President Trump's 2026 Budget, Gloomy Economic Outlook, Secretary of State's New Role

0:01President Trump proposes major cuts to federal spending. Part of the White House's budget plan for next year. But any spending will have to be approved by Congress. I'm Aisha Roscoe. And I'm Scott Simon, and this is Up First from NPR News. The budget plan was announced after the economy shrank during the first three months of this year. But job figures announced this week were better than expected. What do these mixed signals tell us about the state of the economy? We'll have the latest. And Secretary of State Marco Rubio has added a new role to his portfolio. He's now the National Security Advisor after Mike Waltz was moved aside.

0:42How could one official holding two top posts affect foreign policy? Please stay with us. We've got the news you need to start your weekend.

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2:21Rinse. It's time to be great. President Trump has issued his first budget proposal since returning to the White House. He wants to slash spending for many federal agencies, but increase spending for defense and border security. The president's spending plans are expected to run into strong opposition in Congress, which will need to approve any budget. NPR's Daniel Kurtzleben joins us. Danielle, thanks for being with us. Thank you, Scott. What do you see standing out in this budget? Well, first off, it would make some big cuts to non-defense spending. It would cut those by nearly one quarter. Now, that is a big category.

2:57It includes education, transportation, scientific research. So it's a deep and broad swath of cuts. And then in turn, there are some big spending additions. Trump wants to boost defense spending by 13 percent to a trillion dollars per year. And not only that, but he's proposing a 65 percent boost to homeland security spending. And that would go in part to mass deportations and completing the border wall, his signature issues. I should add, though, that this is not a full budget. It's an outline and it doesn't include mandatory spending. That's those big social safety net programs like Medicare and Medicaid.

3:32A more detailed full budget that's coming in the coming months. Tell us, please, more about those cuts to non-defense spending. Specifically what? Well, Trump is proposing some really deep cuts to a few agencies. He proposes cuts of more than 50 percent at the Environmental Protection Agency and the National Science Foundation. He also proposes cuts at the Internal Revenue Service, at the National Oceanographic and Atmospheric Administration, or NOAA. I mean, really, if it's an agency that doesn't do immigration or defense, there's a good chance that Trump wants to cut it. He also proposes some cuts to education, although the administration did take care to specify that they don't propose cutting Head Start funding.

4:11Why does the administration want to cut spending at the National Oceanographic and Atmospheric Administration or spending for scientific research? Well, that's because there's a lot of culture war in this budget, and a lot of programs are argued against on those grounds. Now, in this short document, the phrase DEI, for example, shows up 31 times. Woke shows up 12 times, and so on. Cuts from NOAA are justified because of that agency's climate work. The budget says that some programs, quote, radicalize students against markets. So in that way, the budget is very Trumpy. But that said, there are some traditionally fiscal conservative moves in here.

4:51For example, the budget proposes moving a bunch of federal programs like rental assistance out of the federal government and to the state and local level. I talked to Jessica Riedel. She's a budget expert at the right-leaning Manhattan Institute. And as a fiscal conservative, she likes some parts of this budget, but she said the cuts should be going to deficit reduction. And instead, they're going toward defense. There's no deficit reduction here. And if one accounts for the revenue losses from cutting IRS staff, one could argue that the net effect of this proposal would be to increase budget deficits.

5:27Danielle, it's Congress that ultimately makes spending decisions. How much attention should we pay to this document? You're right. This is just the starting point of a conversation with Congress, and presidents don't usually get to call the budget shots. But the fact that Trump keeps trying to cut spending on his own changes things. I talked to Brendan Duke at the left-leaning Center for Budget and Policy Priorities. Here's how he put it. I certainly think that they're shooting with live ammo with their budget in a way that is not true of most budgets because they have shown their willingness to try to do these sorts of cuts without congressional sign-off.

6:04There have been some court challenges that Trump's attempted cut so far, but congressional Republicans, they haven't really pushed back on those moves. So this budget could be a roadmap for things to come from the Trump White House. And there's Daniel Kurtzleben. Thanks so much. Thanks, Scott.

