Today, Russ Vought, the Office of Management and Budget Director, testified before the House Budget Committee. Lawmakers quizzed him on Trump’s proposed $1.5 trillion defense budget (a 44% increase) and cuts to domestic programs.
Bobby Kogan, Senior Director of Federal Budget Policy at the Center for American Progress, joins Jen to unpack what exactly is going on with Trump’s budget. Importantly, Kogan notes there is somehow always enough money for tax cuts for the rich, but never enough money for the rest of us. Tune in to find out exactly how Trump and Vought are destroying the trust between the American people and their government.
Bobby Kogan is the senior director of federal budget policy at American Progress, working to ensure the federal budget prioritizes policies that help the most vulnerable people. He is an expert in federal budget issues, including aggregate spending, revenues, interest, deficits, and debt. He is also an expert in the congressional budget reconciliation process, as well as in budget concepts and budget scorekeeping.
The following transcript has been edited for formatting purposes.
Jen Rubin
Hi, this is Jen Rubin, Editor in Chief of The Contrarian. I am thrilled to have Bobby Kogan, who is the head of the budget analysis group at the Center for American Progress. Welcome, Bobby!
Bobby Kogan
Jen, thanks so much for having me on.
Jen Rubin
Donald Trump set up a budget that we used jaw-dropping, head-spinning, shocking, but it really was. Tell us in general terms what he proposed giving to defense, and what he proposed in taking away from everything else.
Bobby Kogan
We’ll start broad, and then we’ll get specific. The takeaway is that it will be a historic increase to defense, and a historic cut to non-defense, to everything else. So when I say historic increase to defense, I mean it would be the biggest in more than 50 years in terms of a one-year increase, but if you ignore the times we’re actively engaged in a ground war, it would be the biggest one-year increase in all of U.S. history events. that total ends up being $445 billion above last year’s level, it’s a 42% increase, so it’s just an enormous amount of money.
On the non-defense side, it would take this group of spending, it’s called non-defense discretionary. It’s basically ignore defense, and ignore, like, Medicare, Medicaid, Social Security, and food assistance, and it’s the rest of the budget. It would take that part of the budget down to its lowest level since the Eisenhower era, and maybe since there’s kind of a one-year blip there, and not counting that would be the lowest since the Hoover administration. So, it would just, like, radically transform the relationship that Americans have with their government. Now, this comes across tons and tons and tons of cuts to programs that Americans rely on. So, one example is he would completely eliminate LIHEAP. This is a program that helps very poor households heat their homes in the winter so they don’t freeze to death, right? So, it’s a small program, entirely eliminate that sort of stuff.
Huge cuts to the Small Business Administration, which helps small businesses get started, help them have easy access to capital, that sort of stuff, imposing hundreds of millions of dollars of new fees on businesses as well. Entirely eliminate preschool development grants, which helps states set up preschools. It’s just kind of across the board, you name it. Oh my gosh, actually, one other thing I should mention, though, the WIC program helps, pregnant moms, it helps newborns, and it helps infants have enough food, and it would entirely eliminate the fruit and vegetable benefit inside of that. You look across the board, and it’s tons and tons and tons of cuts to programs that ordinary Americans rely on, and it sinks that money into defense. So it’s just rewriting the budget.
Jen Rubin
When you look at the breadth of what is being cut, everything from Section 8 housing to nutrition to, grants for, K-12 and, higher ed. What’s the overall impact on states? Because they’re going to be pressed, aside from the things they get directly, to try to fill in the gap. Talk to us a little bit about what states are going to experience as a result of this.
Bobby Kogan
Yeah, so you’re totally right. State budgets are heavily reliant on federal assistance, education is one of the major ones, but highways, housing assistance, childcare assistance, these are things where states get federal money, and then they try to help their citizens. The way that the Trump administration frames it is they say, oh, we’re sending the money back to the states.
