Good morning,

What follows is an excellent and relatively easy to understand summary of what’s happening with the federal budget, and the process congressional Republicans are using to: 1) secure massive federal cuts to pay for Trump tax breaks for the wealthiest Americans, 2) re-organize and (in some cases) cripple federal agencies, and to advance the President’s legislative agenda.

First, to be clear: the Trump/Musk assault on services families depend on continues, and it continues to hurt Americans. The administration continues to impound—that is, illegally withhold—funding Congress allocated for specific programs. Below are reports about impacts impoundment has had just this week: 

• Fifty-plus Head Start and Early Head Start providers have not been paid, forcing layoffs and risking additional job losses and preschool closures in 24 states, D.C., and Puerto Rico.  
• The Washington State Department of Transportation is waiting on delayed federal funding for bridge repairs and road safety projects. If the administration continues to block Washington’s funds, hundreds of layoffs could happen within days. 
• The Appalachian Center for Independent Living, a West Virginia nonprofit assisting people with disabilities, laid off 60 percent of its staff after the Trump administration cut off its funding, forcing the Center to cut back the services it provides. One patient living with stage five renal disease, for example, lost transportation to her thrice-weekly dialysis treatments. 

We’ll continue to keep you updated on this critical topic. If you’d like to read more background on impoundment and recent events, check out our several updates from the past month here. Now, back to what’s happening in Congress.

What happened on Friday

The Senate released a budget blueprint, which directs specific House and Senate committees to write parts of the reconciliation bill and tells each of those committees how much to change government spending or revenue. This is important because in telling specific committees to write parts of the bill, the budget resolution defines the universe of topics the bill can possibly cover. The final bill is only going to include policies that fall under those committees’ jurisdiction. Here’s a good summary of every congressional committee’s jurisdiction. Note that House and Senate committees—very confusingly—do not mirror one another. 

Breaking down the Senate’s budget 

The Senate’s budget blueprint tells committees to come up with at most $521 billion in new spending and at least $4 billion in cuts between Fiscal Years 2025-2034. Here’s a table breaking down where they want committees to spend money, and where they want committees to cut it. I’ll analyze these numbers a bit below. 

While the document doesn’t tell committees how to achieve their prescribed spending targets, Republicans have offered ample clues as to what’s coming (see our January 21 update, What We Can Learn from House Republicans’ Reconciliation Menu). 

Below are some key takeaways from a quick review of the resolution. Note that because this document came out just a couple hours ago, this list is certainly not exhaustive.

Republicans propose taking health insurance away from families.

The budget directs the House Energy and Commerce Committee and the Senate Finance Committee to make at least $1 billion in cuts. These committees oversee Medicaid, the health insurer for more than 70 million Americans. GOP leaders have proposed creating work requirements for people on Medicaid and “per capita caps” to save money. Data shows that Medicaid work requirements reduce participation in the program considerably—including among people who meet the requirements but are confused by mandated reporting. Reports also indicate that people who lose coverage due to work requirements suffer long-term consequences: data from Arkansas shows that half struggle to pay off medical debt and nearly two-thirds delay taking medications due to their high cost. On top of that, there’s ample data showing that “work requirements” do little to actually promote employment. The Center on Budget and Policy Priorities has a great explainer on per capita caps. Briefly, these would limit how much money the federal government gives each state for Medicaid, based on a fixed amount per person. Since this cap rises more slowly than actual health care costs, states would be forced to kick people off the program and/or cover fewer health care services. The Congressional Budget Office found that, ultimately, this could force more families into bankruptcy and medical debt. 

Republicans propose taking food assistance away from families.

The agriculture committees’ inclusion indicates that Republicans could target the Supplemental Nutrition Assistance Program (SNAP), often called “food stamps”—a program that feeds more than 40 million Americans, and another that’s long been a GOP target for work requirements. Data shows that work requirements reduce SNAP participation by more than half, that unhoused adults are disproportionately barred from the program, and that work requirements are rooted in racist tropes and myths that disproportionately harm Black families. 

The Senate is proposing a reconciliation bill that will not include extending the corporate-friendly Trump tax policies of his first term.

If congressional Republicans take this path, they’ll need to do a second reconciliation bill before the end of the year to avoid those tax provisions expiring. This could cost as much as $5.5 trillion—meaning, the GOP will likely look to make even more draconian cuts. Cuts could be way more severe than what’s in this document. Committees have leeway to cut more, thereby worsening the impacts this bill has on families.

What happens next? Senate Republicans aim to consider their budget in committee on Wednesday, and each committee named in the budget has been told to submit their recommendations—that is, what specifically they want to spend on or cut, and by exactly how much—to their respective budget committees by March 7. At the same time, House Republicans say they’ll also put out a budget resolution in the coming days—but one that sets up one big reconciliation package that does include Trump’s tax agenda. Which approach will prevail—if either does—remains to be seen. 

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And related news from the National Council:

DOGE Officials Arrive at CMS

On Wednesday, it was reported that representatives of Elon Musk’s Department of Government Efficiency (DOGE) have been working at the Centers for Medicare and Medicaid Services (CMS), where they were granted access to agency systems and technology. CMS issued a statement on the agency website earlier this week, stating that CMS has two agency veterans collaborating with DOGE officials to ensure appropriate access to agency systems. Reporting by the Wall Street Journal indicates that DOGE representatives are also examining the agency’s organizational design and how it is staffed. Check out the CMS statement.

HHS Payment Outages Reported

This week, officials from the HHS Payment Management System (PMS) contacted system users and informed them that HHS has been experiencing periodic network outages, making PMS appear offline. PMS provides disbursement, grant monitoring, reporting and cash management services to awarding agencies and grant recipients.  HHS further stated that network teams are working on the issue and will contact users once the network outages have been resolved. Many PMS users have begun reporting that the system is once again accessible, but HHS has reported that some users are experiencing lags because of the high volume of requests.

Trump Administration Issues Executive Order on Regulations

Last week, President Trump signed an executive order (EO) calling on federal agencies to eliminate 10 existing “rules” for every new rule an agency plans to institute. The EO specifically requires that whenever an agency announces a new rule, regulation or guidance, it must identify at least 10 existing rules, regulations or guidance documents to be repealed.  It also requires that for fiscal year 2025, the total incremental cost of all new regulations, including repealed regulations, be “significantly less than zero.” Check out the EO and a corresponding fact sheet.