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U.S. House Republicans push through massive tax and spending bill slashing Medicaid

The U.S. Capitol building in Washington, D.C., is pictured on Wednesday, May 7, 2025. (Photo by Jennifer Shutt/States Newsroom)

The U.S. Capitol building in Washington, D.C., is pictured on Wednesday, May 7, 2025. (Photo by Jennifer Shutt/States Newsroom)

This report has been updated.

WASHINGTON — The U.S. House early Thursday approved the “big, beautiful bill” that Republican leaders spent months negotiating with centrists and far-right members of the party — two distinct factions that hold vastly different policy goals — over intense opposition from Democrats.

The 215-214 vote ships the package to the Senate, where GOP lawmakers are expected to rewrite much of it, before sending it back across the Capitol for final approval, a process likely to stretch through the summer.

President Donald Trump, who said he backed the House version, would then need to sign the legislation, which under the complicated process being used by Republicans can pass with just a majority vote in the GOP-controlled Senate.

Trump called on the Senate to pass the legislation as quickly as possible, writing in a social media post that “(t)here is no time to waste” and that the bill is “arguably the most significant piece of Legislation that will ever be signed in the History of our Country!”

Speaker Mike Johnson said minutes before the vote that he expects lawmakers to give the measure final approval before the Fourth of July.

“Now, look, we’re accomplishing a big thing here today, but we know this isn’t the end of the road just yet,” Johnson, R-La., said. “We’ve been working closely with Leader (John) Thune and our Senate colleagues, the Senate Republicans, to get this done and delivered to the president’s desk by our Independence Day. That’s July 4. Today proves that we can do that, and we will do that.”

House Democratic Leader Hakeem Jeffries, D-N.Y., argued against the legislation, saying it “undermines reproductive freedom, undermines the progress that we have made in combating the climate crisis, undermines gun safety, undermines the rule of law and the independence of the federal judiciary. It even undermines the ability of hard-working and law-abiding immigrant families to provide remittances to their loved ones, who may just happen to live abroad.”

Jeffries raised concerns with how the proposals in the bill would impact the economy and the federal government’s financial stability.

“Costs aren’t going down. They’re going up. Inflation is out of control. Insurance rates remain stubbornly high,” Jeffries said. “Our Moody’s rating, our credit rating, has been downgraded, and you’ve got people losing confidence in this economy. Republicans are crashing this economy in real time and driving us toward a recession.”

Ohio’s Warren Davidson and Kentucky’s Thomas Massie were the only Republicans to vote against passing the bill, which members debated throughout the night prior to the vote just after daylight in the nation’s capital. All Democrats, who dubbed it “one big ugly bill,” were opposed. Maryland GOP Rep. Andy Harris, chairman of the Freedom Caucus, voted “present.”

Massie spoke against the bill overnight, calling it “a debt bomb ticking.”

“I’d love to stand here and tell the American people: We can cut your taxes and we can increase spending, and everything’s going to be just fine. But I can’t do that because I’m here to deliver a dose of reality,” Massie said. “This bill dramatically increases deficits in the near term, but promises our government will be fiscally responsible five years from now. Where have we heard that before? How do you bind a future Congress to these promises?”

White House press secretary Karoline Leavitt said during a briefing later in the day that Trump wants Davidson and Massie to face primary challenges next year during the midterm elections.

“I believe he does,” Leavitt said. “And I don’t think he likes to see grandstanders in Congress.” 

In the works for weeks

The 1,116-page package combines 11 bills that GOP lawmakers debated and reported out of committee during the last several weeks.

The legislation would:

  • Extend the 2017 tax law, including tax cuts for businesses and individuals;
  • Bolster spending on border security and defense by hundreds of billions of dollars;
  • Rework energy permitting;
  • Restructure higher education aid such as student loans and Pell Grants;
  • Shift some of the cost of the Supplemental Nutrition Assistance Program food aid program for low-income Americans to state governments; and
  • Overhaul Medicaid, the nation’s program for health care for low-income people and some people with disabilities.

The bill would make deep cuts to Medicaid spending, reducing the program by $625 billion over 10 years under the latest estimate by the Congressional Budget Office.

The budget measure would also raise the debt limit by $4 trillion.

A new Congressional Budget Office analysis released late Tuesday showed the package tilted toward the wealthy, projecting it would decrease resources for low-income families over the next decade while increasing resources for top earners.

