Category: Budget

After a record-breaking vote-a-rama lasting over 24 hours, the U.S. Senate has passed President Trump’s expansive tax and spending reconciliation package — a major step toward his goal of signing the legislation into law by July 4. The bill encompasses the majority of the President’s legislative agenda.

The final vote was 51–50, with Vice President JD Vance casting the tie-breaking vote. Republican Senators Susan Collins (ME), Thom Tillis (NC), and Rand Paul (KY) joined all Senate Democrats in opposing the measure. Senators Collins and Tillis cited the bill’s Medicaid cuts and their potential impact on rural hospitals as key reasons for their “no” votes. A proposed amendment from Collins to establish a rural hospital stabilization fund failed in a procedural vote Tuesday morning. Tillis recently announced his decision to retire at the end of his term after facing political fallout from President Trump over his earlier vote against the motion to proceed.

For much of the overnight session, the bill’s fate remained in doubt. Republican leadership engaged in extensive negotiations with undecided senators, both behind closed doors and on the Senate floor. Republican Senator Lisa Murkowski (AK), who had withheld support for much of the process, ultimately voted in favor after securing Alaska-specific carve-outs from certain provisions in the legislation.

The legislative battle now shifts to the House of Representatives, where Speaker Mike Johnson is expected to bring the bill to a vote as early as Wednesday. The initial version of the package narrowly passed the House, where Republicans hold only a slim majority. Several members have already expressed concern over changes made by the Senate.

The conservative wing of the House GOP — particularly the House Freedom Caucus — has objected to the bill’s suspension of the debt ceiling and what it views as insufficient spending reductions. The House GOP’s budget plan called for $2 trillion in spending reductions to match $4.5 trillion in tax cuts. The Senate bill cuts just over $1.5 trillion but spends the full amount on taxes.

Meanwhile, more moderate Republicans have raised alarms over the deep Medicaid cuts included in the Senate-passed version. Senate Republicans approved a $1 trillion cut to Medicaid, which is far harsher than the original House plan.

Members of the House have been called back to Washington from their July 4 recess to begin consideration of the revised legislation. While its final passage remains uncertain, Speaker Johnson and President Trump have demonstrated a strong ability to unify their caucus in the past.

The Office of Federal Relations will continue to monitor developments and provide updates as this process unfolds.

In yet another setback for Senate Republicans, the Senate Parliamentarian has ruled that several key Medicaid provisions in the GOP’s sweeping budget reconciliation bill violate the Byrd Rule, effectively stripping them from the legislation.

The Byrd Rule, a procedural safeguard named after the late Senator Robert Byrd, restricts what can be included in budget reconciliation bills. It prohibits provisions that are considered “extraneous” to the federal budget, meaning they must primarily affect government spending or revenue and not merely serve policy goals.

Among the provisions deemed to be in violation of the Byrd Rule are restrictions on pharmacy benefit managers and ACA subsidies for certain immigrants as well as, perhaps most importantly, limits on Medicaid provider taxes, which are state-imposed taxes on healthcare providers that are then used to draw down more federal Medicaid funding.

The Senate Finance Committee, which has jurisdiction over Medicaid, proposed lowering the provider tax cap to 3.5% of net patient revenue over the next 6 years in Medicaid-expansion states, and barring non-expansion states from raising provider taxes beyond their current levels.