Republicans Race to Rescue Trump-Backed Tax Plan ‘big, beautiful bill’
The loss of a major Medicaid cut puts Republicans in a bind as they try to hold their fragile coalition together.
Senate Republicans are in a rush to revive President Trump’s "big, beautiful bill," which came to a halt on Thursday after Parliamentarian Elizabeth MacDonough dismissed one of its most significant cost-reduction measures.
The chamber’s referee determined that the Senate’s suggested limit on health care provider taxes breached the Byrd Rule, which dictates what legislation can be passed with a simple majority and circumvent a filibuster under budget reconciliation guidelines. This provision would result in a reduction of hundreds of billions of dollars in federal Medicaid expenditures.
Senate Majority Leader John Thune (R-S.D.) informed reporters that his leadership team has "contingency plans" to ensure the bill continues to progress, despite the possibility that this crucial element may be removed from the legislation.
"We have contingency plans, plan B, plan C," he stated as he entered a Republican lunch meeting.
The loss of the Senate’s proposal to significantly reduce federal Medicaid payments implies that Republican leaders will need to devise hundreds of billions in new savings to finance the cost of making several corporate tax reductions permanent.
The unexpected ruling, which was revealed on Thursday, has Republican senators urgently seeking a method to pass the legislation by the July 4 deadline established by Trump.
"We have no idea what’s going to happen here; we need to work on some form of a solution," remarked Sen. Josh Hawley (R-Mo.). "Hopefully, their solution will involve safeguarding rural hospitals."
Hawley was among several GOP senators, including Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Jerry Moran (R-Kan.), and Thom Tillis (R-N.C.), who voiced significant concerns that capping health care provider taxes could lead to the bankruptcy of numerous rural hospitals nationwide.
Senate Democrats estimate that the parliamentarian rejected around $250 billion in spending cuts from the Republican bill, presenting GOP leaders with a substantial challenge in identifying new methods to offset the costs of corporate tax reductions.
Offsetting the expenses associated with corporate tax breaks beyond the 10-year budget horizon is a vital component of the strategy employed by Thune and Senate Finance Committee Chairman Mike Crapo (R-Idaho), as they aim to establish these breaks as permanent.
"I believe the financial ramifications are quite substantial," remarked a Senate Republican who wished to remain anonymous while discussing the parliamentarian's influence on the reconciliation package.
When inquired about the duration of the delay caused by the unexpected ruling on the core of Trump’s legislative agenda, Crapo humorously responded: "Somewhere between now and next March — I’m just kidding."
Sen. John Kennedy (R-La.) expressed that the parliamentarian’s decision against a significant spending cut in the bill poses a considerable challenge for Senate conservatives, unless GOP leaders can devise an alternative method to incorporate additional deficit-reduction strategies into the legislation.
"I do not foresee us voting on the motion to proceed tomorrow. I believe my colleagues who perceive the bill more as a spending reduction initiative rather than an extension of tax cuts will likely be very vocal about their discontent, as this significantly diminishes savings," he stated.
"We are uncertain if we can preserve the Medicaid segment," he added.
He raised concerns about whether Republican legislators would remain in town during the July 4 recess if there is no definitive timeline for voting on the bill.
"I am willing to stay the entire week, but practically speaking, many individuals are campaigning for elections, and numerous people have prior commitments. One of John’s challenges will be... ensuring people remain here," he commented regarding Thune. "People often say, ‘Well, when you’re ready, give me a call. I’m heading home.’"
On Tuesday, Trump urged lawmakers to remain in Washington and forgo the upcoming July 4 recess to finalize the bill.
"To my friends in the Senate, lock yourselves in a room if necessary, do not go home, and COMPLETE THE DEAL THIS WEEK," he posted on social media.
Sen. Ron Johnson (R-Wis.), a member of the Finance Committee, referred to the parliamentarian’s ruling as a significant concern.
Johnson urges GOP leaders to revisit their strategies and devise alternative spending reductions.
He suggests preserving Social Security, Medicare, and Medicaid while concentrating on other mandatory expenditures that he claims have inflated the annual federal budget by over $400 billion each year.
Crapo mentioned that his team would attempt to "resolve the issues" to keep the legislation progressing.
"This is a standard procedure. Now that we understand the guidance, we will respond accordingly," he stated.
Some Republicans believe that the wording in the provision aimed at capping healthcare provider taxes, which states utilize to enhance their federal Medicaid funding allocations, can be modified to satisfy the parliamentarian's assessment.
"We will need to continue our efforts. It’s a deception; it’s a deception that states are employing to avoid contributing their share for Medicaid," remarked Sen. Rick Scott (R-Fla.). "I am committed to finalizing a deal."
Senate Budget Committee Chair Lindsey Graham (R-S.C.) declared on Thursday that he is collaborating with Thune and Crapo "to identify a viable path forward concerning the provider tax ruling from the parliamentarian."
"The provider tax represents one of the most significant deceptions I have encountered in Washington, and I am optimistic that we can discover a compliant way forward," he expressed.
Hawley, who has criticized the Senate GOP's initiative to severely limit states' utilization of healthcare provider taxes, suggested that his peers should consider the less restrictive Medicaid reforms that the House passed last month.
He described the House's provisions as "superior."
"The rural hospitals would appreciate a few minor adjustments to that," he noted.
He mentioned that Trump proposed in a recent discussion that Senate negotiators revert to the Medicaid language approved by the House.
Hawley stated that Trump informed him on Wednesday that he does not wish for the bill to become overly focused on reducing Medicaid.
"I believe he desires the task to be completed, but he insists on its quality. He is not in favor of this being a bill that reduces Medicaid funding. He explicitly communicated to me that this is a tax reduction bill, not one that cuts Medicaid. I sense his fatigue regarding the ongoing discussions about Medicaid cuts, which I share," stated Hawley. "This is due to the excessive number of Medicaid reductions included in this bill."