Republicans hold especially thin majorities in the House and Senate, meaning that nearly every GOP lawmaker — ranging from centrists who barely won their general elections to far-right members who are more at risk of losing a primary challenge — needed to support the bill.

Balancing the demands of hundreds of lawmakers led to nearly constant talks during the last few days as Johnson struggled to secure the votes to pass the bill before his Memorial Day deadline.

Any deal Johnson made with far-right members of the party risked alienating centrist GOP lawmakers and vice versa.

An agreement finally came together Wednesday evening when GOP leaders released a 42-page amendment that made changes to various sections of the package, including the state and local tax deduction, or SALT, and Medicaid work requirements and nixed the potential sale of some public lands.

Tax cuts

House debate on the package fell largely along party lines, with Democrats contending it would benefit the wealthy at the expense of lower-income Americans, including millions who would lose access to Medicaid.

Republicans argued the legislation is necessary to avoid a tax hike at the end of the year, when the 2017 GOP law expires, and to curb government spending in the years ahead.

Ways and Means Chairman Jason Smith, R-Mo., said the tax section of the package would halt a tax increase for many that would have taken place after the vast majority of the provisions in that law expire at the end of this year.

“Working families, farmers and small businesses win with this bill,” Smith said. “We expand and make permanent the small business deduction and increase the child tax credit, the standard deduction and the death tax exemption.”

The legislation would increase the tax rate for colleges and universities with substantial endowments, which would match the corporate tax rate, he said.

Massachusetts Democratic Rep. Richard Neal, ranking member on that tax-writing committee, said the legislation would lead the United States to “borrow $4 trillion and with interest payments over the next 10 years, $5 trillion, to justify a tax cut for the billionaire class.”

Neal said that the wealthy would see a greater benefit from the GOP tax provisions than working-class Americans.

“If you made a million dollars last year, you’re going to get $81,000 of tax relief. If you made less than $50,000 Guess what? Not quite so lucky,” Neal said. “But you know what? $1 a day goes a long way, because that’s where the numbers land.”

Neal said Democrats would have worked with Republicans to extend the 2017 tax cuts if the GOP had capped them for those making less than $400,000 a year, with people making more than that going back to the higher rate. 

Child tax credit

The child tax credit will increase to $2,500, up from the $2,000 enacted under the 2017 tax law. The refundability portion of the credit, or the amount parents could receive in a refund check after paying their tax liability, will remain capped but will increase with inflation by $100 annually. As of now, the amount a parent could receive back per child stands at $1,700.

While Republicans hailed the increase as a win for families, critics say it continues to leave out the poorest families as the refund amount is dependent on how much a parent earns. The credit phases in at 15 cents per income dollar, one child at a time.

“The Republican bill will leave out 17 million American children who are in families that don’t earn enough to receive the full child tax credit,” Rep. Suzan DelBene of Washington said Wednesday in the House Committee on Rules. Her amendment to make the tax credit fully refundable was rejected.

On the House floor Thursday morning, DelBene criticized the bill as a “big, broken promise.”

SALT

Republicans from high-tax blue states declared victory on the increase in the SALT cap, or the amount of state and local taxes that can be deducted from federal taxable income. After long, drawn-out disagreement, Republicans representing districts in California, New Jersey and New York secured a bump to $40,000, up from the $10,000 cap enacted under Trump’s 2017 tax law.

However, the cap comes with an income limit of $500,000, after which it phases down. Both the $40,000 cap and the $500,000 income threshold will increase annually at 1% until hitting a ceiling of $44,000 and $552,000.

Rep. Mike Lawler of New York said during debate that he “would never support a tax bill that did not adequately lift the cap on SALT.”

“This bill does that. It increases the cap on SALT by 300%,” Lawler said. “And I would remind my Democratic colleagues, when they had full control in Washington, they lifted the cap on SALT by exactly $0, zilch, zip, nada.”

Medicaid work requirements 

Energy and Commerce Chairman Brett Guthrie, R-Ky., said his panel’s bill would ensure Medicaid coverage continued for low-income families, individuals who are disabled and seniors through new work requirements and other changes.

