The GOP slashed $1 trillion from Medicaid's budget. What now?

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So, what the heck is going on with tariffs anyway?

Anyone else need a refresher?

From American Public Media, this is Marketplace.

In Baltimore, I'm Amy Scott in for Kai Rizdahl.

It's Friday, the 11th of July.

Good to have you with us.

90 days have come and gone since the president first announced his April the 2nd tariffs, tariffs that were then paused for 90 days, which would have been up Wednesday of this week, had the president not announced on Monday that he'd be extending that pause until August 1st in order to make more deals.

No more extensions, probably.

Confused?

Well, so is the global economy.

Good thing we've got Catherine Rampell at the Washington Post and MSNBC and Courtney Brown with Axios here to help us out on a Friday.

Hello, you two.

Happy Friday.

All right, Courtney, let's start with you.

This was the week we were supposed to have more certainty about trade policy.

That obviously did not happen.

Can you give us a quick summary of where things stand now?

Yes, we don't know.

That is the summary in short.

We don't know where things stand.

What we do know is that

we had Liberation Day on April 2nd.

Those tariff rates that were announced were paused.

until Wednesday.

And there was this idea, I think, on Wall Street that the trade war had a beginning date and an end date.

And that end date was supposed to be Wednesday.

What we learned this week is that

there seemingly is no end date to this trade war.

We know a bunch of letters were published on President Trump's social media site, Truth Social, outlining insert tariff rate here for insert country here effective August 1st.

We just don't know what's going to happen between now and August 1st, and then what comes after August 1st.

So more uncertainty.

All right.

Well, Catherine, I mean, what happened to 90 deals in 90 days?

Why did so few actually get done?

Well, there were never going to be 90 deals in 90 days.

First of all, for it to be a real trade deal, it has to get ratified by Congress.

That usually takes years to negotiate and go through.

So it was always a fantasy that would happen.

But even if it was something less binding than a true trade deal,

it was going to be very challenging for Trump to get these things through because

he can't quite articulate what he is actually hoping to get, right?

Many of his own objectives in these trade deals or trade negotiations are contradictory.

Is he trying to actually maximize tariff revenue, potentially to offset the cost of those tax cuts that just came through, in which case there is no incentive to reduce tariffs.

Is he, in fact, using tariffs as a negotiating ploy, and they're not supposed to be permanent, so that he can get more manufacturing here or what have you?

I'm dubious that that will happen, or get some other kinds of concessions out of these other countries.

If you look at now how he's treated Brazil,

in the case of Brazil, he has announced

huge new tariffs because he thinks his friend Bolsonaro has been mistreated.

So, how does that fit into this rubric of what the objectives are?

So,

part of the problem is if he doesn't know what he wants, it's very difficult for any other counterparty to negotiate with him.

How do you negotiate?

How do you even offer concessions to someone who can't figure out what their own objectives are?

And that's kind of the situation we're in right now.

A deal is just whatever Trump says the deal is at any given point.

And it's just difficult to resolve whatever the dispute is.

Right.

And Courtney, you pointed this out in a piece today that, you know, Trump is using trade policy as a weapon to try to extract other policy goals that have nothing to do with trade.

Catherine mentioned Brazil.

You know, of course, fentanyl plays a role in tariffs against threatened against Canada and China and Mexico.

How does that strategy compare to his predecessors or even his own first term?

I'm not sure we've seen

the U.S.'s economic might

and its influence on the global economy wielded in the way that Trump has wielded it with respect to trade and tariffs.

And if we have, certainly not of this magnitude or to this extent.

Everything is trade war, which is, I think, what we wrote in our story.

It is Trump's go-to

tool and mechanism to try to get what he wants from friends and foes.

And actually, he said today that the U.S.'s friends are apparently treating the U.S.

worse than its foes.

So he sees this as the go-to way to get what he wants.

The problem is,

A,

we don't know how well that strategy will work.

And also, there are economic repercussions for the U.S.

with this strategy.

Our economy is in kind of purgatory right now because it's hard to operate a business when you don't know what tariff rate you need to pay six months, nine months, 12 months.

So it's a very dicey strategy, but one that I'm not sure

we've seen ever.

But at the same time, I mean, the economy has been remarkably resilient in terms of job market data and even inflation.

Catherine, do you think the president has been a little emboldened by that

to keep pushing this chaotic policy?

