Key Medicaid provision in Trump's bill is found to violate Senate rules.
The GOP is scrambling
[June 27, 2025]
By LISA MASCARO
WASHINGTON (AP) — The Senate parliamentarian has advised that a Medicaid
provider tax overhaul central to President Donald Trump's tax cut and
spending bill does not adhere to the chamber's procedural rules,
delivering a crucial blow as Republicans rush to finish the package this
week.
Guidance from the parliamentarian is rarely ignored and Republican
leaders are now forced to consider difficult options. Republicans were
counting on big cuts to Medicaid and other programs to offset trillions
of dollars in Trump tax breaks, their top priority. Additionally, the
parliamentarian, who is the Senate's chief arbiter of its often
complicated rules, advised against various GOP provisions barring
certain immigrants from health care programs.
Republicans scrambled Thursday to respond, with some calling for
challenging, or ever firing, the nonpartisan parliamentarian, who has
been on the job since 2012. GOP leaders dismissed those views and
instead worked to revise the various proposals.
“We have contingency plans,” said Majority Leader John Thune of South
Dakota.
Friday's expected votes appeared to be slipping, but Thune insisted that
“we’re plowing forward.”
But Democrats, who are unified against the package as a tax giveaway for
the wealthy at the expense of American safety net programs, said the
procedural decisions would devastate the GOP package.
Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said
the Republican proposals would have meant $250 billion less for the
health care program, “massive Medicaid cuts that hurt kids, seniors,
Americans with disabilities and working families.”
Trump wants action on the bill
The outcome is a setback as Senate Republicans race toward a weekend
session to pass the bill and send it back to the House for another vote
before Trump’s Fourth of July deadline. Trump hosted House Speaker Mike
Johnson and other GOP lawmakers in the East Room at the White House,
joined by truck drivers, firefighters, tipped workers, ranchers and
others that the administration says will benefit from the bill.
“We don’t want to have grandstanders,” Trump said of the GOP holdouts.
Trump said there are “hundreds of things” in the emerging package of tax
breaks, spending cuts and bolstered money to carry out his mass
deportation plans. “It's so good.”
What's at stake
At its core, the big bill, which has passed the House and is now being
revised in the Senate, includes $3.8 trillion in tax breaks that had
been approved during Trump's first term but will expire in December,
imposing a tax hike if Congress fails to act. To help offset lost
revenues, Republicans are relying on steep cuts to health care and food
stamps, and imposing new fees on immigrants.
GOP leaders were already struggling to rally support for Medicaid
changes that some senators said went too far and would have left
millions without coverage. The nonpartisan Congressional Budget Office
has said more than 10.9 million more people would not have health care
under the House-passed bill; Senate Republicans were proposing deeper
cuts.
After the parliamentarian advised against the Medicaid provider tax
change, Republicans said they would try to revise the provision to make
it acceptable, perhaps by extending the start date of any changes. They
are rushing to come up with similar adjustments to other proposals that
have run into violations, including one to change the Supplemental
Nutrition Assistance Program, or food stamps.
It's all delaying action on the bill, but Republican leaders have little
choice. They are counting on the health care restrictions to save
billions of dollars and offset the cost of trillions of dollars in tax
cuts.
Sen. Lindsey Graham, R-S.C., the Budget Committee chairman, rejected
calls to fire the parliamentarian, and said in a statement he was
working with the office to “find a pathway forward.”
[to top of second column]
|
House Speaker Mike Johnson, R-La., departs an event to promote
President Donald Trump's domestic policy and budget agenda in the
East Room of the White House, Thursday, June 26, 2025, in
Washington. (AP Photo/Mark Schiefelbein)
GOP torn over Medicaid cuts
States impose the so-called provider tax on hospitals and other
entities as a way to help fund Medicaid, largely by boosting the
reimbursements they receive from the federal government. Critics say
the system is a type of “laundering,” but almost every state except
Alaska uses it to help provide health care coverage.
The House-passed bill would freeze the tax, while the Senate would
cut the tax that some states are allowed to impose.
Several GOP senators have opposed cutting the Medicaid provider tax,
saying it would hurt rural hospitals that depend on the money.
Hospital organizations have warned that it could lead to hospital
closures.
Sen. Josh Hawley, R-Mo., among those fighting the change, said he
had spoken to Trump late Wednesday and the president told him to
revert to the earlier proposal from the House.
“I think it just confirms that we weren’t ready for a vote yet,”
said Sen. Thom Tillis, R-N.C., who also had raised concerns about
the provider tax cuts.
More than 80 million people in the United States use the Medicaid
program, alongside the Obama-era Affordable Care Act. Republicans
want to scale Medicaid back to what they say is its original
mission, providing care mainly to women and children, rather than a
much larger group of people.
To help defray lost revenues to the hospitals, one plan Republicans
had been considering would have created a rural hospital fund with
$15 billion as backup. Some GOP senators said that was too much;
others, including Sen. Susan Collins of Maine, wanted at least $100
billion.
Tough choices ahead
The parliamentarian has worked around the clock to assess the
legislation and ensure it complies with the so-called Byrd Rule,
named for the late Sen. Robert C. Byrd of West Virginia. It
essentially bars policy matters in budget reconciliation bills.
If leaders moved ahead without altering the provisions, the measures
could be challenged, requiring a 60-vote threshold to overcome
objections. That would be a tall order in a Senate divided 53-47 and
with Democrats unified against Trump's bill.
“It's pretty frustrating,” said Sen. Rick Scott, R-Fla., who wants
even steeper reductions.
Overnight Wednesday the parliamentarian advised against GOP student
loan repayment plans, and Thursday the parliamentarian cited those
that would have blocked access to Medicaid and other health care
programs from immigrants who are not citizens. Earlier, plans to gut
the Consumer Financial Protection Bureau were also found to violate
the rules.
But Sen. Kevin Cramer, R-N.D., said there's no desire to challenge
the parliamentarian's advice. “It's the institutional integrity,” he
said. “Even if I'm convinced 100% she's wrong.”
At the same time, Republicans lost another potential revenue source
Thursday after agreeing to a request from Treasury Secretary Scott
Bessent to remove the so-called revenge tax provision, section 899,
that would have allowed the government to impose taxes on companies
with foreign owners and investors from certain countries. Bessent
said he has reached a separate agreement with such countries.
__
Associated Press writers Kevin Freking, Leah Askarinam, Joey
Cappelletti, Michelle L. Price and Fatima Hussein contributed to
this report.
All contents © copyright 2025 Associated Press. All rights reserved |
