing, and finding settlements with the administration. Some of the universities, some concessions made on the part of higher education. This is before we get to the so-called one big, beautiful bill that has everything, that touches everything from Medicaid, SNAP, green energy credits as well, to so many different things.

20:51I mean, the doge cuts, right, the remaking of the federal government in and of itself and what impact that has on the service that Americans get. The priorities outlined as well, the USAID cuts, what that means for America's brand abroad and just the traditional place that we've had in giving assistance to other countries or diplomacy or spreading democracy to other countries as well. So there's what we've seen with this administration in just a few months is just this expansion of powers and just having tentacles in so many different areas.

21:49this episode, make sure to follow and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.

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