[By John Ross, Special Commentator of Observer Web Column]

On April 2nd, Trump announced that the United States would impose comprehensive tariffs on all countries, especially China. His aim was to narrow China's relative growth advantage over the U.S. by increasing the U.S. economic growth rate.

However, due to the reasons analyzed below, Trump's tariff policy cannot achieve this goal - the Trump administration lacks an accurate understanding of the decisive factors influencing U.S. economic growth. Therefore, the following will first analyze why Trump's tariff policy cannot achieve its goal, and secondly discuss the only way Trump can actually increase the U.S. economic growth rate, as well as the geopolitical implications and domestic political consequences of any attempt to achieve this goal.

As we will see, Trump's real strategy is to defeat the American people, intensify their exploitation, and use this victory to attack China. This shows that thwarting Trump's current offensive against the living standards of the American people is precisely in China's interest.

In my previous article in this series, "To Understand Trump's China Strategy, First Grasp the Truth of America's Economic Decline," I analyzed how Trump's second term aims to close China's growth lead by boosting U.S. economic growth. In another article, "Can the Key Fact China Cannot Avoid Achieve the Vision for 2035?" I also discussed this issue.

The empirical data in the previous article showed that, in practice, the only way for the U.S. to raise its potential medium- to long-term economic growth rate is to increase the proportion of fixed investment in U.S. GDP. Strictly speaking, it is necessary to increase the proportion of net fixed capital formation in U.S. GDP. Net fixed capital formation refers to the gross fixed capital formation (GFCF) added in a year minus the consumption of fixed capital. The economic fact shows that although theoretically other methods seem feasible to increase U.S. economic growth, they are not practically viable (the appendix explains the reasons).

However, as shown below, this economic fact is closely related to Trump's domestic political situation and geopolitical situation.

One, Can Trump's Attempt to Boost U.S. Economic Growth Achieve Its Goal?

The reason why increasing U.S. economic growth is closely related to domestic politics/geopolitics is that without broadening financing channels, it is impossible to increase the proportion of fixed investment in U.S. GDP. 【1】 Using Marxist or Western economic terminology, this necessarily requires an increase in the "total capital formation" or "total savings". It is worth noting that from an economic perspective, savings include not only household savings but also corporate savings and government savings (the latter is usually negative).

For example, in the United States, household savings account for only a small portion of total savings—just 3.7% of national income, while total savings account for 17.7% of national income. So far, the largest source of U.S. net savings/fixed capital formation has been corporate savings and government savings (when calculating net savings, the depreciation of U.S. corporate savings must be considered). Then the question arises: where does the increase in U.S. net fixed capital formation and thus the capital/savings required for GDP growth come from?

In analyzing this issue for the purpose of this article, there is no need to discuss whether savings create investment or investment creates savings (as in the Keynesian framework), or some other factors determining both. Just note that an increase in investment necessarily requires an equal increase in savings/capital formation. In other words, Trump can only increase the level of investment if he increases U.S. savings/capital formation.

To study the resulting geopolitical situation, it is necessary to point out that the sources of U.S. fixed capital formation are not only domestic but also foreign. That is, U.S. fixed capital formation can be funded through the following ways:

(1) Domestic capital/savings of the United States;

(2) Savings/capital created by other countries.

This fact determines the geopolitical impact of U.S. policy choices. Therefore, it is necessary to analyze these two sources in terms of their relative quantitative importance and also examine the political and geopolitical impacts of the policies made regarding them. Analyzing these facts can help us better understand Trump's policies.

1.1 Two Major Sources of U.S. Investment Funds

Starting with the largest source of investment, savings/capital formation. In the United States and each major economy, the vast majority of savings/capital formation comes from within the country, so we will first analyze this aspect.

Figure 1 presents the comparison of the proportion of net savings/capital formation to national income since the end of World War II. The trend is obvious. Until the mid-1960s, the proportion of net savings/capital formation to national income remained relatively high overall, with only slight declines—from 13.5% in 1950 to 13.1% in 1965. However, after the mid-1960s, the proportion of net savings/capital formation to national income began a prolonged and significant decline.

According to the latest data, by the third quarter of 2024, the proportion of net savings/fixed capital formation to U.S. national income was only 0.2%, approaching zero. That is, calculated net, by the third quarter of 2024, there was almost no increase in U.S. domestic capital—the vast majority of U.S. domestic capital formation totals were merely replacing fixed capital consumption (depreciation). From 1965 to 2024, the proportion of U.S. net fixed capital formation to GDP dropped by 12.9%, from 13.1% to 0.2%.