Yes.

You know, initially, there were

many economic commentators and journalists, I I would count myself among them, saying, this is going to be catastrophic.

These tariffs are going to be really bad and raise prices and slow growth and put people out of work and

all of these bad things.

And that hasn't materialized, at least not yet, in part because the tariffs have not really been binding, right, as we've just been discussing.

There's a lot of uncertainty, so companies are holding off on making decisions, but they're not necessarily passing along.

Well, some companies are passing along price increases, but many of the companies are not actually experiencing the price increases yet.

And I think that lack of

consequences so far, in a way, is good, right?

I'm not rooting for the economy to crash, certainly not.

And I don't want inflation to get worse, but it also may temper or it may

embolden Trump to say, oh, well, we've withstood all of this, and there was doom and gloom predicted.

Maybe we can just keep going along as is.

All right.

Well, to be continued, Catherine Rampell, the Washington Post, and MSNBC, Courtney Brown is at Axios.

Thank you both so much and have a good weekend.

You too.

You too.

On Wall Street today, down, but not that down.

We'll have the details when we do the numbers.

Something we didn't get to in the wrap: the Fed and President Trump's ongoing attacks on Chairman Jay Powell for failing to lower interest rates, even as inflation has so far remained muted in spite of higher tariffs and the threat of much more to come.

The markets have their own opinions about where rates are headed, and despite all the trade policy chaos, investors seem hopeful the Fed will start cutting rates later this year.

Marketplace's Mitchell Hartman explains.

U.S.

Bank's interest rate forecast is right in line with what futures markets are indicating, says chief investment officer Eric Friedman.

The Fed starts cutting starting in the September meeting and probably one more by the December meeting, probably by half a percent.

But this is not a sure thing that the Fed cuts some or at all by year end.

Fed Chair Powell has reiterated that rate decisions will be data-driven by inflation and employment.

It's two congressional mandates, says former Fed economist Claudia Somme.

Inflation is and has been above the Fed's 2% target for more than four years.

And we're in a world where the unemployment rate is very low, close to 4%.

They want to see confirmation that inflation is coming down before they start cutting rates, and that's going to take some time.

And keep in mind, President Trump's perennially delayed tariffs are what's driving inflation risk right now.

And many are not set to kick in until August 1st, just six weeks before the September FOMC meeting, says Joanne Bianco at ETF provider Bond Blocks.

That continues to increase the level of uncertainty to the path for the Fed and how tariffs filter into economic data.

The last thing they want to do is cut rates and then see inflation spike.

And just today, the Wall Street Journal reported that Chicago Fed President Austin Goolsby says President Trump's latest tariff threats could muddy the inflation data waters and delay further rate cutting.

I'm Mitchell Hartman for Marketplace.

As I'm sure you've heard at this point here and elsewhere, the recently passed GOP tax and spending law cuts about a trillion dollars from Medicaid over the next decade.

Those cuts, says the Congressional Budget Office and other independent analysts, will add upwards of 11 million people to the ranks of the uninsured.

They won't have insurance, but they'll still have health care costs, as Marketplace's senior Washington correspondent Kimberly Adams reports.

The federal government made the cuts to Medicaid, but exactly what gets cut is going to be left up to the states because they administer the program.

And there are some aspects of Medicaid that, by law, they can't touch.

The one thing they have to do is they have to continue to fund mandatory services.

Barbara Merrill is CEO of Anchor, a home care industry trade group.

Services like nursing home funding or funding for hospitals, those services will be paid first.

And given the aging population, those mandatory services will eat up a lot of what's left after the cuts.

So states will have to look elsewhere for money, raising taxes, cutting other programs like education, or cutting other aspects of Medicaid.

One thing they could do is they could reduce the number of people who are eligible for Medicaid, therefore reducing the number of people who are using nursing home care.

Priya Chidambaram is senior policy manager with KFF's program on Medicaid and the uninsured.

In all likelihood, when you're thinking about optional services provided under the Medicaid program, it's home care services that are the bulk of the money of optional services.

But while those services may be optional under Medicaid law, they're vital for many people.

Funding for at-home nurses and health aides to allow seniors to age in place, money for vehicle or home modifications to help people with disabilities live independently or to support their families.

Do you know that I love you?

I know.

How much do I love you?

