- House Republicans unveiled a budget draft that potentially cuts critical Medicaid funding.
- The Budget Committee draft instructs the Energy and Commerce Committee to cut at least $880 billion.
- House and Senate GOP leaders aren’t on the same page when it comes to advancing Trump’s agenda.
Medicaid may be on the chopping block as the Trump administration prepares its budget blueprint.
The House Budget Committee’s budget draft included about $1.5 trillion in spending cuts and allowed for $4.5 trillion in tax cuts. This is below the $2 trillion in spending cuts some conservative leaders were targeting.
The blueprint draft called for at least $880 billion in spending cuts from the House Energy and Commerce Committee over the next decade. This would likely mean large Medicaid cuts, potentially leading many Americans to lose their benefits. A Ways and Means Committee document outlining reconciliation options reveals over $2 trillion in potential Medicaid cuts, though some could overlap.
President Donald Trump has said Social Security and Medicare, which are the largest federal government programs, wouldn’t be cut. Elon Musk has also accused “federal entitlements” such as Social Security of fraud.
The draft directed the Committee on Agriculture to reduce the deficit by $230 billion, which would mean cutting nutritional programs like the Supplemental Nutrition Assistance Program.
The most recent Medicaid enrollment data from October 2024 revealed over 72 million people were enrolled in Medicaid, while 7.25 million were enrolled in Children’s Health Insurance Programs. Medicaid provides healthcare and long-term services coverage for lower-income Americans and is financed by both the federal government and states. In some states, over 30% of the population is covered by Medicaid. According to the Centers for Medicare & Medicaid Services, Medicaid spending in 2023 was nearly $872 billion.
Some GOP leaders have proposed reducing Federal Medical Assistance Percentages, the amount the federal government pays to states based on factors such as a state’s per-capita income. Others have proposed Medicaid per-capita caps, which an early House Budget Committee proposal said could save up to $900 billion. This shift would lead states to either cut back on Medicaid services or identify other methods for funding potentially billions in losses.
Figures such as Robert F. Kennedy Jr. have argued that Medicaid is ineffective, and some question whether it has improved people’s health. Critics of the program have also said people relying on Medicaid could get insurance from other sources, such as their workplace. However, Medicaid expansions have been shown to improve care access, reduce mortality rates, and spark economic growth.
Senate Budget Committee Chairman Lindsey Graham of South Carolina in recent days had already moved ahead with his border security, military, and energy package, as Republicans in the upper chamber had been waiting for their House counterparts to offer their budget proposal.
Graham is aiming to pass a second budget resolution extending the 2017 tax cuts later this year.
Senate Republicans can pass a budget reconciliation bill with a simple majority, or 51 votes, as they wouldn’t have to meet the normal 60-vote filibuster threshold. The party currently holds a 53-47 majority in the upper chamber.
House GOP leaders see their budget framework as one that could pave the way for passing a reconciliation bill through Congress with the priorities of Trump and top conservatives in mind. Republicans have a razor-thin 218-215 majority in the House, so every vote will be critical, and they’re looking to pass one bill with Trump’s signature policy desires.
Speaker Mike Johnson on Tuesday told reporters that Graham’s plan was a “nonstarter.”
“We all are trying to get to the same achievable objectives,” the Louisiana Republican said. “And there’s just, you know, different ideas on how to get there.”
GOP leaders have recently pushed for Medicaid cuts, leading to debates over how much to cut services many Americans rely on.
Other major points from the House blueprint included increasing the debt limit by $4 trillion, reductions in education totaling $330 billion, and allocating up to $300 billion in additional border and defense spending.
The Senate’s plan calls for $150 billion in additional defense spending and a $175 billion boost for border security.
American Dollar Exchange Rate