“This bill protects coverage for those individuals by ensuring ineligible recipients do not cut the line in front of our most vulnerable Americans,” Guthrie said. “The decision by left-leaning state governments to spend taxpayer dollars on people who are ineligible for the program is indefensible. Medicaid should not cover illegal immigrants, deceased or duplicative beneficiaries, or able-bodied adults without dependents who choose not to work.”

The policy change would require those who rely on the state-federal health program, and who are between the ages of 19 and 65, to work, participate in community service, or attend an educational program at least 80 hours a month.

The language has numerous exceptions, including for pregnant people, parents of dependent children, people who have complex medical conditions, tribal community members, those in the foster care system, people who were in foster care who are below the age of 26 and individuals released from incarceration in the last 90 days, among others.

New Jersey Democratic Rep. Frank Pallone, ranking member on the committee that oversees major health care programs, said the Republican bill would not only cut funding for Medicaid, but also for Medicare, the program relied on by seniors and some younger people with disabilities.

“Republicans are stripping health care away from people by putting all sorts of burdensome and time-consuming road blocks in the way of people just trying to get by,” Pallone said. “The vast majority of people on Medicaid are already working. This is not about work. It’s about burying people in so much paperwork that they fall behind and lose their health coverage, and if someone loses their health coverage through Medicaid, this GOP tax scam also bans them from getting coverage through the ACA marketplace.”

While the GOP bill doesn’t directly address Medicare, he said, a federal budget law, known as the Pay-As-You-Go Act, would force spending cuts called sequestration to that health program.

“The Medicare cuts will lead to reduced access to care for seniors, longer wait times for appointments, and increased costs,” Pallone said.

States to share in food aid costs

House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., pressed for support for his piece of the legislation, saying changes to the Supplemental Nutrition Assistance Program, or SNAP, are needed.

“SNAP is the only state-administered welfare program that does not have a cost-share component, and while the federal government funds 100% of the benefit, states are tasked with operating it,” Thompson said. “The only problem: They aren’t operating it well.”

He also cheered several of the package’s tax provisions, saying they would benefit farmers.

“The one big, beautiful bill makes permanent and expands the Trump tax cuts. It also prevents the death tax from hitting over 2 million family farms,” Thompson said. “It locks in the small business deduction, helping 98% of American farms stay afloat.”

Minnesota Democratic Rep. Angie Craig, ranking member on the panel, wrote in a statement that the proposed changes would “make America hungrier, poorer and sicker.”

“At a time when grocery prices are going up and retirement accounts are going down, we must protect the basic needs programs that help people afford food and health care,” Craig wrote. “As a mother and someone who needed food assistance at periods in my own childhood, I condemn this attempt to snatch food off our children’s plates to fund tax breaks for large corporations.”

Border security, air traffic control, EV fees

House Transportation and Infrastructure Chairman Sam Graves, R-Mo., said his piece of the package would combine “critical investments in border security, national defense and modernization of America’s air traffic control system, while eliminating wasteful spending and other deficit reduction measures.”

“Specifically, this bill addresses long overdue needs in the United States Coast Guard, which for over two decades has received less than half of the capital investment necessary to effectively carry out its critical missions,” Graves said.

The transportation section of the package, he said, includes $21 billion for the Coast Guard and $12.5 billion to modernize the air traffic control systems while establishing a $250 annual fee for electric vehicles and a $100 annual fee for hybrid vehicles that would go toward the Highway Trust Fund. That account has traditionally been funded through a gas tax. 

Washington Democratic Rep. Rick Larsen, ranking member on the transportation panel, said he wanted “to continue historic funding for transportation, infrastructure, and stronger and healthier communities.”

“Unfortunately, this reconciliation package leaves very little room for those investments,”  Larsen said.

“This bill causes immediate harm by yanking money from locally selected projects that our constituents in Republican and Democratic districts alike are counting on,” he added. “And for what? To help pay for the tax cuts for the richest Americans and largest and largest corporations.”

Student loan overhaul, medical research

House Education and Workforce Committee ranking member Bobby Scott, D-Va., urged opposition to what he called the “big, bad billionaires bill,” saying it would lead to a massive reshaping of higher education aid.

“The bill not only can increase the deficit, it has 4 million students who will lose their Pell Grants, 18 million children could potentially lose their free school lunch, 13.7 million people are set to lose their health care and everybody loses when the National Institutes of Health research is cut,” Scott said.

