House GOP Proposes Medicaid Changes and Tax Cuts in Major Budget Bill
House Republicans are advancing a comprehensive legislative package that includes significant components of President Trump's tax, immigration, and energy agendas. Central to the bill is a set of Medicaid reforms aimed at generating substantial budget savings. These proposals include work requirements for certain Medicaid recipients, new copayments, verification of income and residency, and freezing state-imposed taxes on Medicaid providers. The Congressional Budget Office projects that these changes would reduce federal spending by $715 billion over ten years, but at the cost of approximately 8.6 million people losing Medicaid coverage during that period.
The Medicaid provisions have sparked internal debate within the Republican Party, with some members criticizing cuts to healthcare for low-income populations. Despite these divisions, major Medicaid reforms that would significantly shift costs to states were omitted to maintain party cohesion.
The tax component of the bill seeks to permanently extend the 2017 tax cuts, which are set to expire at the end of the current year. The extension would represent a $5 trillion cost over the next decade according to the Congressional Budget Office. The proposal also includes increasing the standard tax deduction for individuals and married couples for four years and expanding the child tax credit, maintaining bipartisan support on these points. Additionally, the bill introduces "MAGA accounts," government-backed savings accounts designed to help young people invest in education or businesses, permitting contributions up to $5,000 annually.
Key tax provisions are still under negotiation, particularly the cap on state and local tax deductions. Republicans representing high-tax districts are advocating for an increased cap, while fiscal conservatives resist due to deficit concerns. The final resolution on this issue remains uncertain.
Leadership aims to pass the bill in the House before the Memorial Day recess, navigating a slim margin that allows for minimal defections. Congressional conservatives continue to press for deeper spending cuts, but the deadline for completing the legislation aligns with mid-July, when federal revenue is expected to be exhausted. The bill also proposes increasing the federal borrowing limit for five years to mitigate financial risks.
The legislative push reflects complex negotiations balancing fiscal priorities, healthcare policy, and tax reform within the Republican caucus. Its progress will be closely watched by insurers, healthcare providers, and taxpayers due to its potential impact on coverage, state budgets, and the broader economic environment.