Senate Republican leaders have their work cut out for them.
The Senate Finance Committee’s mix of tax policies and Medicaid cuts are raising alarms for several GOP senators, threatening the leadership’s path to 51 votes. House Republicans also have major problems with the Senate GOP leadership’s proposed changes, as released Monday by the committee.
Senate GOP leaders desperately want to work out problems with the House now to avoid a formal conference. But they also need to sell their own senators.
President Donald Trump, whom GOP leaders have nicknamed “the closer,” is otherwise occupied with a major conflict in the Middle East, leaving senators to their own devices for the time being.
“Certainly everything that we’ve put out is out there for consideration, and we’ll see how people react to it,” Senate Finance Committee Chair Mike Crapo (R-Idaho) said Monday night after briefing GOP senators.
And react they did. This shows just how hard Crapo’s job will be these next couple of weeks — and maybe beyond — as Republican leaders race to pass a bill before July 4, a deadline that’s looking increasingly difficult to meet.
Medicaid. Senators were surprised that Finance went further with its limits on Medicaid provider taxes. Along with the House bill’s freeze on new provider taxes, Finance would cap expansion states’ charges at 3.5% by 2031. GOP leaders viewed this as a necessary change to help offset the costs of other priorities.
Sen. Josh Hawley (R-Mo.), who has said Medicaid benefit cuts are a red line for him, told reporters he was “alarmed” at the changes.
“This is gonna defund rural hospitals effectively in order to, what, pay for solar panels in China,” Hawley said, referring to the slower phase-out of clean energy tax credits. “I’ll be really interested to see what the president thinks about this.”
The White House is circulating a new report on Medicaid this morning as top administration officials are working to sell the reconciliation bill. The White House report claims 11% of Medicaid spending last year, or more than $56 billion, went to able-bodied adults who were abusing the system.
CMS Administrator Mehmet Oz will be at the Senate GOP lunch today, too.
Fiscal hawks. Sen. Ron Johnson (R-Wis.) continues to rail against the GOP’s reconciliation package for failing to address “deficit and debt issues.” Leaving the Finance briefing on Monday, Johnson was insistent the bill couldn’t be fixed before the July 4 recess.
Sen. Rick Scott (R-Fla.), another deficit hawk, wouldn’t say on Monday whether he’d support the proposal, noting he still had to review it.
While the Senate GOP package includes deeper Medicaid spending cuts than the House’s version, it goes lighter on repeals of clean energy tax credits from the Inflation Reduction Act. Hardline conservatives in the House have insisted on more aggressive cuts, especially for wind and solar. So that could raise alarms with House Freedom Caucus members.
“Yeah, I will not vote for this,” Rep. Chip Roy (R-Texas) said on X, quoting criticism of the Senate’s gentler IRA repeals.
SALT. There’s a huge gap between the Finance text’s $10,000 SALT cap and the $40,000 limit for most taxpayers in the House GOP-passed bill.
House SALT backers say their deal isn’t up for negotiation, but Republican senators are insisting it has to be.
Sen. Markwayne Mullin (R-Okla.) said he has discussed the Senate bill’s SALT cap with Rep. Mike Lawler (R-N.Y.) and there’s an understanding it’s a “placeholder.”
But Lawler and Rep. Nick LaLota (R-N.Y.) have said they won’t accept a dollar less than a $40,000 cap on deducting state-and-local taxes. Reps. Young Kim (R-Calif.) and Andrew Garbarino (R-N.Y.), the SALT Caucus cochairs, said the House’s cap “must remain in the final bill.” Rep. Nicole Mallikotakis (R-N.Y.) called the Senate’s proposal “insulting.”
Yet GOP senators are happy with the Finance Committee’s posture on SALT.
“There’s just no appetite in our conference at all for this number that five people in the House [want],” Sen. Eric Schmitt (R-Mo.) said.
Public lands. Another problem for both House and Senate Republicans is a Senate Energy and Natural Resources Committee provision allowing millions of acres of public lands to be up for sale.
Sen. Mike Lee’s (R-Utah) proposal lists eleven Western states that would have public land up for sale, excluding Montana. There’s a good reason for that. Montana GOP Sens. Steve Daines and Tim Sheehy oppose public land sales. It’s unclear if they’ll go for Lee’s legislation.
Remember, Rep. Ryan Zinke (R-Mont.) killed off a much narrower version of this measure in the House. If Lee’s bill makes it back to the House, we’ll see if Zinke and his newly formed bipartisan Public Lands Caucus try to strip this one out, too.
The internal GOP negotiations will continue as the Byrd Rule review of the measure unfolds. Senate Republicans will meet today. Remember – This is a short week, with the Senate leaving on Wednesday night due to the Juneteenth holiday.
Here’s news. Five former House Republicans have penned an open letter saying they oppose the reconciliation bill because it doesn’t seriously deal with the nation’s fiscal problems. Former Rep. Matt Salmon (R-Ariz.) led the letter.