But it’s not like they took the money away from the states and they’re now giving it back to the states. It just means that there’s less aid. And so what that means is that states either are gonna make do with less Or, since most states have balanced budget requirements, they are going to increase sales taxes, or property taxes, or income taxes to pay for it, and since most of the ways that states tend to… the federal income… the federal tax structure is progressive, states tend to have a very regressive tax structure that hits the poorest the most, and so the net effect of this is either they’re gonna tax the poor to try to pay for the lost money, or they’ll just be out the money. This means less money for schools, less money for roads, less money to kind of help recreational areas.
Jen Rubin
So, the only people who are getting money back are the people who are benefiting from that enormous tax cut. The trillions of dollars in tax money. If you put that back into the budget, would you need any of these other cuts to social programs? In other words, are these cuts really going, not only just for defense, but to pay rich people’s tax cuts?
Bobby Kogan
Yeah, I think that that’s a totally fair frame here. It’s pretty difficult to justify pinching pennies for programs that help ordinary Americans when we just did trillions and trillions and trillions of dollars of tax cuts that overwhelmingly, disproportionately went to the richest Americans. And so, like, an example here is that, you know, the average person maybe got, like. $1,000 in tax cuts. The average top 0.1%-er got a $300,000 tax break.
Ordinary Americans are always asked to do more with less when it comes to the budget, but the richest Americans are never asked to do more with less when it comes to tax cuts. In fact, the Trump administration is always looking for new, creative, exciting ways to give more tax cuts to the rich, and then they come and they say, we’re gonna take money, you know, from the neediest people. In fact, I’m glad you mentioned the big, beautiful bill, because even in that one, as an example, they did historic tax cuts, but they also did historic cuts to Medicaid and historic cuts to food stamps at the exact same time.
They kicked 10 million people off their health insurance. They took food away from literal children, if their parents lose their job in an economic recession. Food away from children to help pay for tax cuts for the rich. I would say this is part of the same thing. They say there’s always money for tax cuts, and there isn’t money for us, for everyone else.
Jen Rubin
Let’s shift gears to the outstanding issue of the Department of Homeland Security, which still has not been resolved. There’s a lot of talk now about a skinny reconciliation bill. Explain what that is to our viewers and readers.
Bobby Kogan
Sure. So, as a reminder to folks, normally, when you want to pass something through the House, it just takes a simple majority, but when you want to pass something through the Senate, it requires 60 votes instead of just 51, because of this thing called the filibuster. But, under reconciliation, you can do it with only 51 votes instead of 60. You have to follow the rules of reconciliation, but if you do, then all of a sudden you could do it with only a simple majority. That’s how the Bush Tax Cuts Round 1 and 2 were passed. That’s how Obamacare Part 2 was passed, that’s how Trump almost repealed the ACA, it’s how Trump did the Trump tax cuts, it’s how Biden did the American Rescue Plan and the Inflation Reduction Act, it’s how Trump did the big, beautiful bill.
So, Republicans want to come back, and they say, we want to give more money to DHS. Well, why do they want more money for DHS? It’s because there is a fight, there’s a standstill right now over DHS funding. DHS has been shut down for well over a month now. It’s because Democrats want, kind of oversight. Obviously, DHS has killed American citizens and non-citizens alike for protesting, you know, exercising their First Amendment rights and Second Amendment rights as well. Republicans say, no, we don’t want body cams, we don’t want any identification for the folks who are doing this, we don’t want any oversight.
And so, due to the standstill, Republicans say, well, we’ll just fund it alone. And that’s this idea of the skinny reconciliation. Instead of doing a big, beautiful bill where they do tons of stuff, they say, what if we just throw money at ICE and Border Patrol? And the current idea, it’s an evolving thing, but the current idea that they have right now is that they would give sufficient money for DHS through the end of the Trump administration, with no strings attached, no oversight. know anything, so that, no matter what happens, they’d just be able to continue kind of doing the… lawless kind of DHS activities through the end of the Trump era.
Jen Rubin
When they spend all this money on DHS, within reconciliation, do they have to pay for it? Are there any cuts that have to go in with that?
