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News and updates

Byrd Bath Strikes Medicaid Proposals

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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.

According to the Congressional Budget Office, this proposal would save the government hundreds of billions of dollars over the next 10 years. Hospitals around the country, however, warned that this could devastate rural and underserved hospitals that rely heavily on Medicaid funding. The potential impacts of Medicaid cuts were a point of contention within the Senate GOP, with members such as Josh Hawley (R-MO) and Susan Collins (R-ME) voicing concerns over the cuts.
Republicans will now have to work to rewrite these provisions to be Byrd Rule compliant if they wish to keep them in the bill. While they do have the option to overrule the Parliamentarian, this move is controversial, and Majority Leader John Thune has said that it is not on the table.
With the self-imposed July 4th deadline for sending the “Big, Beautiful Bill” to President Trump’s desk looming, Senate Republicans will be scrambling over the weekend to make crucial decisions on the future of the Medicaid portion of this bill. If it does manage to pass the Senate, its chances of success are still wary in the House, where many members are unhappy with Senate changes.
The Federal Relations Office will keep you updated with changes as the process unfolds.

GOP Education Plan Hits a Byrd Rule Snag

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Senate Republicans were dealt a major blow in their proposed plans to overhaul higher education this week. Two important provisions contained in the Senate Health, Education, Labor and Pensions’ reconciliation package have been deemed to violate the Senate’s Byrd Rule.
The Senate Parliamentarian — the nonpartisan official tasked with interpreting and issuing rulings on Senate rules — has ruled that the Workforce Pell and consolidated loan repayment provisions of the bill are in violation of the Byrd Rule.
The Byrd rule, officially known as Section 313 of the Congressional Budget Act, requires that reconciliation legislation comply with certain parameters, including that the provisions must directly relate to the budget, can’t contain unrelated policy priorities, and can’t grow the deficit beyond the budget window provided in the bill.
The Parliamentarian’s ruling means that, unlike the simple majority needed for passage of a reconciliation bill, these provisions would need to clear a 60-vote threshold if challenged on the Senate floor — which they almost certainly would be.
The proposed Senate loan repayment changes attempt to end the multiple existing income-driven student loan repayment plans. In their place, both current and future borrowers would be transitioned into one of two consolidated plans: a standard repayment plan, and a single income-driven repayment plan.
The Parliamentarian’s ruling determined that repealing these repayment plans for current borrowers was in violation of the Byrd rule. Senate lawmakers and committee staff will need to rewrite elements of the bill in order to comply. The proposed changes were expected to net over $200 billion in savings, which Republicans may now seek to find through other avenues.
While current borrowers will now likely be permitted to maintain their current repayment plan, the Parliamentarian’s ruling did not apply to future borrowers, meaning that borrowers who take out new student loans on or after July 1, 2026, may only have access to two repayment plans.  One would be a Standard plan, with monthly payments stretched out over a term ranging from 10 to 25 years. The other would be a new income-driven repayment plan called the Repayment Assistance Plan, or RAP. RAP would use a repayment formula that differs in many ways from current IDR options and would in some cases have higher monthly payments.
The situation remains fluid. The Office of Federal Relations will continue to update with the status of the bill and changes.

NIH Pauses Grant Cancellations

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In an internal NIH memo circulated on Tuesday, Michelle Bulls, who helps oversee the agency’s external funding arm, directed agency staff not to cancel any additional research projects. Bulls instructed staff that, “effective immediately, please do not terminate any additional grant projects.” The memo marks a retreat by the agency, which has slashed funding for medical research and terminated hundreds of awards since the beginning of the Trump administration.

The memo comes in the wake of two important court decisions regarding cuts to federal research funding. A federal judge in Massachusetts ruled last week that some of the administration’s grant cancellations were “void and illegal,” and accused the government of racial discrimination and prejudice against LGBTQ individuals. Additionally, a federal judge in California temporarily blocked the canceling of grants to the University of California on Monday, ruling that the grant terminations violated the First Amendment. The administration is considering appeals to both decisions.

In the meantime, N.I.H. officials said they were continuing to categorize medical research grants based on whether they included topics disfavored by the Trump administration, even if they were not terminating those grants.

 

 

Senate Tax Package Update

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Senate Finance Committee Chair Mike Crapo (R-Idaho) confirmed Tuesday that his panel will not formally review the GOP tax package recently released by the committee, opting instead to send it directly to the Senate floor as part of the GOP’s broader legislative effort. While Crapo maintains that this decision is unrelated to opposition within the committee, speculation suggests that Senator Ron Johnson (R-Wisconsin), a key swing vote and vocal critic, may have influenced the move.

The Senate package introduces an endowment tax hike for private institutions, though it is more modest than the House version. Additionally, it eliminates the proposed logo and licensing income tax included in the House’s provision.

The committee’s proposal also contains controversial Medicaid and debt ceiling provisions. One key Medicaid-related measure would gradually reduce most states’ ability to impose provider taxes on hospitals and other health care providers, capping the rate at 3.5% by 2031—down from the current 6% limit. However, this restriction would only apply to the 40 states and the District of Columbia that have expanded Medicaid for low-income adults.

For states that have not expanded Medicaid—primarily GOP-led—new provider tax rate increases would be restricted but would not face as drastic an impact. The Senate package also introduces stricter Medicaid work requirements, mandating that parents with children aged 15 and older engage in work, volunteer activities, school, or job training for at least 80 hours a month to maintain benefits. The House version had exempted parents of dependent children from this requirement.

Regarding the debt ceiling, the Senate committee proposes a $5 trillion increase, surpassing the House’s $4 trillion adjustment. This provision is designed to extend the timeframe for President Trump’s policy implementation, reducing the necessity for negotiations with Democrats over the cap.

If the committee’s proposal withstands scrutiny under the Senate Byrd Rule process, it will be incorporated into the “Big, Beautiful Bill” package, requiring only a simple majority to pass. GOP leaders aim to send the bill to President Trump by July 4, though some lawmakers have voiced concerns about the ambitious timeline.