The House Energy and Commerce Committee appears to have exceeded its goal of finding $880 billion in spending cuts over the next ten years. A new analysis from the Congressional Budget Office found that the budget reconciliation package, which includes cuts to Medicaid and environmental programs, will reduce the deficit by approximately $912 billion from 2025-2034.
How will the bill affect Medicaid?
The package would create new work, verification and eligibility requirements for Medicaid enrollees.
It would also prohibit federal funds from being used to provide health care for immigrants in the country unlawfully and reduce Medicaid expansion payments to states that provide coverage to unlawful immigrants by 10%.
Republicans contend that providing health care to unlawful immigrants creates budgetary pressures and endangers health care access for Americans.
“Just as Mr. Trump is working to end sanctuary cities, congressional Republicans will reduce federal aid to states that give welfare to illegal immigrants,” Rep. Brett Guthrie, R-Ky., wrote in an Op-Ed in the Wall Street Journal.
In addition to other changes to the way the federal government reimburses states and health care providers, it will be easier to remove people who are ineligible for coverage.
In total, the Congressional Budget Office estimates the Republicans’ health care proposals will save the government $715 billion over the next ten years, but it would also lead to 8.6 million people losing their health insurance during the same time.
Rep. Frank Pallone, D-N.J., described the projected health care cuts as “catastrophic”.
“This is not trimming fat from around the edges, it’s cutting to the bone. The overwhelming majority of the savings in this bill will come from taking health care away from millions of Americans,” Pallone said.
What other programs will the bill cut?
House Republicans are moving to cut funding for environmental programs that were created by Democrats under the Inflation Reduction Act of 2022 (IRA).
The IRA enacted loan programs, tax credits and other financial incentives for a transition to renewable energy.
Now Republicans want to rescind remaining funding for IRA energy programs, including:
Subsidies for electric vehicle manufacturing facilities
Loans to retool or repower energy infrastructure that is already shutdown
Loans to replace transmission lines around the country
Grants to cover the planning, modeling and analysis of offshore wind farms
Air quality monitoring and diesel emissions reduction
Guthrie, who is chairman of the Energy and Commerce Committee, said cutting those IRA programs would save $6.5 billion.
Republicans are refocusing on American petroleum by creating expedited permit programs for both drilling and pipeline infrastructure. Applicants would need to write the government a check for a minimum $10,000,000 to participate in the program. The bill would also appropriate $1.3 billion for the purchase of petroleum products to be stored in the strategic reserve.
What is the future of the bill?
The Energy and Commerce Committee is scheduled to meet Tuesday, May 13, to review the bill and make changes.
House leadership wants to approve all budget bills, including the renewal of President Donald Trump’s 2017 tax cuts, by Memorial Day. Republicans want the president to sign the “one big beautiful bill” by the Fourth of July.
It’s not clear if they have enough support to stay on that timeline. Leadership needs conservative fiscal hawks to approve of the spending reductions. If the savings are deemed insufficient, they’ll oppose the measure. They also need to include a state and local tax deduction to win over blue-state Republicans. An exact amount for the write-off is still being negotiated.
contributed to this report.