6:26President Trump's tariff policy has generated enormous economic uncertainty at home and abroad. The U.S. economy is shrinking, consumer confidence is faltering, and yet the job market still appears to be strong. We're joined now by NPR's Scott Horsley. Thanks for being with us, Scott. Good morning. Good to be with you. Let's begin with this positive note, because even with the backdrop of the president's trade war, employers continued to add a lot of jobs last month. This sounds encouraging. Yes, that's right. employers added 177 ,000 jobs in April, not quite as many as the month before, but more than forecasters had expected.

7:05And the unemployment rate held steady at a low 4.2 percent. That suggests that even with all the tariff chaos of the recent weeks, employers are still hiring. Wages are also still going up. So with more people working and paychecks getting bigger, that should provide some juice to keep the economy moving forward. But we also learned this week that the economy went backwards a little bit January through March. What do those numbers disclose? Right. Gross domestic product, which is the broadest measure of the economy, contracted in the first three months of the year. After fairly strong growth in the waning months of the Biden administration, in particular, consumer spending slowed down.

7:47And it's really a two-speed economy here. Wealthy people are still spending pretty freely, but the rest of the country is tightening its belt. One example is McDonald's. A lot of customers there are budget conscious, lower middle income people. This week, the chief financial officer, Ian Borden, said McDonald's U.S. sales had dropped more than three and a half percent in the early months of this year. The big thing is people are just visiting less, and that speaks to, I think, the pressure on consumers, consumer sentiment. Obviously, the things that we've been talking about for a while now, inflationary pressures, interest rates that are weighing, obviously, particularly on lower consumers, and that's spilling over into middle-income consumers right now.

8:29McDonald's is expanding its discount menu to try to bring more customers through the doors. But, you know, as an economic indicator, that drop in sales at my old employer McDonald's is not such a happy meal. Well, and they miss you still. General Motors, another iconic U.S. company, also had some sobering economic news this week. What did they say? GM projected that the president's tariffs could cost the company as much as$5 billion this year. The company hopes to mitigate some of that by ramping up production at a truck plant in Indiana, shifting where some of its parts come from. But this is a reminder that a lot of domestic manufacturers rely on imports for parts and for raw materials, and they are struggling with Trump's tariffs.

9:14Automakers cut almost 5 ,000 jobs in the U.S. last month. Factories overall are in a slump right now. Tim Fiore conducts a monthly survey of factory managers for the Institute for Supply Management, and he's hearing a lot of complaints about how the trade war is driving prices up and driving business away. This is not good. This is just another confirmation that tariffs are probably taking this in the wrong direction. We could be on a growth profile here if not for the administration trying to change the way the entire world does business. As the trade war heated up last month, we saw factory orders, factory output, and factory employment all come down.

9:52Yet the stock market ended the week on a high note. What are investors figuring? This is one of those weeks when you can see the economic glass as half full or half empty, depending on which of the indicator numbers you look at and where you think the trade war is going. For the moment, investors are drinking from the half-full glass, but that could easily change next week. And Pierre Scott Horsley, thanks so much. You're welcome.

10:25President Trump's former national security advisor, Mike Waltz, lasted barely 100 days in his post. He was widely criticized for accidentally adding a journalist to a chat group that was discussing military strikes on Yemen. He's been replaced by Secretary of State Marco Rubio, who will now add the title of National Security Advisor to his growing roster of roles. But in a time of global tensions, will he have the ability to do both jobs? Ampere's National Security Correspondent Greg Myrie joins us. Greg, thanks for being with us. Good to be here, Scott. Let's start with the latest. National Security Advisor Mike Waltz was removed, or should we say relocated from his role.

11:11What was the stated reason? Where did he go? So Trump plans to nominate Waltz to become the U.S. ambassador to the United Nations. Now, Vice President J.D. Vance tried to downplay any sense of turmoil. In an interview on Fox News, he said Waltz was being given a new position for which he seemed better suited. The media wants to frame this as a firing. Donald Trump has fired a lot of people. He doesn't give them Senate-confirmed appointments afterwards. So still, Trump wouldn't be doing this if he wasn't unhappy with Waltz's performance in some way, and this U.N. job is seen as a bit of a consolation prize.