Figure 1

1.2 International Financing for the U.S.

However, to understand Trump's response, it is important to recognize that U.S. investments can be domestically financed as well as using the capital of other countries. To have a correct understanding of this, it is necessary to grasp a simple yet crucial relationship in economics. By definition, a country's capital inflows/outflows must correspond to its current account balance, inversely. That is, a current account deficit corresponds to net capital inflow for a country, while a current account surplus corresponds to net capital outflow. 【2】

Given this, Figure 2 presents a comparison of the proportion of the U.S. current account balance to national income since the end of World War II. It can be seen that until 1981, with few exceptions, the U.S. had a current account surplus every year. That is, up to 1981, the U.S. was always a net capital exporter. In contrast, after 1981, the U.S. was almost always in deficit, meaning foreign investment became the mainstream for domestic investment in the U.S.

For example, comparing the same period of domestic savings totals/capital formation, from 1965 to 2024, the proportion of the U.S. current account balance to national income changed from 0.7% to -3.8%. That is, the U.S. transitioned from being a net capital exporter (0.7% of national income) to a net capital importer (-3.8% of national income), adding up to 4.5% of national income. Therefore, utilizing foreign capital allowed the U.S. economy to avoid the consequences of too low domestic capital formation—it was enough to keep the U.S. annual growth rate slightly above 2%, preventing stagnation. Thus, the inflow of foreign capital meant that U.S. domestic investment could exceed its domestic capital formation/savings.

Figure 2

1.3 Foreign Capital Inflows Cannot Fully Compensate for the Decline in U.S. Domestic Capital

However, when considering the possibility of significantly boosting U.S. economic growth, comparing the data on the decline in domestic savings/capital formation with the data on capital inflows makes it clear that relying on foreign capital still cannot fully compensate for the decline in domestic capital formation/savings, nor can it significantly narrow the gap between the U.S. and China in terms of growth rates.

Specifically, from 1965 to 2024, the proportion of domestic savings/capital formation to national income in the U.S. fell by 12.9%, but during the same period, 4.5% of national income shifted from capital outflows to capital inflows, which was only enough to offset about one-third of this decline. Since the capital imported from abroad was insufficient to offset the decline in domestic capital formation/savings, there was a decrease in U.S. net fixed capital formation. As shown in Figure 3, the proportion of U.S. net fixed capital formation to GDP dropped from its post-war peak—11.3% in the first quarter of 1966—to 4.9% in the fourth quarter of 2024.

Figure 3

Given the extremely high correlation between the proportion of U.S. net fixed capital formation to GDP and GDP growth rate, the inevitable result was a gradual slowdown in U.S. GDP growth, declining from 4.4% in 1969 to 2.1% in 2024 (see Figure 4). This phenomenon of slowing U.S. economic growth is the most fundamental problem faced in the competition with China.

In 2006, the U.S. capital inflow accounted for 5.8% of national income, reaching its peak, and the U.S. became heavily dependent on foreign capital, which contributed to the international financial crisis in 2008.

Conversely, the severe impact of this crisis led to a recession in the U.S., forcing the U.S. to reduce its reliance on foreign capital—by 2013, the U.S. capital inflow accounted for 2.0% of national income. Since then, the U.S. capital inflow accounted for 2.0% of national income until 2017, when it dropped to 1.9% of national income, and then began to rise sharply again—according to the latest data, by the third quarter of 2024, it had reached 3.8%.

Therefore, over the past seven years, U.S. economic growth benefited from the use of capital created by other countries, but this scale was insufficient to offset the decline in U.S. domestic capital formation.

Figure 4

1.4 Failure of U.S. Manufacturing Backshoring Attempts

However, the U.S. now depends heavily on foreign capital in the long term, inevitably leading to adverse macroeconomic and political consequences. Since foreign capital inflows correspond to the U.S. current account deficit, and they are inversely related, net foreign capital inflows necessarily mean a current account deficit for the U.S. Moreover, so far, the largest component of the current account is tangible trade. Therefore, if the U.S. relies heavily on foreign capital, it will inevitably result in a huge trade deficit, meaning the U.S. imports a large amount of foreign products, which will inevitably put downward pressure on domestic industry and manufacturing production.

