Federal Budget: Updates & Clips

January 14, 2025

Last week we started hearing and seeing the preliminary contours of a (federal) budget reconciliation bill that Republicans are working on to advance their extension of the Trump tax cuts.  The incoming Administration plans to pay for the extension of previous tax cuts for the wealthy through massive cuts to health care and social programs (including Medicaid) that could face a cut of anywhere between $2.2 and $2.7 trillion. Much of the information came from the Chairman’s Mark that was released mid-week and lists the cuts and expenditures on deck for the bill. Read more in Politico here.

Below please find articles of interest related to the likely proposals we will see:

Medicaid:

Whether it’s trillions from Medicaid or the cuts to ACA premium subsidies that will make the coverage impossible to afford for millions, we need to connect the dots between tax breaks for the wealthy and healthcare. There are three new policy resources below.

ACA Enrollment

Sign-ups continue to soar with another record-breaking open enrollment period in which 23.6 million people got coverage.  A key part of these boosted numbers is the enhanced premium subsidies that enable many more people to afford the coverage. These higher tax credits expire in December, 2025, and congressional Republicans so far show no inclination to extend them. That could result in higher costs for millions and around 4 million people actually losing coverage all together.  Read more.

INTERESTING READ:

Free Press: The Year of McDonald’s

In 2024, we watched American life unfold beneath the golden arches—from Trump’s drive-through stunt to Luigi Mangione’s final hash brown.

McDonald’s is central to American life, both physically and culturally. The last few months have provided two massive news stories that have emphasized this. At the end of October, there was the viral, and controversial, Trump campaign stop, where he “worked” for 30 minutes at a McDonald’s in Pennsylvania. Then, this week, there was the news that Luigi Mangione, the alleged assassin of UnitedHealthcare CEO Brian Thompson, was caught in a McDonald’s—also, coincidentally, in Pennsylvania—because he was spotted by a group of morning regulars and employees.
The reaction to both stories in certain parts of the media has proved that a lot of commentators don’t understand what McDonald’s means to ordinary Americans —which basically means that they don’t understand ordinary Americans, period.

NEWS CLIPS

Associated Press: Supreme Court to weigh reinstating Obamacare care requirements struck down by lower court

The Supreme Court agreed Friday to consider reinstating some preventative care coverage requirements under the Affordable Care Act that were struck down by a lower court. 

The federal government appealed to the high court after the 5th U.S. Circuit Court of Appeals sided with employers who argued they can’t be forced to provide full insurance coverage for things like medication to prevent HIV and some cancer screenings. The lower-court ruling chipped away at the program sometimes referred to as Obamacare.

Challengers raised religious and procedural objections to some of the requirements.

New York Times: Trump Discusses Tax Cuts for New Yorkers With G.O.P. Lawmakers

President-elect Donald J. Trump reiterated his support for undoing a major provision of his 2017 tax law on Saturday when he told more than a dozen House Republicans at his Florida estate to come up with a plan for increasing the state and local tax deduction, according to four lawmakers who attended…

At the meeting on Saturday, House Republicans from New York, New Jersey and California offered a variety of ideas to Mr. Trump about how to address the issue, according to the attendees. Among the concepts discussed was the possibility of persuading local leaders to hold off on tax increases in return for a higher deduction for their residents.

“Maybe we increase the deduction, but maybe the deduction goes even higher if your state freezes or lowers the tax rate,” said Representative Nicole Malliotakis, a New York Republican and member of the Ways and Means Committee who attended the meeting. “These are all ideas we are entertaining.”

Mr. Trump largely listened to the House Republicans, who were served coconut shrimp and Trump-branded bottled water during the hourlong meeting, and asked the group to reach a consensus, the attendees said. Any proposed change would also need nearly unanimous support from other congressional Republicans, many of whom are skeptical of providing tax relief to largely high-income residents of states governed by Democrats.

Lifting the cap on the deduction is expensive, and Republicans are already grappling with the vast cost of the tax bill they plan to pass this year. Lawmakers have explored the possibility of limiting the ability of businesses to deduct state and local taxes from their federal bills to try to cover the cost of any changes.

“It can’t be unlimited, and we still need a cap,” said Representative Jeff Van Drew, a New Jersey Republican who attended the meeting. “We have to find that sweet spot.

The Hill: Trump frustrated with GOP lawmakers over debt-limit quandary

President-elect Trump wants congressional Republicans to figure out a way to avoid a default on the national debt after venting his frustration with the Senate GOP over their failure to raise the debt limit as part of a government-funding package last month.

Trump told Senate Majority Leader John Thune (R-S.D.) at a recent meeting that it’s now up to him to find a way around the debt-limit impasse, according to a Republican source familiar with the conversation.

Politico: House Republicans and Trump discuss tying California wildfire aid to debt ceiling 

A group of House Republicans and President-elect Donald Trump talked about tying wildfire aid to a debt ceiling increase Sunday night, as the fires spreading across huge swaths of Los Angeles are estimated to become one of the costliest natural disasters in U.S. history.

Of the nearly two dozen House Republicans who attended the Sunday dinner at Mar-a-Lago, where this option was discussed, several are caucus leaders and appropriators with major influence in upcoming budget reconciliation and government funding negotiations.

New York Times: Inside Elon Musk’s Plan for DOGE to Slash Government Costs

An unpaid group of billionaires, tech executives and some disciples of Peter Thiel, a powerful Republican donor, are preparing to take up unofficial positions in the U.S. government in the name of cost-cutting.

As President-elect Donald J. Trump’s so-called Department of Government Efficiency girds for battle against “wasteful” spending, it is preparing to dispatch individuals with ties to its co-leaders, Elon Musk and Vivek Ramaswamy, to agencies across the federal government…

On the eve of Mr. Trump’s presidency, the structure of DOGE is still amorphous and closely held.  People involved in the operation say that secrecy and avoiding leaks is paramount, and much of its communication is conducted on Signal, the encrypted messaging app…

But parts of the operation are becoming clear: Many of the executives involved are expecting to do six-month voluntary stints inside the federal government before returning to their high-paying jobs. Mr. Musk has said they will not be paid — a nonstarter for some originally interested tech executives — and have been asked by him to work 80-hour weeks. Some, including possibly Mr. Musk, will be so-called special government employees, a specific category of temporary workers who can only work for the federal government for 130 days or less in a 365-day period.