Natural Resources Committee Chairman Bruce Westerman, R-Ark., said his portion of the legislation would “generate over $20 billion in savings and new revenue for the federal government, primarily by direct royalty and lease fees from the sale of oil, gas, timber and mine resources, while curbing wasteful spending.”

“Our title reinstates onshore and offshore oil and gas lease sales, holds annual geothermal lease sales and ensures a fair process for critical mineral development nationwide,” Westerman said. “We’ve also directed the Forest Service and the Bureau of Land Management to utilize long-term timber sale contracts.”

The Trump administration released a Statement of Administration Policy on Wednesday urging GOP lawmakers to approve the legislation, when it still appeared several members of the party might delay or even block the bill in the House. 

“The One Big Beautiful Bill Act reflects the shared priorities of both Congress and the Administration,” the SAP states. “Therefore, the House of Representatives should immediately pass this bill to show the American people that they are serious about ‘promises made, promises kept.’

“President Trump is committed to keeping his promises, and failure to pass this bill would be the ultimate betrayal.”

Kennedy Center slated for huge funding increase while local arts slashed under Trump plans

The John F. Kennedy Center for the Performing Arts on the banks of the Potomac River in Washington, D.C. The center hosts more than 2,000 performances a year, including theater, contemporary dance, ballet, vocal music, chamber music, hip hop, comedy, international arts and jazz. It is also the home to the National Symphony Orchestra and Washington National Opera. (Photo courtesy Kennedy Center)

The John F. Kennedy Center for the Performing Arts on the banks of the Potomac River in Washington, D.C. The center hosts more than 2,000 performances a year, including theater, contemporary dance, ballet, vocal music, chamber music, hip hop, comedy, international arts and jazz. It is also the home to the National Symphony Orchestra and Washington National Opera. (Photo courtesy Kennedy Center)

WASHINGTON — A Democratic lawmaker is asking why House Republicans approved nearly six times the requested funding for the John F. Kennedy Center for the Performing Arts as President Donald Trump cancels federal grants for arts organizations across the United States.

Rep. Chellie Pingree of Maine, the ranking member of the subcommittee that oversees funding for the Kennedy Center, requested a detailed accounting of the $256.6 million for the center included in the Republican-led budget reconciliation package.

The Kennedy Center, a renowned venue in Washington, D.C., had originally requested just $45.73 million for fiscal year 2025. Trump in February took over chairmanship of the center’s board, leading to some artists canceling their performances.

ABC News reported Tuesday that Trump will headline a fundraiser for the center next month.

In a letter Tuesday to Kennedy Center President Richard Grenell, Pingree asked for a breakdown of how the organization plans to spend over $241.7 million on capital repairs projects, $7.7 million on operations and maintenance, and a further $7.2 million on administrative expenses.

The center had only planned on spending $157 million on repairs projects through 2027 as part of a comprehensive building plan, according to its 2025 budget request.

“I am committed to the Kennedy Center having the resources necessary to carry out its mission now and for many years to come, and I appreciate President Trump’s shared interest in the Center’s future,” wrote Pingree, who co-chairs the bipartisan Congressional Arts Caucus.

“However, as this Administration seeks to eliminate vital cultural agencies that serve communities across the nation, we must ensure that funds appropriated by Congress are truly benefitting the artists and audiences that make the Kennedy Center great,” Pingree wrote.

Pingree slammed the Trump administration’s late Friday notice that grant funding from the National Endowment for Arts would be withdrawn from organizations across the country. Trump’s budget request to Congress Friday recommended slashing the NEA completely.

Pingree issued a statement Saturday morning saying her office had already begun hearing from Maine arts organizations who received grant termination emails. “These organizations, like countless others, had already made programming decisions for the upcoming season and were counting on these funds to pay artists and workers,” Pingree said.

‘This project is essential’

A White House official told States Newsroom Wednesday that Trump had worked with Congress to arrive at the Kennedy Center funding figure.

“This project is essential to advancing President Trump’s vision of restoring greatness to our Nation’s capital. Halting Anti-American propaganda is critical to protecting our children and fostering patriotism,” according to the official.

Separately, an emailed statement attributed to White House spokesperson Anna Kelly said that “President Trump cares deeply about American arts and culture, which is why he is revitalizing historic institutions like the Kennedy Center to their former greatness.”

