News: Senate Republicans are considering delaying a politically explosive Medicaid cut as they look for ways to win over GOP moderate holdouts threatening the massive reconciliation bill.
The discussions come as Senate Republican leaders are trying to ratchet up the pressure on wavering GOP senators to fall in line and meet their self-imposed July 4 deadline for sending a bill to President Donald Trump’s desk.
Several Republican senators are quietly pitching their leadership on delaying the implementation timeline of the Senate’s stricter crackdown on Medicaid provider taxes. Paired with a stabilization fund for rural hospitals, this could help win over enough of the half-dozen or so wavering senators.
To be sure, Senate GOP leaders have a ton working against them right now beyond Medicaid problems. For one, the “Byrd Bath” for key portions of the reconciliation bill isn’t finished yet. And Republican senators demanding additional changes have said they won’t vote to begin the floor process until they see final legislative text.
All of that could change dramatically once Senate Majority Leader John Thune makes his first procedural move, with Trump at the ready to help him finish the job.
Rural hospitals. The provider tax crackdown and its impact on rural hospitals continues to be the most precarious problem for GOP leaders. Sen. Thom Tillis (R-N.C.), who faces a tough reelection next year, said he wants to learn more about how each state’s rural hospitals will be impacted before moving forward. Those analyses won’t come quickly.
“I don’t have a problem with the [provider tax] scale-down,” Tillis said. “I’m just asking some questions so all members know programmatically how this will be dealt with in the states… You need to do a scenario analysis for every single one.”
The changes under discussion could give a political break to Tillis and other senators up in 2026, especially Sen. Susan Collins (R-Maine), although they’ll still be hammered by Democrats over Medicaid cuts.
Right now, harsher provider tax limits would hit Medicaid expansion states starting early in 2027, right after the 2026 elections. A later timeline would give more breathing room.
That’s on top of the rural hospital stabilization fund that GOP leaders are planning to include in the bill and likely to sweeten.
Thune is still holding out hope for an initial procedural vote Friday, followed by an overnight vote-a-rama rolling into a final vote on Saturday. The expedited floor process for reconciliation allows Republicans to begin the vote-a-rama as soon as 10 hours after the first procedural vote.
But some GOP senators told us they now expect this to be a weekend exercise, at the earliest.
House problems. The Medicaid changes under consideration won’t necessarily appease deep opposition from House GOP moderates. House conservatives are also wary of any change the Senate makes to scale back spending cuts.
Plus, the Senate still needs a path forward on SALT. Sen. Markwayne Mullin (R-Okla.) and Treasury Secretary Scott Bessent met with the House SALT holdouts Wednesday. The two sides are expected to keep talking.
The Trump factor. Thune can’t lose more than three Senate Republicans on any vote. With Trump back in Washington following the NATO summit, Thune — who’s been in constant contact with the president — can deploy his biggest asset. Or, as Thune calls Trump, “the closer.”
Trump is hosting an event at the White House today expected to feature personal stories touting the proposed benefits of the GOP reconciliation bill. This fits in neatly with Republican leadership’s desire to more aggressively sell the upside of the complex package. Most congressional Republicans have spent this week talking about the shortcomings.
Thune has always banked on Trump and outside pressure to help seal the reconciliation deal. But choosing when exactly to kick off the floor process for the bill could be Thune’s biggest gamble yet.
GAO wipeout news: The Government Accountability Office (GAO) – the independent investigative arm of Congress – could lose more than 2,200 of its roughly 3,500 employees under a FY 2026 House GOP spending proposal, the head of GAO warned in a new letter to House appropriators. This scale of layoffs would decimate GAO.
House Republicans are calling for a $396 million cut to GAO’s budget, or roughly 49%, as part of the FY2026 Legislative Branch funding bill, which is set to be marked up by the full House Appropriations Committee today.
This would leave only “skeletal staffing” while costing federal taxpayers potentially tens or hundreds of billions of dollars in lost savings for waste, fraud and abuse, something GAO roots out very well, per Gene Dodaro, the comptroller general. Democrats are adamantly opposed to House GOP funding levels, as is the Senate.