11:46Now, Waltz took responsibility for accidentally adding a journalist to that now infamous Signal group chat back in March, and that was probably one contributing factor to his move. And yet, did he make the same misstep this week? At Tuesday's cabinet meeting, a Reuters photographer was there. He took a photo sort of over the shoulder of Waltz, and it showed Waltz using signal on his phone. And in addition to this, Waltz has had some policy positions that seem a bit out of sync with Trump. Before he joined Trump's team, he was very tough on Russia and supportive of Ukraine in contrast to Trump.

12:21So this was probably a factor as well. The president is replacing Waltz, at least temporarily, with Secretary of State Marco Rubio, who will also keep his job as Secretary of State. This is a lot of work, isn't it? Yeah, I think the first thing Rubio is going to need to do is clone himself because he's going to have to be in two places at once. The secretary of state is in constant motion, traveling from one foreign capital to the next. In contrast, the national security advisor is usually quite close to the president. His natural habitat is the White House and the Situation Room in particular.

12:57His job is to work with various agencies, the Pentagon, the CIA, the State Department, and help the president sort through policy options. So it's not a natural fit to do both jobs simultaneously. This is likely a temporary arrangement, and it does suggest Trump is putting a lot of trust in Rubio for now. One other note, the last time this happened was under President Nixon when he put Henry Kissinger in both those roles. Rubio seems to have Kissinger beat. He has two other jobs as well, the acting head of USAID and the acting head of the National Archives. Before the shakeup, it seemed that the defense secretary, Pete Hegseth, might be the cabinet member most likely to lose his job.

13:38Does Secretary Hegseth seem safe for now? Well, given Trump's unpredictability, nothing is certain. But Hegseth looks to be safe for the moment. He's still facing a lot of criticism. His handpicked advisers have been dismissed. So it seems there's still some turmoil at the Pentagon. And as you noted, Scott, there's unprecedented churn in Trump's national security team in his first term. He had four separate national security advisors. The first one, Mike Flynn, lasted less than a month. He also had four defense secretaries and four directors of national intelligence. Of course, all of this is occurring at a moment when there are a number of conflicts and challenges abroad.

14:17Bring us up to date. So Trump still wants a ceasefire in the Russia-Ukraine war. That's proving elusive. He's been more supportive of Russia in general. But this week, the U.S. signed an agreement with Ukraine on natural resources. So this may keep Trump a bit more engaged with Ukraine. Trump came into office just as the Israel-Hamas truce was taking effect. That's now collapsed. The war in Gaza grinds on amid a major humanitarian crisis. And today marks seven weeks since the U.S. launched a bombing campaign against the Houthis in Yemen. And we're still getting minimal information. We do know the U.S.

14:53has lost at least a half dozen drones at$30 million apiece. And a jet fighter, which cost more than$60 million, fell off the deck of an aircraft carrier this week and sank in the Red Sea. NPR's Greg Myrie, thanks so much. Sure thing, Scott.

15:13And that's up first for Saturday, May 3rd, 2025. I'm Aisha Roscoe. And I'm Scott Simon. Hold up! One more thing for you today here at Up First. We take keeping you informed seriously. Meanwhile, our friends at NPR's Wait, Wait, Don't Tell Me take making fun of the news very seriously. Each week they create a news quiz and we want to give Up First listeners the chance to play along. Test your knowledge of the week's news against the show's panelists by listening every weekend. Here is this week's lightning fill-in-the-blank news quiz. Now on to our final game, Lightning Fill-in-the-Blank. Each of our players will have 60 seconds in which to answer as many fill-in-the-blank questions as they can.

15:56Each correct answer now worth two points. Bill, can you give us the scores? Joyelle and Hari each have three. Peter has two. All right. So, Peter, you are in second place. That means that you are going to go first. Here we go. Fill-in-the-blank. In response to the Signal texting scandal, Trump announced he was reassigning National Security Advisor blank. Whoever that guy is. Yes. His name is Mike Waltz, and he is going to be UN ambassador. At the end of April, both the S &P 500 and the blank closed in the red. The other one, the Dow Jones. Yes, the Dow Jones. This week, Canada and Mexico reported outbreaks of blank.