It is precisely for this reason that the attempt to bring back U.S. manufacturing production has completely failed. As shown in Figure 5, the U.S. manufacturing production index is now clearly lower than it was 17 years ago—the level in January 2025 was 8.7% lower than the peak in December 2007.

Figure 5

The political consequences of the decline in U.S. manufacturing output are also evident. It has expanded the "Rust Belt" in the U.S., meaning permanent elimination of jobs in the entire traditional manufacturing region of the U.S. As shown in Figure 6, since 2000, the number of U.S. manufacturing jobs has decreased by 26%, i.e., more than a quarter.

Trump introduced protective trade tariffs, one to reverse this thoroughly failed situation of bringing back manufacturing, two because the forces around him believed it was crucial for the U.S. economy, and three to attract the American working class politically, despite his policies having devastating effects on the American working class.

Then the question arises: how likely is Trump to reverse this situation (significantly boost U.S. economic growth through his tariff policies and steer U.S. politics back toward stability)?

Figure 6

1.5 Trump's Tariff Policy Works Counterintuitively

The aforementioned relationships clearly indicate that Trump's attempt to revitalize the U.S. economy through a tariff war runs counter to his intentions, lacks coherence, and will inevitably produce geopolitical impacts and domestic political side effects.

Some of the direct macroeconomic impacts of Trump's tariff policies are well known. For instance, tariffs will allow domestic producers of goods and services in the U.S. to raise prices while remaining competitive, which will also trigger inflation, thereby reducing the standard of living for the American public.

However, the ensuing chain reactions are less widely known. Under unchanged conditions, if the Federal Reserve decides that it is necessary to counter inflation by raising interest rates, this will put upward pressure on short-term interest rates. If investors believe they need higher nominal interest rates to compensate for higher inflation, this will also put upward pressure on long-term interest rates. Such rate hikes will slow down U.S. economic growth—of course, under unchanged conditions, this will alleviate inflationary pressures.

In other words, the negative effects of short-term inflation may be offset by slower economic growth. But slowing growth itself is obviously undesirable. Therefore, the combined effect of inflation, slower growth, and rising interest rates will ultimately be determined by overall economic conditions, but these are just overlapping effects of different negative impacts.

A more fundamental contradiction is that Trump's trade policies affect the most important factors determining U.S. growth. Trump's intention is to use tariffs to cut the U.S. trade deficit. However, as mentioned earlier, the vast majority of the U.S. current account deficit is due to the trade deficit—in the most recent year with complete data available, 2023, goods and services trade accounted for 87% of the U.S. current account deficit. Therefore, any significant success in cutting the U.S. trade deficit will greatly reduce the U.S. current account deficit.

However, since the current account deficit corresponds to capital inflows, cutting the current account deficit will reduce U.S. capital inflows. Unless U.S. domestic capital formation/savings increase equivalently or to a greater degree, cutting the U.S. trade deficit will reduce the funding for U.S. net fixed capital formation. And since there is an extremely high correlation between the proportion of net fixed capital formation to GDP and GDP growth rate, U.S. economic growth will also slow down.

In summary, regarding Trump's tariff policy:

1) Trump's goal is to cut the U.S. trade deficit, as trade is the most important component of the U.S. current account, which means cutting the U.S. current account deficit. But this means cutting U.S. capital inflows. Unless something else happens domestically to offset this, cutting the U.S. current account deficit will reduce the capital available for investment in the U.S., thereby slowing its economic growth. This will also exacerbate trade tensions between the U.S. and other countries as retaliation for U.S. tariff increases and countermeasures taken by other countries.

2) However, if the U.S. continues to rely on foreign capital to finance its investment, the U.S. can maintain its investment level under unchanged conditions. But its current account deficit will not decrease, and given that trade is the most important component of the current account deficit, Trump cannot actually achieve his goal of cutting the U.S. trade deficit.

1.6 Foreign Capital Inflows Are Insufficient to Offset the Decline in U.S. Domestic Savings

It is unclear which of the two scenarios described above regarding U.S. trade and current account deficits will occur or whether the U.S. economy's excessive dependence on foreign capital will remain largely unchanged.

However, from both an economic and domestic political perspective, there is a more fundamental issue. That is, from an economically plausible standpoint, can relying solely on foreign capital inflows and the corresponding changes in the U.S. current account balance be sufficient to drive significant recovery and accelerated growth in the U.S. economy? The answer is no, and this will have fundamental implications.