The White House did not immediately respond to follow-up questions about the termination of other arts funding.

The Kennedy Center did not respond to States Newsroom’s requests for comment about how the funds will be used and whether Grenell had received Pingree’s request.

A House Republican document outlining the party’s funding goals for 2024 shows the GOP-led House Committee on Appropriations had planned $44.9 million for the Kennedy Center that year, noting the amount was $454,000 below 2023 funding levels and $3.1 million below former President Joe Biden’s budget request.

Wisconsin joins lawsuit to block Trump administration cuts to HHS

By: Erik Gunn

Wisconsin has joined a federal lawsuit to block cuts at the U.S. Department of Health and Human Services. | The Hubert H. Humphrey Building, the headquarters of the U.S. Department of Health and Human Services in Washington, D.C., as seen on Nov. 23, 2023. (Photo by Jane Norman/States Newsroom)

Wisconsin has joined 18 states and the District of Columbia in a lawsuit to block cuts and consolidations at the federal Department of Health and Human Services (HHS) that are part of the Trump administration’s objective to dismantle the department.

In Wisconsin, federal actions at HHS have cut off funding to address lead poisoning in Milwaukee schools, monitor and reduce maternal death and discourage young people from using tobacco, Kaul’s office said in announcing the lawsuit.

The lawsuit describes wholesale firings and department closings, many carried out under the auspices of “DOGE” — the Trump administration operation headed by Elon Musk that has gone into numerous government agencies, cutting staff and canceling funding. “DOGE” stands for “Department of Government Efficiency,” but it is not an official federal department.

The office of Gov. Tony Evers said Monday that in Wisconsin, those reductions are halting testing and oversight for bird flu; disrupting Head Start early education and child care programs; ending a program to offset high utility bills; and defunding substance abuse and mental health assistance programs.

“These devastating decisions will jeopardize the health and safety of Wisconsinites and our communities, all so Republicans can help pay for tax cuts for millionaires and billionaires,” Evers said in a statement, adding that they were part of a plan to “undermine the constitutional checks and balances in our system that help ensure no one has the sole power to make decisions like this unchecked.”

Attorney General Josh Kaul said that a “dangerous mix of conspiracy theories and the extreme ideology reflected by DOGE are causing a staggering amount of damage to the extraordinarily important work of the U.S. Department of Health and Human Services, resulting in increased and unnecessary risk to people’s health and wellbeing.”

The federal actions were carried out under a directive issued March 27, the lawsuit says. It charges that through those actions, “the administration is seeking to dismantle HHS and its agencies, first by firing their staff and then by fully eliminating the funding” to a series of HHS programs.

“The terminations and reorganizations happened quickly, but the consequences are severe, complicated, and potentially irreversible,” the lawsuit states. “Plaintiff States are already suffering consequences of these terminations and reorganizations.”

The lawsuit was filed in federal court in Rhode Island. It charges those actions are illegal for blocking spending already appropriated by Congress.

“Congress created HHS and has invested enormous sums into it every year without interruption, and the congressional mandates remain in place today,” the lawsuit charges. “Much of that investment was lost in a day through the massive firings of HHS’s leaders and staff. More will be lost if nothing is done.”

The lawsuit asserts that the March 27 directive violates the U.S. Constitution. It asks the court to declare the directive unlawful, to vacate it, and to block the administration from carrying it out.

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A demographic slump for Wisconsin, a national economy tainted with uncertainty

By: Erik Gunn

An engineer works at a cargo port storage yard. Tariffs imposed by President Donald Trump have generated uncertainty about the economy for many businesses and consumers, according to economic forecasters. (Photo by Vithun Khamsong/Getty Images)

Over a buffet lunch Wednesday, a roomful of bankers got a mixed picture of the national economy in the short term. For Wisconsin, the longer term outlook appears more certain, although there may be little comfort from that.

Dale Knapp, chief economist for Forward Analytics, speaks to a Wisconsin Bankers Association luncheon on Wednesday, April 30, 2025. (Photo by Erik Gunn/Wisconsin Examiner)

Speaking at an economic forecast luncheon hosted by the Wisconsin Bankers Association and the news outlet WisBusiness, part of WisPolitcs.com, Dale Knapp, director of research at Forward Analytics, reviewed the persistent demographic slump that has put Wisconsin on a troubling trajectory for the coming decades.