16:33Oh, are we exporting measles to them? Yes, we are exporting things. Trade continues. On Tuesday, lawmakers in Florida signed a bill to ban blank and the state's drinking water. Fluoride? Fluoride, yes. This week, a highway in Texas was shut down for 12 hours after a truck spilled$800 ,000 worth of blanks. Oh, I heard about this. Dimes. Yes, dimes. Not dime bags. Dimes. On Wednesday, it was revealed that Martin Scorsese filmed one of the blanks' final interviews. One of the blanks? Yes. That is a clue. Oh, a pope. The pope, yes. On Monday, blank kicked off her Cowboy Carter world tour in Los Angeles.

17:12The pope for black women, Beyonce. Yes! This week, a priest in Pennsylvania was sentenced to community service after he stole$40 ,000 from his parish and spent it on blank. Cowboy Carter tickets. No. One ticket. Exactly what I was saying. Power-ups in Mario Kart. $40 ,000? $40 ,000. The 52-year-old priest used the parish credit card to buy thousands of dollars in video game power-ups for Mario Kart Tour. Oh, my God. God, can you imagine going to the confession booth saying, Bless me, Father, for I have sinned in hearing, It's a me. Bill, how did Peter do in our quiz? Very well. Six right, 12 more points.

17:5414 is his total. All right. Joyelle. Yes. I am arbitrarily choosing you to go next. Here we go. Fill in the blank. On Tuesday, to commemorate his first 100 days in office, blank held a rally in Michigan. Trump. On Monday, Spain and Portugal were hit with a massive 12-hour blank. Blackout? Yeah, power outage. This week, severe blanks tore through 12 states. Tornadoes. And storms, yes. On Wednesday, a judge suggested opening a criminal case against blank for their app store policies. Oh, Apple? Right. After the Lakers lost their spot in the postseason, blank hinted he may retire from the NBA. LeBron?

18:30LeBron James. On Thursday, George Clooney, Bob Odenkirk, and Sarah Snook were all nominated for blank awards. Tony! Yes, this week, the U.S. Navy lost a$60 million F-18 fighter jet. after the aircraft carrier, it was on blanked. Crashed into the ocean? No, the aircraft carrier turned too quickly and the jet slid off and into the water. The Navy confirmed that a quick turn caused the plane to slide off the ship and into the ocean, which is a real, you know, you had one job, aircraft carrier. Also, they are famously the slowest things to turn. Yes, I know. It's a cliche, right? Well, you know, getting the government to change just like turning an aircraft carrier.

19:11Turns out, turning an aircraft carrier just jerked the wheel really hard. Bill, how did Joy-El do in our quiz? Six rights, 12 more points. Slipping by Peter with a 15. There you are. You didn't even need it. You didn't even need it. So Hari is left to play. How many does he need to win? Well, six to tie and seven to win. All right, here we go, Hari. This is for the game. Fill in the blank. Months after tense negotiations began, the U.S. signed a rare minerals deal with blank. Ukraine. Right. On Monday, the White House fired all the scientists working on a massive study of blank's effect on the United States.

19:47What are fruity pebbles? Climate change. Climate change. In her first major speech since leaving office, blank sharply criticized Trump's policies. Kamala Harris. Right. During an interview this week, Ben Affleck said he thought that blank was the best work of his career. What are his children? No. What is, you think this is Jeopardy? Let me have dreams, Pierre. No, no. He said the best work of his career was the DVD commentary track for Armageddon. On Thursday, department store Blank fired their CEO for funneling business to his romantic partner. Macy's? No, Kohl's. On Wednesday, officials in Nepal drafted a law requiring anyone who wants to climb Blank to be an experienced climber.

20:33Mount Everest. Right. Last week, a woman in South Carolina sued a local restaurant after she took a bite of her sandwich and cracked her tooth on blank. What is a gold nugget?

20:46She cracked her tooth on another person's tooth.

20:52Apparently, the woman bit into her sandwich, cracked her molar on something hard, and then discovered it was a tooth. She's understandably traumatized, as I believe you are now. But this is why you have to be specific when you order a burger with everything on it. Bill, did Hari do well enough to win? How dare you? We've got to read him anyway. Three right, six more points. Nine means Joyelle is the Kent. Well done. Perfect. See how closely you followed the week's news and have some fun by listening to the podcast. Wait, wait, don't tell me the NPR news quiz every Saturday. It's available in the NPR app and wherever you get your podcasts.

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