Trump tax bill dealt major blow as several Medicaid provisions are axed

Yahoo

26-06-2025

WASHINGTON — Several contested proposals related to Medicaid were stripped from President Donald Trump's massive reconciliation bill, dealing a blow to Republicans as they search for ways to pay for more than $4.5 trillion in tax cuts.
The Senate parliamentarian issued the latest set of rulings Thursday morning, striking a number of provisions that would have cut government spending for the welfare program to offset the cost of extending Trump's 2017 tax cuts that are scheduled to expire at the end of this year. The nixed provisions send Republicans back to the drawing board to craft proposals that adhere to the strict rules of reconciliation — with just eight days before the party's self-imposed deadline of July 4.
One of the most controversial proposals removed from the bill is language seeking to crack down on state provider taxes, which are taxes placed by states on medical providers like hospitals and clinics that then boost reimbursement from the federal government. The proposed bill sought to reduce that tax from the current 6% down to 3.5%, raising concerns among lawmakers from states they say rely on that tax to provide money for health coverage.
The removal of that provision deals a major blow to Republicans as they estimated it would save billions of dollars to help pay for the tax cut extensions.
Utah Rep. Blake Moore responded to the ruling shortly after it was issued, telling CSPAN on Thursday morning 'it becomes a non-issue (if) it's taken off the table, but we'll have to see.'
'I would love to see the details on why that would be the case,' Moore said. The provider tax 'is primarily revenue-based, and that should pass the Byrd rule in the Senate. So I hope there isn't any type of, you know, politics being played here. It's a world that I'm not in much.'
That ruling could be good news for a handful of Senate Republicans who opposed the changes, citing concerns about spending cuts to rural hospitals and nursing homes. At least four Senate Republicans — Sens. Josh Hawley, R-Mo., Susan Collins, R-Maine, Lisa Murkowski, R-Alaska, and Jim Justice, R-W.V. — opposed that language, threatening the bill's final passage.
It's not yet clear how Republicans will move forward. Party leaders could attempt to amend their language to adhere to reconciliation rules, or they could decide to remove the provisions altogether.
However, the stripped provisions could throw a wrench in Republicans' plans to get the package finalized and sent to Trump's desk by the Fourth of July holiday. Senate leaders are pushing to pass their version of the bill as early as this weekend, sending it to the House next week for consideration.
But it could take several days to rewrite the Medicaid language, possibly punting the deadline later into the summer.
Through the budget reconciliation process, Republicans can circumvent Democratic opposition and prevent a filibuster to expedite the passage of certain legislation and go around the minority party by enacting key pieces of their agenda with a simple majority vote.
There are certain rules that dictate how often reconciliation can be used, and the procedure can only be utilized to advance budget-related legislation such as taxes, spending and the debt limit.
Once a budget reconciliation blueprint is finalized, it then only requires a simple majority in the House and Senate to pass.
The parliamentarian also removed portions of the bill seeking to remove undocumented citizens from Medicaid and Medicare eligibility — a major proposal pushed by Utah Sen. Mike Lee. The bill sought to withhold federal funding toward states that provided coverage to undocumented immigrants.
Language seeking to prohibit funding for Medicaid and Children's Health Insurance Program (CHIP) to go toward gender transition procedures was also removed from the bill.
The Senate parliamentarian is still reviewing several other controversial proposals that could make or break Republicans' tax package, including language seeking to defund Planned Parenthood by prohibiting the organization from receiving any federal Medicaid funds.