That trajectory has been evident already for some 20 years, Knapp said, and it centers on the population bulge from baby boomers — people born between 1946 and 1964. That generation was 65% more numerous than the group born in the previous 19-year period, he said. And the subsequent generations have been about 20% smaller in number or even less.

The baby boom produced an explosion of demand for everything from toys to homes to schools and universities, Knapp observed. Now the last of that generation is passing into retirement, and with smaller populations in the generations that follow there are “worker shortages all across the state,” Knapp said.

A Help Wanted sign in Madison, Wisconsin. (Photo by Erik Gunn/Wisconsin Examiner)

Between 2020 and 2040, the working age population, ages 18 to 64, is projected to fall by 15% on average in all but six Wisconsin counties, Knapp said. Automation may pick up the slack in some industries, including manufacturing and possibly fast food service, he suggested.

Immigration is another remedy, Knapp said — but also “a challenge given what’s going on in the White House now.”

“We need to fix the border problem to a degree,” Knapp said. “If you do that, then maybe you can get the two parties in Washington together and say, ‘OK, we need to fix legal immigration by expanding it.'”

Knapp’s other proffered solution is to invest funds to offer families $16,000 to move to Wisconsin from out of state. With 3,000 families a year, the money could be repaid with the added income and sales tax revenues, “and we could fund it forever,” he said.

National economic uncertainty

Outlining the current state of the nation’s pocketbook and its near-term forecast, economist Andrea Sorensen of US Bank in Minneapolis said that the economy “is actually doing probably better than most people think.”

That’s despite the uncertainty that has ballooned since President Donald Trump took office in January, she said. That uncertainty also looms over the horizon, however.

The nation’s Gross Domestic Product (GDP) — the broadest measure of the overall economy — has been growing by more than 2% over the last couple of years through the end of 2024.

US Bank economist Andrea Sorensen speaks at a Wisconsin Bankers Association luncheon Wednesday, April 30, 2025. (Photo by Erik Gunn/Wisconsin Examiner)

Data issued Wednesday morning showed GDP shrank 0.3% in the first quarter. Sorensen said that was for an unusual reason, however.

U.S. businesses stocked up on goods from overseas to get ahead of the tariffs Trump imposed after taking office, she said. She attributed the slight first-quarter dip to those imports, because their value is subtracted from GDP.

The GDP estimate released Wednesday is the first of three that will be produced for the quarter, and Sorensen said her economic team believes the next two estimates will be better.

She views other indicators as relatively favorable.

The national labor market remains strong. Month-to-month employment growth has cooled some since the hiring spikes that followed the economic crash from the COVID-19 pandemic.  Still, “we still consider it to be quite healthy,” she said.

“People who have jobs have money to spend,” Sorensen said. “So as long as the labor market is holding up, we think the economy could be OK.”

Consumer spending also remains strong, she said, even though surveys show dramatic declines in both consumer and business confidence.

“We know it means people are not happy and they don’t have high hopes,” Sorensen said. “But if we’re talking recession, that sort of depressed sentiment needs to translate into actual economic activity. And so far, it hasn’t. And we’re not actually sure if it will.”

Tariffs are a wild card

The Trump administration’s tariff policies, however, remain a major wild card.

A broad 10% tax on imports that took effect April 5 remains in place with a few exceptions. Tariffs of up to 50% on about 60 countries are on a 90-day pause. An active tariff remains on goods from China — initially 125% and more recently raised to 145%.

Overall that’s netted out to a U.S. effective tariff rate — the net tariff on all imports from other countries — between 25% and 30%. That’s 10 times the effective tariff rate of 2.5% a year ago.

“This hasn’t happened in over 100 years,” Sorensen said. “The economy is just structurally very different, and we can try to make forecasts and comparisons —  and we do all day every day —  but we don’t know. There is just so much unknown what this will do.”

For that reason, economic uncertainty is “sky high,” she continued. “I don’t think anyone really knows what’s going on.”

Businesses “are kind of paralyzed,” Sorensen said. “How can you make a business investment decision if you have no idea what tariffs are going to be tomorrow, next week, next year?”

Some larger employers have already begun announcing plans to reshore work in the U.S. But Sorensen said in response to one audience member’s question that isn’t an option for many smaller employers.