Bobby Kogan
You don’t have to pay for deficits inside of the budget window. So if you do a deficit within the first 10 years, you’re good to go. You should think about the American Rescue Plan, where, you know, in the Biden administration, think actually about the DHS money and the military money that Republicans gave in the big, beautiful bill. It’s anything beyond the 10th year that you have to pay for.
So the only limiting factor will be… how much Republicans are willing to spend. What we’re hearing is they might do $70, $80 billion, but for DHS, but they could do less, they could do more, they don’t have to pay for it. If they choose to pay for it, that would be their decision. Of course, that would be pretty tough to justify. It’s really tough to say, we want to give money to an agency that’s killing citizens, and we’re going to pay for it by taking away your healthcare is a pretty tough political message, but it’s tough for them regardless.
Jen Rubin
Now. reconciliation, the rules there seem to work, in this case, against Democrats, because they can try to put amendments forward for demasking and identification, all these other things, but those may very well be ruled out of order, because they’re not financial issues. So, they get the money, they just don’t get any of the reforms, and that’s what we’re essentially looking at.
Bobby Kogan
Yeah, that’s right. Democrats, I think, will put them forward, but those things would have a 60-vote point of order against them, so instead of just having to peel off, you know, like, 3 Republicans or 4 Republicans, they’d have to… Democrats would have to get 13 Republicans willing to go forward and actively put that in the legislation, and since the whole reason we’re here in the first place is Republicans. don’t want to do that. I think it’s a pretty uphill battle. Very ironically, if this is able to go through, Republican DHS money will have Basically no oversight, instead of the modicum of oversight that it currently has.
Jen Rubin
What happens with the rest of the budget? If the skinny budget just takes care of DHS, what are the Republicans gonna do about everything else, including their defense proposal?
Bobby Kogan
Yeah, I think this sort of thing is gonna blow up appropriations. think this should all be viewed in the context of Russ Vought, OMB director, affirmatively saying that he thought that appropriations should be less bipartisan. And so, sure enough, we are seeing less bipartisan appropriations, just like he asked for. I think this is all gonna make everything more difficult, because The whole point of… Lots of Congress doesn’t work right, and the props doesn’t work right either, but at least that’s something where every year, all four corners get together, they roll up their sleeves, they go through the dirty, you know, the dirty, the gritty parts, and they walk out of there with funding line by line by line, every single part of the government.
And there are lots of problems with the process, but they get it done. And sometimes there’s shutdowns, or whatever. But no one gets everything they want, but everyone gets enough of what they want that, you know, large majorities in both chambers are willing to make this happen. The more that you kind of take out any of the compromised parts of it, the more that the whole nego… and the more that you say, we’ll come to a deal, but we’re gonna change this part of it unilaterally over here, the more the whole thing falls apart. So I think we are looking at much more dysfunction many more shutdowns, and I just think we’re looking at an American government that is less capable of helping its citizens.
Jen Rubin
Well, if we could have a Congress that is less dysfunctional… that is rather more dysfunctional than last year, that would be an achievement. Let’s talk about Russ Vought, who is the head of OMB. He testified today and said some… mind-numbing things. One of the things, for example, he said is that the Bureau of Consumer Protection, which he has tried to ravage. has cost money to Americans. That’s absurd! There’s billions and billions of dollars that have been returned to Americans. How can he say something like that?
Bobby Kogan
Well, if you are not tethered to the truth, then, you know, the sky’s the limit. It’s, yeah, I mean, to your point, it is, I mean, it’s true up-is-down stuff. The CFPB has put billions and billions and billions and billions of dollars back in consumers’ pockets. It’s the sort of thing where, when Trump was kind of first ravaging it, you saw even a lot of very MAGA people saying, like. Well, that doesn’t make sense. Like, I really benefit from this.