To understand the reasons, it is necessary to point out that according to the latest data, the U.S. current account deficit accounts for 3.8% of national income. In 2006, the U.S. current account deficit reached its historical peak at 5.8%, which was the cumulative effect of the continuous expansion of the U.S. current account deficit since the early 1990s. A proportion of 5.8% was so high that it destabilized the international financial system and was one of the key factors behind the international financial crisis that began fermenting in 2007 and erupted in 2008.

Even if the U.S. current account deficit could return to this peak level from its current level (considering the crisis caused the last time this level was reached, this possibility is extremely small), the proportion of capital inflows would only increase by 2%. That is, the proportion of U.S. capital inflows would rise from 3.8% of national income to 5.8%. To achieve this, it would necessarily require expanding the U.S. trade deficit, which would place enormous downward pressure on U.S. manufacturing production and employment—this is completely contrary to Trump's stated goals.

However, in terms of the actual outcome of such a situation, as indicated by the correlation shown in the article "To Understand Trump's China Strategy, First Grasp the Truth of America's Economic Decline," the U.S. needs to invest 3.5% of its GDP to achieve a 1% increase in GDP growth (see Figure 9 in that article). Therefore, if foreign capital inflows account for 2%, it would only increase U.S. GDP growth by 0.67%.

This would be helpful, but far from enough to narrow the gap between the U.S. and China's growth rates—calculated on a 10-year moving average, the U.S. GDP annual growth rate is 2.17%, so an increase of 0.67% would only rise to 2.84%, which is still far behind China's GDP growth rate in 2024—5.0%.

Therefore, purely from a quantitative perspective, the U.S. cannot rely on foreign capital to raise its capital investment levels to the extent needed to close the growth rate gap with China, but must primarily rely on domestic capital formation/savings.

Then the key factual question is, where do such resources come from for the U.S.? As shown below, this determines their impact on U.S. domestic politics and international geopolitics.

Two, How Does Trump Increase Economic Growth?

To understand the impact these economic processes have on domestic politics, it is necessary to point out that capital formation/savings and consumption necessarily add up to 100% of the domestic economy. Therefore, increasing the proportion of U.S. capital formation/savings to GDP necessarily reduces the proportion of U.S. consumption to GDP. The key question is, when studying the impact of this change, particularly its political impact, which forms of consumption should be reduced?

To analyze this, it is necessary to point out that in technical economic terminology, the meaning of consumption is broader than the everyday language meaning of "consumption," which focuses on household consumption, such as food, housing, entertainment, etc. However, from an economic perspective, consumption is simply any product or service that is consumed, rather than used as a production input. For example, military spending is a form of consumption because military spending and equipment are not used as production inputs.

If the proportion of U.S. capital formation/savings to GDP increases, it necessarily leads to a corresponding decrease in the proportion of consumption, and the differences between various forms of consumption will clearly have a significant impact on the standard of living in the U.S. If the proportion of expenditures on food, housing, entertainment, travel, vacations, etc., to GDP decreases, this means that the proportion of consumption maintaining the standard of living for the American public will also decrease. However, if the proportion of military spending to GDP decreases, even though the overall proportion of consumption decreases, it does not mean that the standard of living for the public will decline.

2.1 Trump Has Two Tricks to Boost U.S. Economic Growth

Once this analytical framework is dissected, it becomes clear what economic choices Trump faces domestically. Some reforms can significantly boost U.S. economic growth without lowering the proportion of consumption used to improve the standard of living. Once this is understood, it becomes clear that the U.S. has some policies that can be used to increase the resources for savings/capital formation without involving a reduction in the proportion of consumption that forms the basis of the U.S. standard of living. Specifically, in terms of the U.S. economy's various important sectors, these policies include:

First, military spending.

According to official U.S. data, U.S. military spending accounts for 3.7% of GDP, but the actual figure is much higher because a significant portion of it is not classified as military spending (for example, military pensions are recorded as non-military spending, but in reality they are part of military spending). A detailed study in 2022 found that while the official budget showed U.S. military spending at $766 billion in 2022, the actual figure was $153.7 billion. Even the official figure (3.7% of GDP) far exceeds NATO's target for military spending (2% of GDP).

Reducing U.S. military spending from 3.7% of GDP to NATO's target (2.0% of GDP) will release 1.7% of GDP for increased net fixed capital formation, without reducing the proportion of household consumption to U.S. GDP. As noted above, the correlation indicates that the U.S. needs to invest 3.5% of GDP to achieve a 1% increase in GDP. Therefore, a 1.7% increase in the proportion of U.S. net fixed capital formation to GDP is expected to increase U.S. GDP growth by nearly 0.5 percentage points annually.

