This is the hard part that every House Republican foresaw, yet seemingly none are prepared for.
With the Memorial Day recess just 15 days away, the battle over huge cuts to Medicaid is pitting the most vulnerable House Republicans against the conservative wing of the GOP conference. It’s a clash of egos, ideology and political survival skills that’s come to define the party in the Donald Trump era.
Here’s the crux of where House Republicans are at the moment: After a nearly two-hour meeting between the GOP moderates and Speaker Mike Johnson, it’s clear that the moderates are winning on the high-stakes issue of cutting hundreds of billions of dollars from Medicaid. At least for the moment.
As he left his office Tuesday evening, Johnson said that he’s likely ruling out two big Medicaid changes that most moderates strongly opposed: lowering the rate by which the federal government reimburses states for Medicaid services – FMAP – and per capita caps for the Medicaid expansion population under Obamacare.
“I think we’re ruling [per capita caps] out as well but stay tuned,” Johnson said, repeating his oft-used mantra.
But Rep. Chip Roy (R-Texas), a hardliner who has little patience for Johnson, immediately shot back in a post on X following the speaker’s comments: “Well — I haven’t ruled it out. It’s necessary to stop robbing from the vulnerable to fund the able-bodied.”
Roy continued:
“So — the GOP leadership position is to defend OBAMACARE policies… rejected (no expansion) by Texas, Florida, and states with 86 members of the @HouseGOP
… & the expansion policies decidedly hurt the vulnerable (70% match) at the expense of the able-bodied expansion (90% match).”
The House Freedom Caucus also balked at the speaker’s decision.
The problem for Johnson is that he can’t please the moderates without risking an uproar from conservatives. And vice versa. It’s the same dynamic that’s plagued the last three Republican speakers. Moderates help give Republicans their majorities. Yet they’re often forced to swallow conservative policies that don’t fit the political makeup of their districts.
Although catering to the moderates isn’t easy either.
Without lowering the FMAP or applying per capita caps, it’s much harder to reach the $880 billion in spending cuts from the Energy and Commerce Committee’s jurisdiction called for under reconciliation. That said, the GOP leadership seems confident that the target is still in reach and plans to move ahead with a committee markup next week.
The mod squad. The Republicans pushing back on Medicaid cuts are coalescing around three main proposals: additional work requirements for able-bodied adults (GOP leaders want to raise the cutoff to age 64, which spurred a big pushback); more frequent eligibility checks; and cutting off programs that allow undocumented immigrants to receive benefits.
However, these provisions alone won’t hit the $880 billion target in cuts mandated for the Energy and Commerce Committee. Sources in the room estimate these three steps would reduce Medicaid spending by $400 billion to $500 billion.
At one point, Johnson signaled to the moderates that the $880 billion total was “aspirational,” said one House Republican who attended the session. GOP leaders believe that some committees will come in above their savings instructions, so that could give E&C breathing room.
Yet most importantly, there are at least a dozen GOP lawmakers who will vote against Medicaid changes that go beyond this framework. This is far more than the trio of Republican votes Johnson and Trump can lose.
Even within these three buckets, moderates are wary of the specifics.
Moderates are also worried that if they agree to $880 billion in cuts, the Senate will reject the biggest Medicaid reductions. Meaning they’ll have taken a politically toxic vote for nothing.
Several moderates said House Republicans need to coordinate with the Senate and White House on final Medicaid proposals before moving ahead with a reconciliation vote.
“What we don’t want to do is pass a bill through the House of Representatives that doesn’t even have a shot with the president or with the United States Senate,” Rep. Jeff Van Drew (R-N.J.) said. “That would be insane. It’s stupid.”
The Medicaid options. Lowering the FMAP or imposing per capita caps on the expansion population were the clearest options for Energy and Commerce to meet its budget instructions.
The panel can pull from other areas under its jurisdiction, although CBO has said most of the $880 billion would have to come from Medicaid.
– Limit Medicaid provider taxes. Several states rely on the budget trick to bring in more federal funding for Medicaid. Ending or restricting them would likely hit Republican states the hardest. CBO estimates the limits would save nearly $600 billion over a decade.
– Limit state-directed payments. The Biden administration had effectively removed restrictions on state-directed payments. Republicans could curtail or end that Biden-era rule. When the GOP floated it in January, Republicans estimated it would only raise about $25 billion.
– Medicare site neutrality. This proposal would generally align Medicare payments for outpatient services across care settings. House Republicans proposed this option in January. CBO estimates it could bring in around $157 billion.
