February 26, 2025

Last night the House passed its Budget Resolution that (at base) gives instructions to 11 House committees – all with purview over various areas of the federal budget.  The Resolution is a blueprint for each of the committees, and requires them to put together budget language that hits the financial targets laid out for them in the Budget Resolution.  

The House Energy and Commerce Committee is the place where cuts to Medicaid, Social Security, and Medicare would be debated and lined out in legislation that will ultimately be forwarded to House leadership.  The lists we’ve been sharing – the ‘menu’ of options that are under consideration by House Republicans to find savings of approximately $880B over 10 years, can only be accomplished by cutting entitlement programs.  Medicaid is clearly at the center of the storm.  These options (reduce FMAP, Medicaid work requirements, etc.) will be debated in the House E&C committee. 

Importantly, the Senate and House Budget Resolutions are different.  Last night’s vote sets up a harsh reality check between House and Senate Republicans, who all want to push the president’s agenda forward but still have profoundly different approaches to key issues.

The Senate, for instance, is looking to avoid the deep cuts to Medicaid that the House is leaning on for significant cost cutting. Senate Republicans are also insisting that they won’t support a final measure that only extends Trump’s 2017 tax cuts temporarily. That could require making significant changes to the House blueprint, putting the fragile House GOP support for the measure in jeopardy.

The House and Senate must adopt identical budget resolutions to unlock the power of reconciliation — which allows parties with unified control of Congress and the White House to pass massive policy bills along party lines, sidestepping the Senate filibuster.

There are still many steps in this process, and many votes to be taken before there is a deal (assuming there will be a deal).  This week, President Trump expressed reservations to some lawmakers about potential cuts to Medicaid, which while not specified in the budget, are expected given that the document calls for the Energy and Commerce Committee to identify more than $800 billion in reductions. While Speaker Mike Johnson has argued that those cuts would come from program “fraud,” many are skeptical the party can reach those kinds of savings without impacting constituents.

Going Forward:

Now that the House and Senate have each agreed to their frameworks for a budget to cover the full fiscal year already underway, House Leader Mike Johnson and House Appropriations Chair Tom Cole plan to engage with Senate Majority Leader John Thune and Senate Appropriations Chair Susan Collins (R-Maine) today to start working out a compromise.

House Approps Chair Tom Cole told Politico last night that bipartisan negotiations on spending specifics were continuing “in good faith,” but with slightly more than two weeks until the March 14 government shutdown deadline, Republicans and Democrats are already laying groundwork to blame each other if they can’t reach an agreement in time. However, before those topline talks can reach completion in earnest, Republicans will first need to work out a finalized plan that pleases the party rank-and-file in both chambers.

 “He absolutely is depending on [the resolution] to change in the Senate,” one GOP lawmaker told Politico last night of Trump. “He does not want to cut Medicaid.”

And Administration officials also haven’t been particularly jazzed about the House budget’s $4-4.5 trillion tax instruction, which they feel is too low even at the high end. They knew weeks ago that such a sum wouldn’t be enough to permanently extend Trump’s tax cuts — let alone POTUS’ pricey pledge not to tax tips, Social Security or overtime, which tacks on $1 trillion-plus.

Which means we’re probably in for another few weeks of haggling between the Senate and House GOP, as the two sides work to negotiate an amended resolution.  According to the Washington Post this morning, many House Republicans told a Post reporter that drafting policies to match the strict spending levels will result in cuts and that Democrats are not “fearmongering,” as GOP leaders alleged yesterday, that cuts would affect social benefits such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP).  

(Sources:  Politico, Washington Post, NY Times)