The second important area is the highly inefficient private healthcare system in the U.S.

U.S. healthcare spending as a proportion of GDP is far higher than in other major developed economies. According to the latest internationally comparable data from the World Bank on life expectancy and healthcare spending, in 2021, U.S. healthcare spending accounted for 17.4% of GDP, compared to 12.9% in Germany, 12.4% in the UK, and 12.3% in France. However, U.S. life expectancy was 76.3 years, compared to 82.3 years in France, 80.8 years in Germany, and 80.7 years in the UK—meaning U.S. life expectancy was 6.0 years shorter than France's, 4.5 years shorter than Germany's, and 4.4 years shorter than the UK's. That is, U.S. healthcare spending as a proportion of GDP is far higher than in other developed economies, but life expectancy is much lower. This indicates that the U.S. healthcare system is highly inefficient!

For example, if the U.S. could reach the efficiency level of Germany, this would almost certainly mean replacing the U.S. private healthcare system with a public healthcare system, which would release funds equivalent to 4.5% of GDP, which could be used to increase net fixed capital formation, without reducing the proportion of household consumption to U.S. GDP. As mentioned above, the U.S. needs to invest 3.5% of GDP to achieve a 1% increase in GDP growth, meaning that a 4.5% increase in net fixed capital formation to GDP is expected to increase U.S. annual GDP growth by 1.3%.

If the U.S. both cuts military spending to NATO's set level and replaces the inefficient healthcare system, combining these measures (which together account for 6.2% of U.S. GDP) to net fixed capital formation, it is expected that U.S. GDP will increase by approximately 1.8%. Adding this to the U.S. GDP annual growth rate of 2.2% calculated on a 10-year moving average, the expected U.S. GDP annual growth rate will increase to 4.0%—this would make the U.S. growth rate very close to China's 5.0%.

Thus, it can be seen that from a purely economic perspective, there are no insurmountable obstacles to significantly increasing U.S. GDP growth without reducing the proportion of consumption related to the standard of living for Americans. In other words, the U.S. can indeed significantly increase its GDP growth rate through reform without reducing the proportion of consumption that forms the basis of the U.S. standard of living. Additionally, since there is a close correlation between household consumption growth and GDP growth, it is expected that U.S. living standards will significantly improve due to these policies.

2.2 Why Trump Will Not Implement Such Reforms?

Although such reforms in the U.S. are entirely feasible from an economic perspective, unfortunately they will not happen, at least not during Trump's presidency, because from a political perspective, these reforms require significant changes in overall policy.

1) Cutting military spending will require a less aggressive foreign policy and fewer war expenditures.

2) The U.S. is the only major developed economy with a private rather than a public healthcare system. To reform the U.S. healthcare system to make it as efficient as those in other developed economies, it will almost certainly require a shift to a public healthcare system—this means addressing the vested interests of powerful private healthcare enterprises in the U.S.

There is no indication that the Trump administration will attempt such reforms; on the contrary, all signs suggest the opposite.

2.2.1 Trump Cannot Cut Military Spending

The most direct geopolitical and political consequences of the current state of the U.S. economy are concentrated in military spending. Trump's stated goal is to maintain and possibly enhance U.S. military hegemony through the means described below. Within this framework, the absolute level of U.S. military spending is purely a tactical issue, provided that U.S. military hegemony is maintained or enhanced. Therefore, Trump could in principle consider cutting U.S. military spending, as analyzed above, this would help boost U.S. economic growth, but only if these cuts do not jeopardize the military advantage enjoyed by the U.S. This explains many of Trump's actions in foreign policy.

Firstly, regarding the Ukraine war and European issues. Most directly, the U.S. realizes that NATO is losing in the Ukraine war and is trying to improve relations with Russia—hoping to divide the relationship between China and Russia. But this strategic framework is based on the hope that West European countries will increase their military spending, allowing the U.S. to reduce its military presence in Europe and redeploy more military resources to counter China.

As U.S. Defense Secretary Hackett said in a major speech at the Ukraine Defense Contact Group meeting in Brussels on February 12, when discussing the U.S.'s new policy towards Ukraine: "The U.S. prioritizes deterring war in the Pacific region against China, recognizing the reality of resource scarcity and making resource trade-offs to ensure deterrence does not fail... When the U.S. shifts its focus to these threats, European allies must play a leading role on the frontlines. We can jointly create a division of labor to maximize our comparative advantages in Europe and the Pacific."