A company that sources products overseas might gain a temporary advantage by returning production to the U.S., she said.

“They can’t risk making the wrong choice,” however, Sorensen said. “What we’re hearing is they don’t trust that that tariff will remain in place. So, they can’t make the investment decisions to bring production back to the U.S. because they might want to undo it again as soon as policy changes.”

In addition, “our supply chains are so intertwined that everything has some input that’s imported,” she said.

Tariffs will also squeeze low- and middle-income households, where spending takes a larger share of their earnings — “households that were already struggling,” Sorensen said.

Migration presents another pressure point. Policies to reduce immigration and deport immigrants will hurt some states and some sectors of the economy more than others, she said.

Yet an additional unknown is how the escalating trade conflicts with the rest of the world will affect services — where the U.S. has a trade surplus.

“President Trump has never mentioned that, because he probably doesn’t want us to know that, right? It makes trade look a little more fair, but that’s not the story he wants,” Sorensen said.

So far, other countries haven’t targeted U.S. services in retaliation for the tariffs it has imposed.

Nevertheless, “if countries really want to get us economically, they would go after services,” Sorensen said.

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State joins lawsuit to block Trump administration cancellation of AmeriCorps

By: Erik Gunn

Participants in Western Dairyland Economic Opportunity Council's Fresh Start program build a house, learning construction skills in the process. Program participants enroll in AmeriCorps and are paid an hourly wage for their work. (Photo courtesy of Western Dairyland EOC Inc.)

A coalition of 25 states, including Wisconsin, sued the Trump administration Tuesday to block the cancellation of AmeriCorps programs across the country.

The cancellation has upended plans at more than two dozen organizations in Wisconsin that have engaged AmeriCorps members in community service work, and stranded scores of participants in the midst of one-year stints in the program.

“I was completely blindsided,” Parker Kuehni told the Wisconsin Examiner on Tuesday. The University of Wisconsin-Madison graduate with a degree in global health was in his second year with AmeriCorps, working at a Madison free health clinic and preparing to start medical school in June when he learned Monday morning that the program was canceled.

Created by Congress in 1993 as the Corporation for National and Community Service, its official name, AmeriCorps has deployed community service workers across the country in the decades since. AmeriCorps members are usually recent college graduates who join the program for a year or two. They teach in schools, assist with disaster relief and take on a host of other roles. 

Wisconsin has 25 AmeriCorps programs that operate at more than 300 locations across the state, according to the office of Gov. Tony Evers. In Wisconsin, AmeriCorps operates through Serve Wisconsin, which administers its Wisconsin contracts and is housed in the Department of Administration.

On April 16, AmeriCorps placed about 75% of its employees on administrative leave with pay, the New York Times reported.

At 6:20 p.m. on Friday, April 25, Jeanne Duffy, the Serve Wisconsin executive director, received an email message that AmeriCorps grants and their recipients in Wisconsin were being terminated immediately “because it has been determined that the award no longer effectuates agency priorities.”

The form letter instructed recipients to notify all organizations and agencies with AmeriCorps-related projects. “You must immediately cease all award activities. This is a final agency action and is not administratively appealable,” the message said.

Lawsuit: Cancellation ‘usurps Congress’s power of the purse’

The lawsuit filed Tuesday in U.S. District Court in Maryland charges the Trump administration’s cancellation of the program “flouts Congress’s creation of AmeriCorps and assignment of agency duties; usurps Congress’s power of the purse and thereby violates the Constitution’s separation of powers; and arbitrarily and capriciously — without any reasoned analysis — vitiates the agency’s ability to function consistent with its statutory mission and purpose.”

The suit charges that the program’s abrupt end also violates federal law, which states AmeriCorps can make “significant changes to program requirements, service delivery or policy only through public notice and comment rulemaking.”

“The attempt to dismantle AmeriCorps is part of a pattern from the Trump administration of disrespect toward those who serve others,” Attorney General Josh Kaul said in a statement. “That approach is not just shameful — it’s misguided. AmeriCorps volunteers and projects help strengthen communities. AmeriCorps should be thanked for its work, not abruptly dismantled.”

Evers’ office telegraphed Wisconsin’s plan to join the lawsuit late Tuesday morning.

