House Republicans pass budget plan requiring Medicaid cuts

House Republicans approved their budget framework by just one vote.

The details:

• Moderate, swing-state Republicans had been undecided due to potential Medicaid cuts, but voted in favor after leaders stressed that the budget itself did not contain Medicaid cuts (those would come later in the reconciliation bill to follow).
• Other holdouts included fiscal hawks who raised objections about inadequate spending cuts.

Why it’s important: The plan would require the Energy and Commerce Committee to cut $880 billion in spending, which would require major cuts to Medicaid.

• If Republicans want to avoid major cuts to Medicaid, the largest pot of available money is in Medicare. But Republicans have promised not to cut Medicare.
• Even if the committee cut to $0 everything it oversees that is not health care, it would still be more than $600 billion short.
• There are some creative options that would allow the committee to find budget savings without having to cut spending (changes that would raise money, reduce tax credits, etc., rather than direct budget cuts). But some of these options might not be allowed under special budget process rules and would still be far below the needed $880 billion.
• The main point: Mathematically, the committee would need to make major cuts to either Medicare, Medicaid, or both, and Medicaid has been held up as the clear target.

But: House Speaker Mike Johnson ruled out per-capita caps and changes to the federal match rate as options for cutting Medicaid. Both are options that could produce some of the most significant potential savings, but would shift significant costs to states and lead to benefit cuts.

• Republicans leaders are saying cuts will go after fraud, waste, and abuse, but it is unclear how such efforts would get them to the needed $880 billion in cuts. Work requirements and eliminating provider taxes are also under consideration. (See more on these options in our previous summary.)

Next steps: The Senate had already passed a competing plan, and now Republicans in the two chambers must reconcile the significant differences between the two blueprints.

• The Senate has indicated they will not accept the House framework as is. Among several disagreements, the Senate is looking to avoid the deep cuts to Medicaid that the House is leaning on.

Take action: If you haven’t already, you can still send a letter to your members of Congress urging them to protect Medicaid through our action alert.

Source: House approves ‘big, beautiful bill’ budget after wild whip effort (Politico); What Can House Republicans Cut Instead of Medicaid? Not Much. (New York Times)