- Ted, as we approach the end of the year, state legislators and leaders of different organizations are anxiously awaiting Governor Dan McKee's budget, which is due in January.

What we know is that this budget will look very different from recent years.

- Yes, there has been so much federal money, Michelle, flowing into Rhode Island since the pandemic, flowing into all states, really.

Most of that tied directly to the pandemic, relief money, the American Rescue Plan Act.

But then also you've had laws like President Biden's bipartisan infrastructure law, which also steered a lot of additional money into Rhode Island.

So all of that has meant the state has been running very large surpluses in most years.

There's been a lot of spending flexibility.

That money's pretty much gone now.

And so I think it's really gonna be a back-to-reality budget year.

- And state leaders have been warning the state will have to tighten its belt.

House Speaker Joe Shekarchi, governor Dan McKee had been echoing this message across the state.

Let's take a listen to what they've been saying.

- This will be a very challenging year in the general.

So lemme perhaps the most challenging, because I assure you there is no more federal money.

I got a call from my home city of Warwick.

Oops, Speaker, we made a mistake with our school bond funding, with $38 million short.

Can we have it?

I wish it was that easy.

This town of Coventry is $5 million short in their budget.

My good friends in Central Falls are in the process of restructuring some of the schools, looking for more money.

- Now we have to figure out a way to make sure that we address the structural deficit now, so that it becomes a number that we can manage.

- Ted, you've been reading through reports to get a handle on the state's finances.

Walk us through the numbers as they stand today.

- So first thing to remember, of course, is that the fiscal year for the state runs from July 1st to June 30th.

So the next budget will start next July, but that's the one we'll start talking about in January when the governor's budget bill goes in.

In a recent budget office reported suggested, Michelle, that there could be a deficit of $400 million in that budget that has to come in in January that the governor would need to close.

Now, since then, some numbers, some positive news has come in.

Tax revenue's up a little more than expected.

Spending's down a little, they're running a surplus it looks like in the current year.

So that should help a bit.

But it looks like the governor will still be facing a deficit in the neighborhood of very ballpark, I'd say like $250 million maybe.

- That's still a lot of money.

And like you mentioned, ultimately, it's up to Governor McKee to decide what stays and what goes.

- Yes, and there's concern certainly I think in the healthcare world, particularly right now, because medical spending is such a big part of the budget with the Medicaid program, about the potential for cuts or pare backs there.

But again, we really won't know until the governor puts that budget bill in and shows us the numbers.

- Sure, let's turn now to Washington DC, as Rhode Island's congressional delegation prepares for President-elect Donald Trump to take control of the White House.

One of the people closely watching the situation is US Senator Jack Reed, who we know is the chair of the Armed Services Committee.

Now, you and your colleague, Tim White over at Channel 12 recently spoke with Reed over on "Newsmakers" and he expressed concern about the initial cabinet picks that the President-elect has selected.

Let's take a listen to what Senator Reed had to say.

- President Trump is not trying to build a cabinet, he's trying to build a court that is subservient to him, and it will ignore the Constitution.

And that is a very dangerous trend.

And if you look at these choices, practically all of them, no real experience, or they are essentially yes men and yes women.

The problem here is that you're gonna have a group of people whose obligation is to Donald Trump and not the Constitution of the United States and the people of the United States.

- It's no surprise that a Democratic senator feels this way, but it's noteworthy, because you and I both know that Senator Reed chooses his words carefully.

- Yes, he's being pretty aggressive in his criticism here.

And what I'm curious about is what kind of influence Reed will have in a Republican controlled Washington come January.

I mean, while he won't be a chairman anymore, he'll still be the top Democrat on the Armed Services Committee, which has a history of bipartisanship.

He also ranks, Michelle, sixth in seniority in the entire Senate.

Only five senators more senior than Reed at this point.

And seniority is very important in the Senate in terms of your influence.

So I tend to think he'll still have some sway, but not nearly as much as he has recent years controlling that gavel.

- What about the rest of the delegation?

Where do they stand?

- Well, none of them I think will have as much influence as Reed might, because of again, his seniority.

But you know, Senator Whitehouse certainly is on some committees like judiciary that are more partisan.

I assume he'll be mixing it up with Republicans a lot during the Trump era.

Then for the two congressmen, Seth Magaziner and Gabe Amo, I mean they're still very junior.

They're gonna be in the minority party.

So junior members of the party without power, that's not a great place to be in terms of having sway.

But that said, the House is gonna be so evenly split, Michelle, that I think it could magnify the democratic lawmaker's rule.

- Great to see you.

Thanks so much, Ted.

- Good to be here.