Victoria Cciano came to DC from Pennsylvania with her nine-year-old son Cole, who was keeping busy on his tablet after a day of going all over Capitol Hill in his motorized wheelchair, lobbying members of Congress to vote against the bill?

Cole was born with an illness that affects every system in his body.

He has 36 doctors that we see between two hospitals.

He has a permanent IV that helps him get his nutrition.

He has feeding tubes.

The list goes on and on.

Chiano says, if not for those optional Medicaid programs, Cole's medical expenses would have pushed their family into bankruptcy.

She says the supplies for the IV alone are at least $17,000 a week.

Many of the people relying on Medicaid to cover home or community care deal with similar numbers.

An annual budget for services can cost upwards of $60,000 per year, which is prohibitively expensive for most people.

Richard Edwards runs government relations for Amavi, a company that provides home and community-based care.

He says if states do cut home care services, people who rely on them won't have many options.

The only other place to go for that is going to be a skilled nursing facility.

You know, it's something that is much higher cost, that's much more restrictive.

And capacity for those kinds of settings is limited because they are also expensive to run.

I met up with Victoria and Cole Sciano on Capitol Hill just after the House passed the One Big Beautiful bill, and Victoria was reeling, weighing exactly such a choice.

If this ends up being implemented, this could make the difference of him being able to stay home with me.

We might be in a position, sorry, where he would have to be surrendered to a hospital.

Because there's no way she can swing more than $6,000 a week for the nursing support Cole needs, $4,000 a month for feeding tube supplies, and more.

I mean, obviously, I'm going to mortgage everything I have first, and I will go broke and bankrupt and do everything I can to prevent that from happening.

She says the group they came to Capitol Hill with, Little Little Lobbyists, will continue to advocate at the state and federal level to keep coal at home with her.

In Washington, I'm Kimberly Adams for Marketplace.

Coming up.

Can you imagine building a nuclear plant every eight hours?

Honestly, no, I can't.

But first, let's do the numbers.

The Dow Jones Industrial Average lost 279 points, 6 tenths percent, to close at 44,371.

The NASDAQ was off 45 points, 2 tenths percent, to finish at 20,585, and the SP 500 slipped 20 points, a third of a percent.

And at 6,259 for the week, the Dow subtracted 1%.

NASDAQ dipped a tenth of a percent.

The SP 500 dwindled 3/10%.

The Kraft Heinz company is planning a breakup.

The Wall Street Journal reports that the mega food company will split, with many Kraft products becoming part of a separate entity.

This comes 10 years after the merger that brought together Oscar Meyer, Kraft, Mac and Cheese, and Grey Poupin, all under one umbrella.

Shares grew 2.5%.

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This is Marketplace.

I'm Amy Scott.

We talked about Medicaid cuts in that big Republican tax and spending law.

Another change is an end to incentives for clean energy from the Biden-era Inflation Reduction Act, including tax credits for solar power.

Solar is unquestionably one of the highest impact ways we can reduce carbon emissions in our power supply.

But with Washington clearly oriented against it, where does that leave us?

Bill McKibben has spent decades as a writer and activist getting the word out about climate change and how we can build a more resilient world.

His latest book is Here Comes the Sun, A Last Chance for Climate and a Fresh Chance for Civilization.

It takes on the topic of solar.

Thanks for joining us.

Well, what a pleasure to be with you.

So why solar?

Why is that a last and maybe our best chance at avoiding climate calamity?

You know, I've been working on climate change for a very long time, Amy.

I wrote the first book for a general audience about what we then called the greenhouse effect back in the nineteen eighties.

And the first hint that we've actually had of something that's scaling fast enough to make even a small difference in how hot this planet gets has been the explosion in the last two years of the amount of solar power on this planet.

Last year, 95%

or so of new electric generating capacity came from the sun and the wind.

And that's

remarkable.

You can see it happening everywhere.

It's centered in China, which is building about half the clean energy on the planet.

Forget petro-states.

They're now the world's first electro-state.

I mean, it's really remarkable.

Why has this happened in just the last couple of years?

Money, money, money.

Some point in the last five years or so, we crossed an invisible line where it became cheaper to generate power from the sun and the wind than it did from setting coal and gas and oil on fire.

That's an epochal moment in human history.

We really could wind down combustion quickly on this planet, saving something of the climate, preventing millions of deaths a year from breathing the bad effects of that combustion.

And not in a minor way, we could take some of the pressure off the geopolitics of this earth.

