House Republican leaders are looking to cut federal spending by $2 trillion to $2.5 trillion as part of their reconciliation push, according to multiple sources familiar with the talks.
House GOP negotiators now believe they will have to dig deeper into Medicaid spending to meet those targets, including potentially cutting benefits for enrollees, according to these sources. This will be a complicated political challenge. Some House Republicans are going to be skeptical about slashing Medicaid spending so heavily, and the White House will have to agree as well. We scooped last week that Republicans were eyeing $4.7 trillion in tax cuts.
Then there’s another dynamic at work: Senate Budget Committee Chair Lindsey Graham (R-S.C.) plans to mark up his own budget resolution on Wednesday that includes more than $340 billion in new funding for border security and the Pentagon over four years, as well as energy policy changes, all of which will be offset by spending cuts. Speaker Mike Johnson has pleaded with Graham to hold off on a markup. So far, Graham hasn’t agreed.
“I hope the House will move forward soon, but we cannot allow this moment to pass, and we cannot let President Trump’s America First Agenda stall,” Graham posted on X Friday. Graham played golf with Trump on Saturday in West Palm Beach, Fla.
Meanwhile, Johnson spent the weekend in Louisiana. He joined Trump for the Super Bowl on Sunday evening. Appearing on “Fox News Sunday” from the Caesars Superdome in New Orleans — the Super Bowl venue — Johnson again urged Graham to stand down.
“I appreciate the Senate’s zeal, we have it in the House as well,” Johnson said. “But as I reminded my friend Lindsey, I have about 170 additional personalities to deal with and he’s only got 53 on the Republican side there.”
Johnson said he’s been “reminding” the White House that House Republicans, in his view, can only pass a single reconciliation bill. Graham’s strategy calls for two bills: the defense-border-energy package now with an extension of the 2017 Trump tax cuts later this year.
And it gets worse for House Republicans. Johnson hinted that the Budget Committee may not mark up the GOP package this week as promised.
“We were going to do a Budget Committee markup [this] week. We might push it a little bit further because the details really matter,” Johnson said.
The Senate’s two-bill strategy may look awfully appealing to the White House once the Budget Committee starts moving a resolution on Wednesday and Thursday. In fact, it’s already the preferred option of many hardline House Republicans.
The House is in session today through Thursday, and then members leave for a weeklong Presidents Day recess. The Senate will be in session next week.
Huge cuts to Medicaid — plus changes to food stamps and other social safety net programs — even as Republicans push tax cuts for wealthy Americans and corporations may become politically difficult. States that expanded Medicaid coverage via Obamacare or during the Covid-19 pandemic could get hit hard.
Block granting Medicaid and instituting work requirements are under discussion. But if Republicans decide to start tinkering with benefits through per capita caps, reducing the federal contribution or other programmatic changes, that becomes more difficult. Children, low-income and rural communities would be inordinately impacted.
Rep. Jeff Van Drew (R-N.J.) told us last week that he was worried about potential cuts to Medicaid.
“I’ll be very blunt — Medicaid isn’t just something for people who don’t want to work or on welfare,” Van Drew said. “Seventy-million people in this country get their health care through Medicaid now, because we increased the limits.”
Government funding. The federal government runs out of money in 32 days. Republicans and Democrats aren’t close to a topline spending number. In fact, House and Senate Republicans still aren’t on the same page when it comes to FY2025 spending.
There’s also been a back-and-forth between Johnson and House Minority Leader Hakeem Jeffries as to whether there is a stalemate in the talks. Johnson says there is, Jeffries and other Democrats say there isn’t. Or at least it’s not their fault anyway.
We’ve been crystal clear in our view that Washington is drastically underestimating the chance for a government shutdown after March 14.
Sen. Andy Kim (D-N.J.) was on NBC’s “Meet the Press.” Kristen Welker asked him if he would be willing to shut down the government over some of Elon Musk’s moves. Here’s what Kim said:
We’ll note that a number of Democrats won’t vote for a shutdown. Yet remember that if there’s no spending deal, there will be an automatic sequester in mid-April across the board.