I think the real answer is that the Trump administration has gone after any sort of oversight. Financial oversight, consumer oversight, any sort of oversight. And I think that’s within the context here. But, yeah, that’s right. It is a thing that, by getting rid of junk fees, doing click-to-cancel, any sort of thing where a company is really kind of financially worked to take advantage of people. CFPB is supposed to fight that, and has directly and indirectly helped people by preventing a whole bunch of stuff, and directly help people by literally getting money back to people who’ve been taken advantage of. It’s operating at, you know, in a shell capacity, illegally. Ross Vogt is the head of it, but it’s a non-functional thing, and this this is just part of his reworking of the American government.
Jen Rubin
What were some of the other zingers he put out there that kind of just strained credulity?
Bobby Kogan
I mean, it’s near and dear to my heart, so in, in, we talked about the WIC cut, that he proposed in the budget, and I think it was Rep. McGarvey said, you’re cutting, you’re cutting the fruit and vegetable benefit, that’s, that’s, you know, it’s really un-American, and Russ Vogt said, no, we fully fund, WIC, and he’s being clever, it’s because he’s fully funding the part of WIC that he’s not cutting. So we’re, you know, we’re cutting this, and we’re fully funding the remaining part. And, you know, McGarvey just interrupted me, said, you do not, you know, I have the page right here, you know, on this page, whatever.
But the entire Ross Vought test, oh my goodness, he leaned in on impoundment, so this is not sexy, but it’s really, really important. The Trump administration has been illegally not spending money that Congress says it must spend. So they illegally didn’t spend billions of dollars for, like, overseed aid that’s probably already killed hundreds of thousands of people, will kill millions of people, illegally not spending money in the Department of Education, all sorts of things where they were supposed to spend the money and they just didn’t do it. He was asked about it, and he… He asserted that the president has a constitutional authority to ignore spending laws. If that were true, if that were really true, it would mean that Social Security is unconstitutional. It would mean that Medicare is unconstitutional. It would mean that our national highway system is unconstitutional. All the things that say, no, you are owed this money if you’ve done X, Y, or Z, it would mean they’re all unconstitutional. It would mean they’re all voluntary. It’s a really extreme position.
Now, all up and down the field. Russ Vogt was asked about, defunding the IRS, right? So they talk a lot about fraud. One of the biggest sources of fraud is tax fraud, and I’m gonna say this twice, because it’s such a large number. Every year, the United States loses $725 billion. billion dollars of money that it was supposed to take in under the tax code, but didn’t take in due to tax cheats. $725 billion every year. This is bigger than the entire Medicaid program as a team. And the Trump administration, by its own estimates, when it defunds IRS enforcement, it loses money. And Russ Vogt was asked about this, and he said, well, I just don’t think that people cheat on their taxes. He said, I just don’t think when they’re filing their taxes, they’re shooting their taxes.
Jen Rubin
He thinks all of these other programs are rife with fraud. Totally. So he thinks… poor people who are looking for food, or looking for housing vouchers. Those people are fraudulent, but people who pay taxes in… who are supposed to pay billions of dollars are giving every dime they owe? That’s Upside down world.
Bobby Kogan
Totally. I mean, most of us can’t cheat on our taxes, and it’s very simple, right? We have a… we have a, you know, we make wages, and it all gets deducted and everything, you see how much you’re supposed to make, and it’s all simple. It is specifically Russ Vogt’s friends, who have very complicated taxes, and lots of stuff the government can’t see, or whatever. That is where a lot of the tax cheating happens, and that’s where they’ve been doing it.
In fact, if you look at their budget in IRS, they cut in half enforcement last year of people who have at least $10 million of income. Of income! They cut… they cut, yeah, so the audits for people who make at least $10 million per year, they cut their audits in half of where they thought they wanted to be, and they called to, like, cut it another third this year, right? So it’s just a disarming of money going against people who are actively defrauding the American government, and taking that and then saying, my God. we have a deficit. We should instead, kick people out of their homes. We should take food away from them. We should take their heating oil away, right? Like, it’s just a totally different vision of America, and that’s what his… I mean, that’s what his testimony today was about. He was leaning into it. He was leaning into this kind of absurd bizarro reality.
