Congressional budget battle over Medicaid cuts

After pushback and delay, Congress passed the budget blueprint to open the process for reconciliation legislation, setting the stage for fights about potential Medicaid cuts.

Reminder:

• The reconciliation process allows Republicans to implement much of President Trump’s agenda (e.g., tax cut extensions, border security, military spending, energy policy, etc.) without Democratic support. Reconciliation bills need only a simple majority in the Senate, so Republicans do not need Democrats to vote with them to get to the 60 votes otherwise needed to get around the filibuster.
• To unlock the process for drafting the bill, the House and Senate first have to pass identical budget blueprints that lay out how much spending and cuts the bill will have.

The details:

• Original House vote: The House first passed a budget plan in February, which required $1.5 trillion in cuts, including $880 billion by the House Energy and Commerce (E&C) Committee. That number would require cuts to Medicaid.
• Compromise Senate plan: The Senate then wrote a compromise plan. It kept the House committee cuts as they were but set different, lower cut thresholds for Senate committees. It required the Senate to find only $4 billion in reductions, a tiny fraction of the cuts outlined by the House. But it still included the $880 billion in E&C cuts.
• Senate vote: When Senate Majority Leader John Thune sought to bring the resolution to the floor, Republican senators initially balked. After airing their concerns with Thune, a group of holdouts eventually voted for the bill but warned that they would not be willing to approve final legislation that would ax Medicaid.
• Back to the House: The same situation then played out in the House in reverse. Conservatives demanding steep cuts initially refused to back the compromise version of the budget plan. Some of the holdouts said they only relented after being assured by Trump and party leaders that the final product would include vast cuts to federal entitlement programs, including Medicaid.

The main point: The bill only made it through the House because conservatives were promised that the Senate would join them in cutting $1.5 trillion in federal spending. But it only made it through the Senate because of guarantees that the bill would not include that level of cuts, particularly for Medicaid.

• It is not clear how these competing demands can be squared.

What’s coming: Congress is now in recess, but when they return next week, they will have to start writing the legislation and figure out how to navigate the disagreement over Medicaid.

Why it’s important: As we have outlined before, Medicaid is essential for providing substance use disorder care.

Read more: Republicans Clash Over Medicaid in Hunt to Pay for Trump’s Agenda; House GOP adopts budget framework, paving the way for Trump’s ‘big, beautiful bill’