“Once again, the Trump Administration is trying to cut federal funding that Congress already approved and Wisconsin is counting on to help kids, families, and communities across our state — all so they can pay for tax cuts for millionaires and billionaires,” Evers said in a statement. “These latest reckless Trump and Musk cuts will hurt Wisconsin’s kids who are homeless or who need tutors for math and reading, folks who are working to overcome addiction and substance use, stop work on conservation projects, as well as all of the dedicated public servants whose livelihoods are depending on this work.”

Tutoring programs, health care clinics

AmeriCorps’ cancellation affected organizations and agencies all across the state.

In Madison, the United Way of Dane County enlisted 27 AmeriCorps members in two tutoring programs — one in math for high school students and the other in reading and literacy for elementary school children.

AmeriCorps members were placed in schools to help identify students who would benefit from tutoring, United Way officials said. They also screened and conducted background checks for more than 175 community volunteer tutors as well as serving as tutors themselves. More than 1,000 children have received tutoring in the two programs this year.

“And these kids are able to accelerate their academic success, which puts them on track for [higher] graduation rates,” said United Way CEO Renee Moe. “So, this is a really huge loss for us.”

AmeriCorps members were “really key to having successful volunteers support students in literacy,” said Emily Greene, director of Schools of Hope, the elementary program.

In the high school program, Achievement Connections, members have supported and trained other high school students as peer tutors. That helps those students “be engaged in their school in a way that they otherwise wouldn’t be and also gain some skills,” said Karl Johnson, director of Achievement Connections.

“We find that those relationships . . . are some of our strongest when it’s students helping each other out, and our [AmeriCorps] members are a pretty key part of facilitating that,” Johnson said.

The Wisconsin Association of Free and Charitable Clinics has deployed 30 AmeriCorps members throughout Wisconsin this year.

Some assist clinics, local health departments or the state Department of Health Services in administrative tasks, writing grants, collecting and analyzing data and related work, said Domonique Coffee, the association’s AmeriCorps program manager. Others staff clinics in a public health role, taking a patient’s blood pressure or other vital signs, teaching patients about managing their diabetes or hypertension or providing other direct care, she said.

The program allowed “free and charitable clinics to increase their services and capacity for services . . . to those who are underinsured or uninsured,” Coffee said.

It has also helped prepare the AmeriCorps members as future health care providers — “the future physicians and public health leaders of our next generation,” she added.

Fostering skills for careers and life

Parker Kuehni had graduated with a degree in global public health two years ago and was preparing to go to medical school. But he knew he first wanted to get more experience in directly working with patients.

He volunteered as a barbershop health screener for the Perry Family Free Clinic, which serves uninsured, low-income Madison residents. Through the clinic he connected with AmeriCorps and then shifted to helping with patient coordination, communication and scheduling, discussing care plans with patients and managing referrals to specialists.

The experience “built my empathy for people,” he said. The experiences he had “will contribute to me being an overall better future physician.”

While the typical AmeriCorps participant is a college graduate, the Western Dairyland Economic Opportunity Council in Eau Claire took a different approach with the program.

Since the late 1990s Western Dairyland has operated Fresh Start, an education, skills and career program for young adults ages 18 to 25. Participants often have a sparse job history and might not have completed high school.

The program engages up to 15 participants in a year-long house-building project. “We provide them with life skills and job skills and technical education, allowing them to then leave the program and either go on to school or attain full-time employment,” said Dale Karls, Western Dairyland’s communications coordinator.

The participants themselves become AmeriCorps members and earn an hourly wage on the job. Some 600 young people have gone through the program over the last three decades, building 45 homes, Karls said.

All the organizations the Wisconsin Examiner contacted Tuesday said the news of AmeriCorps’ cancellation came too recently  for them to know what they will do if the program isn’t restored.

Coffee said the Wisconsin Free and Charitable Clinics Association is trying to support its AmeriCorps members, “helping them find their footing.”

At United Way of Dane County, “We’ve spoken to our school district partners,” said Moe, the agency’s CEO. “We have reaffirmed with them that tutoring continues to be an important strategy to help with academic success. And so right now we’re trying to be creative around how to best keep really effective tutoring programs going.”

“We’re hoping that the funding will be reinstated,” said Karls of Western Dairyland. In the meantime, he added, “We have a half-constructed house in Strum, Wisconsin. We have to find a way to finish that.”

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