It's pretty hard to fight a war over sunshine.

Aaron Powell, but the myth that solar is expensive is so pervasive.

You write it's considered like the whole foods of energy, but actually it's more like Costco.

Why is that

so sticky?

Aaron Powell, well, it's because it's been true for 40 or 50 years.

Ever since we started talking about this stuff, we've called it alternative energy.

And that's because fossil fuel was always and remains fairly cheap.

But activists and government policymakers set the conditions that began to allow demand to build.

And as that demand built, across the world, but especially in China, people figured out how to make really cheap solar panels.

There's now parts of Europe where people are putting up solar panels instead of fences because it's cheaper than buying good wood.

It's only in the U.S.

where we're, at least for the moment, determinedly turning our back on all of that.

Right.

We have to talk about the 900-page Republican tax cut and spending bill, known as the One Big Beautiful Bill, that became law and will essentially remove incentives for solar power here in the United States.

How big of a setback is that for the overall energy transition?

Aaron Powell, it's a huge setback for the American role in that energy transition.

But in the long run, it's probably going to be at least as big a problem for us economically.

We're essentially ceding the future to the Chinese.

And it's possible that 20 years from now, the U.S.

will be a kind of museum of coal-fired power plants and internal combustion engines while the rest of the world has moved on to cheap, clean technology.

That would be a great shame.

And it's not inevitable, even with the current powers that be, there's a lot that can be done at the state and local level to

surge ahead with renewable energy, even while Washington is

sticking its head as far down the sand as it can get it.

As you mentioned, China is leading the solar revolution, leaving the United States behind.

You've been to China's solar valley.

What did you see there?

Well, I've been to China a bunch of times and watched different phases of this, including the very early ones.

The Chinese figured out early on that this was where the future lay.

And that's why now the pace at which they're doing this is truly incredible.

In May of this year, China was putting up a gigawatt's worth of solar panels, and a gigawatt's worth of solar panels is the rough equivalent of a nuclear or a coal-fired power plant.

They were doing that every eight hours.

Can you imagine building a nuclear plant every eight hours?

That's essentially what they were doing.

And they've coupled it, of course, with the technologies to take full advantage of all that electricity.

Aaron Powell, all this kind of makes you wonder, does the world even need the U.S.

to be fully on board?

Can we get to a livable

climate ceiling without U.S.

involvement?

The problem is not only that we're still a second biggest source of carbon in the world,

but also that the other thing that the Trump administration is doing is trying very hard to sell our fossil fuels abroad.

For the moment, we're going to have to do this without the help of Washington, but that doesn't mean we can't do it.

You know what state in America is putting up renewable energy far faster than any other?

I do know the answer, but

it's a lone star state of Texas.

And it's because they understand the economics of it.

That's what's keeping their rapidly expanding grid affordable and probably just as importantly, reliable.

I was telling my producer before we started that reading the book is kind of an emotional roller coaster.

It's at times extremely hopeful and also very depressing.

At the end of the book, you write that when you finished writing your first book about climate change, The End of Nature, you felt catatonic.

But after this book, 40 years later, you felt a combination of sadness and exhilaration.

Why exhilaration?

Well, at the prospect that there's finally something we can do that can scale.

I'm sad because of all that we've already lost and will continue to lose.

But we finally have something that, if we decided to do it at the pace that it's possible to do it at would get us somewhere.

Bill McKibben's latest book is called Here Comes the Sun, A Last Chance for Climate and a Fresh Chance for Civilization.

It comes out later this summer.

Bill, thank you so much.

Thank you very much, Amy.

You can hear an extended version of our conversation on our Climate Solutions podcast, How We Survive.

This final note on the way out today: one more tariff-related item.

Sorry, the Treasury Department said today: U.S.

revenue from customs duties rose to a record $27.2 billion in June, fueled by President Trump's tariffs already in effect.

Receipts for the first nine months of the fiscal year, which runs from October 1st to September 30th, surpassed $100 billion for the first time.

A reminder that's money paid by the companies importing those tariffed goods and usually passed on to consumers.

Our theme music was composed by B.J.

Lederman.

Marketplace's executive producer is Nancy Fergali.

Joanne Griffith is the chief content officer.

Neil Scarborough is the vice president and general manager.

And I'm Amy Scott.

Have a great weekend.

We'll be back on Monday.

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