April 10, 2025 - Modern Healthcare
Michael McAuliff
Congress paved the way for deep cuts in healthcare spending as part of an effort to extend expiring tax cuts on Thursday.
The House voted 216-214 to adopt the final version of the fiscal 2026 budget resolution, with GOP Reps. Thomas Massie (Ky.) and Victoria Spartz (Ind.) joining the Democratic minority in opposition. This followed a Senate vote to approve the budget on Monday and a House vote in February on the lower chamber's first draft of the measure.
House Speaker Mike Johnson (R-La.) seeks to deliver a major tax cuts bill to President Donald Trump next month. Republicans aim to extend policies from the signature accomplishment from Trump's first term, the Tax Cut And Jobs Act of 2017, that are due to sunset at the end of the year, restore some Trump tax cuts that already expired and create new tax cuts.
Those tax cuts would reduce federal revenues by an estimated $5.3 trillion over 10 years, and the GOP wants to increase spending on defense, border security and energy by $500 billion. To partially offset the effect on the budget deficit, the Republican-led Congress is looking for significant spending reductions, including up to $880 billion in Medicaid cuts.
"Congratulations to the House on the passage of a Bill that sets the stage for one of the Greatest and Most Important Signings in the History of our Country," Trump wrote on his social media platform, Truth Social, after the vote. "Among many other things, it will be the Largest Tax and Regulation Cuts ever even contemplated. MAKE AMERICA GREAT AGAIN!"
Agreeing on a budget resolution was the first step in a fast-track legislative process known as budget reconciliation that the Republican majority is using because Democrats are firmly against Trump's tax and spending cuts agenda.
Tax and spending bills considered under budget reconciliation rules are immune to Senate filibusters, which require 60 votes to end, and can pass both chambers on simple majority votes. The GOP has a 220-213 majority in the House and a 53-47 edge over Democrats and allied independents in the Senate.
The final budget resolution attempts to ease tensions between House and Senate Republicans over the spending cuts that nearly derailed the process on Wednesday, when Johnson was forced to cancel a vote because the budget lacked the votes to pass. Overnight, congressional Republican leaders managed to assure members that the budget reconciliation would guarantee large spending cuts.
"We made tremendous progress over the last two days in making certain that whatever we do on reconciliation, we don't increase this country's budget deficit," said Rep. Dr. Andy Harris (Md.), who chairs the conservative House Freedom Caucus. "Both chambers are going to get to work on drafting the final reconciliation bill. The confines of that reconciliation bill are now, we're pretty certain, that is not going to increase the budget deficit."
Under this measure, House committees must find at least $1.5 trillion in spending cuts while Senate committees have to meet a much smaller $4 billion minimum. But Rep. Chip Roy (R-Texas), who was poised to vote against the budget Wednesday, said most conservatives are satisfied by promises from Johnson, Senate Majority Leader John Thune (R-S.D.) and the White House that the House's spending cuts would prevail.
The budget instructs the House Energy and Commerce Committee, which has jurisdiction over Medicaid and Medicare, to slash spending by $880 billion. But the Senate Finance Committee, which oversees the same programs, is not subject to that order. When lawmakers in the two chambers draft the actual reconciliation bills, Congress will have to reconcile the differences.
When it comes to healthcare, Medicaid is by far the most likely target for spending cuts. According to the Congressional Budget Office, the Energy and Commerce Committee only has access to just $135 billion in spending it can eliminate if Medicare and Medicaid are excluded — and Trump has ruled out Medicare cuts.
House Minority Leader Hakeem Jeffries (D-N.Y.) blasted the budget resolution on Wednesday.
"Republicans are setting in motion the largest Medicaid cut in American history. That's going to hurt people all across this country," Jeffries said on the House floor. "Healthcare will be taken away from children, pregnant women, everyday Americans with disabilities, older Americans, people in nursing homes, people who are receiving long-term care."
The budget resolution eked by in both the House and Senate, with some Republicans concerned about the consequences of healthcare cuts and others clamoring for deeper reductions in taxes and federal expenditures. The next phase, which begins when Congress returns from a two-week recess that commenced after the budget vote, will be even harder.
Johnson faces a cohort of House Republicans such as Massie and Spartz who think the tax and spending cuts don't go far enough, which made passing the budget resolution uncertain. Their consternation may persist despite Johnson winning over enough reluctant Republicans to complete the budget Thursday.
"If you were trying to hasten financial collapse of our country and bribe voters to go along with it, the strategy wouldn’t look much different than what Congress is doing today," Massie wrote on the social media platform X on Thursday. "The big beautiful bill cuts taxes while keeping spending on an increasingly unsustainable trajectory."
Thune has the opposite problem. Although Sen. Dr. Rand Paul (R-Ky.) opposed the budget for the same reasons as Massie and Spartz, three other Senate Republicans have expressed concern about big Medicaid cuts.
Sen. Susan Collins (Maine) was the only other Republican to vote against the budget on Monday, but she, Sen. Lisa Murkowski (R-Alaska) and Sen. Josh Hawley (R-Mo.) joined a failed Democratic effort to remove the instructions that the Energy and Commerce Committee reduce federal spending by $880 billion.
Still, Senate GOP leaders may have an easier time than their House peers, at least with its first iteration of a budget reconciliation bill, because the budget resolution affords the upper chamber greater flexibility.
The Senate portion of the budget assumes that cutting taxes will have barely any effect on the budget deficit by departing from long-standing legislative accounting practices, which is why its committees only have to cut $4 billion in spending to the House's $1.5 trillion. In essence, the Senate will act as though the tax cuts were never going to expire, and therefore extending them does not come at a cost.
"I appreciate efforts of my colleagues, but the instructions we voted on today are still setting us up for the largest deficit increase in the history of our Republic, & opening up a 'pandora’s box' by changing accounting rules to hide it." Spartz wrote on X. "In good conscience, I couldn’t vote YES."
Eventually, the House and Senate will need to pass the exact same budget reconciliation bill to send to the White House.