Jen Rubin
Now, we are in an election year. Are Republicans really gonna go for all this? Are they really gonna take the votes to pass $70 more billion dollars? to the department that has killed Americans? Are they really going to then lower it up and get Democrats to agree to $1.5 trillion in defense? What’s your view of whether this is gonna work or not?
Bobby Kogan
I think that they probably have the votes to do just Skinny, right? Just DHS. I think what’s gonna make it difficult for them is they have all sorts of different people who want something more, and they’re worried that if they don’t get it now, they’ll never get it. So, they’re gonna be the defense hawks who really want the money for defense inside of it. They’re not really deficit hawks, but it’s the spending cut hawks who say, yeah, who say, well, if you’re gonna do all this, then I want another chance at cutting nutrition assistance and healthcare and SSI, or that sort of thing.
And then there are gonna be the people, as well, who say, my gosh, I’ve seen the polling, I’m really worried about my job. I want to actually try to do something that helps my constituents for a change. And all of those people are going to be trying to compete, and the more you open up the process, the harder it gets, and then some people complain, they say, well, how come this person got their stuff but not me? How come… you know, whatever, whatever. And so, I think it’s difficult for them.
I think there’s probably a better than half chance that they are able to land the plane on something, but it’s easy to see it unraveling, and I definitely think even if they can do the skinny, skinny reconciliation, I think they will struggle with more things. I think it’s gonna be very tough, right? If they tried to do round one just skinny, and round two, a $350 billion paid for by taking money away from Americans. I don’t think Amer… I mean, the war is already super unpopular. I don’t think Americans are gonna really go for it and say, wait a minute, you have to prolong a war that’s driving up my gas price, and you’re gonna pay for it by taking away my education or my healthcare? Like, that’s not the sort of thing that sits well with the American people.
Jen Rubin
So, if people don’t like this, what should they do?
Bobby Kogan
You need to call—I know, it’s so lame to say—you need to call your representative. Reconciliation is a partisan exercise, so if you have a Republican representative, that’s the only way to stop this is getting Republicans to vote no. So you can call your Republican representative if you have a Republican governor. You call your Republican governor, because they are all tight with that sort of folks. You attend a town hall, lots of people don’t do town halls, but I’ll say—so I worked on the Hill for six and a half years, There is nothing more important than getting, you know, a minute with your member. 80 emails are less important than you spending 1 minute talking to your member face-to-face at a town hall.
So, if your member has a town hall, go to a town hall. It’s… it’s tough. You have to drive a long time, you have to wait a long time, you get to talk for 30 seconds or whatever, but it is the only thing that gets through those folks. So, number one thing, talk to them in person. Number two, you do a phone call. We went over phone calls every single week in our weekly meetings. So that stuff matters. Emails also matter, but those two things are far more important. As they say, talk to your governor as well. It’s an uphill battle, right? Because the whole point is Republicans do have the power to do this. And so, definitionally, it means convincing them that they don’t want to do it. So talking in their language to things that matter to them. why they should be against it. That’s the sort of thing that really matters. That is why Lisa Murkowski voted against ACA repeal. That is why John McCain voted against ACA repeal. That is why Susan Collins voted against ACA repeal, because it was put into terms that mattered to them. So, you have to try to communicate,
Jen Rubin
And the magic words are, if you vote for this, I’m gonna kick you out of office. Right now, that’s a pretty good threat, given the fact that Democrats look like they’re gonna do pretty well. Well, I have to say, the reward if you drive all that way to a town hall is you can embarrass the heck out of your Republican lawmaker, like Mike Lawler, who got screamed at and booed the other day.
So that might be attractive to all of you folks out there. Bobby, thank you so much. You are such a wealth of knowledge about the numbers and the process. I am sure we will have you back to explain as this thing, plays out over the next year. So thank you so much, and thank you for everything you and your friends do at CAP. Absolutely rely on them for great information, so thank you for that.
Bobby Kogan
Jen, the pleasure was all mine. Thanks so much for having me on, happy to come back anytime.
Jen Rubin
Absolutely. Take on.