Hackett's comments on "deterring war" are utterly hypocritical—it is essentially about the U.S. expanding its military capabilities against China. But his comments show that the U.S. does not want to weaken NATO's strength in Europe, but only wants Europe to bear a greater military burden so that the U.S. can redeploy more military resources against China.

U.S. military spending in World War I, World War II, the Korean War, the Vietnam War, the Iraq War after 9/11, and the Afghanistan War, in 2024 dollars

Secondly, Trump vaguely mentioned that the U.S., China, and Russia would each cut their military spending by 50%. At first glance, this seems like a "peace-loving" move, but analyzing its actual impact reveals otherwise. In the 1970s, when the military power of the U.S. and the Soviet Union was roughly equal, proportional cuts to both sides' military spending were appropriate—for example, this is actually reflected in the Anti-Ballistic Missile Treaty, the First Strategic Arms Limitation Talks (SALT I), and the Intermediate-Range Nuclear Forces Treaty (INF). However, today, U.S. military spending far exceeds that of China or Russia. Therefore, proportional cuts to military spending among the U.S., China, and Russia would only consolidate U.S. dominance.

In fact, proportional cuts in military spending are likely to significantly enhance U.S. military superiority because the Trump administration has already approved extremely expensive new projects, such as building the "Iron Dome" missile defense system for the U.S. From a military perspective, this is actually an attempt to establish the U.S.'s "first-strike" nuclear strike capability, i.e., the ability to eliminate the opponent's nuclear forces in one go and effectively prevent the opponent from launching a fatal retaliatory strike.

One step in this direction is the U.S. unilaterally withdrawing from the INF Treaty and the ABM Treaty.

Since the simplest way to defeat the "Iron Dome" is to increase the number of missiles/nuclear warheads used to attack it, if Russia and China cut their nuclear weapons/missiles, the U.S. will have more confidence in the success of the "Iron Dome," increasing the temptation for the U.S. to launch a pre-emptive strike.

Therefore, even theoretically (not to mention more practical considerations), the only fair arms reduction proposal for the U.S. should be to roughly equalize military spending between the U.S., Russia, and China. But this is precisely what Trump has not proposed. Instead, he is using the world's longing for peace, the general desire to keep military spending to a minimum, to mask his proposals aimed at consolidating and even enhancing U.S. military dominance.

Of course, the level of China's military spending can only be decided by China itself, which will have sufficient information to make an accurate decision, not others. However, the true intent behind Trump's proposals can be understood from outside.

Since Trump will only cut military spending in a way that maintains or enhances U.S. military dominance, and other countries are unlikely to agree to mutually cut military spending in a way that maintains or enhances U.S. military dominance, in reality Trump will not cut U.S. military spending.

2.2.2 Budget Conflicts Over Healthcare Spending in the U.S.

Talking about the U.S. healthcare system, Trump spent a lot of time during his first term trying to overturn limited reforms in the Affordable Care Act (Obamacare) (but did not succeed). Therefore, there is no reason to believe, and there are no signs indicating, that Trump will implement any major healthcare reforms during his second term.

However, the economic policies Trump is currently pushing in Congress will spark a fight over U.S. healthcare spending levels. As The Washington Post pointed out in its analysis of the House of Representatives' first vote on this issue:

"The 217-to-215 vote opened the door to a fierce fight... The focus of the fight is which federal programs to cut to partly fund a major tax cut plan, whose biggest beneficiaries will be the wealthy Americans..."

"The resolution calls for cutting $2 trillion in spending... but does not specify which programs should be cut, although Republican leadership has targeted Medicaid and food assistance programs for the poor in the U.S. It also instructs an increase of about $30 billion for border enforcement and defense projects..."

"Republicans in swing districts say they will not support a plan that could lead to significant cuts to Medicaid and food stamps. The resolution instructs the energy and commerce committee, which oversees Medicaid and Medicare, to find at least $88 billion in cuts. While some Republicans deny they will cut programs for the poor, the amount they are calling to raise almost certainly requires some cuts to at least one of these plans..."

"Democrats believe that whatever legislative proposal the House Republicans ultimately present, the potential cuts to Medicaid will become a highly prominent political attack point, similar to the way Republicans ran their 2018 campaign on the promise to repeal the Affordable Care Act (Ob