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Capitol agenda: The GOP’s latest megabill casualties

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House Republicans will vote to make difficult changes to the GOP megabill Wednesday in an attempt to keep the bill on track in the Senate.

The House Rules Committee teed up a provision Tuesday night that would scrub the House-passed bill of problems the Senate parliamentarian flagged as threats to the measure’s filibuster-skirting power.

The proposals getting axed include:

— Cracking down on the fraud-plagued employee retention tax credit created during the pandemic. House Republicans were relying on this for $6.3 billion in savings to offset spending in the bill.

— $2 billion for Pentagon military intelligence programs and $500 million to develop missiles. Losing this particularly irked many House GOP lawmakers.

— Allowing mining in a protected wilderness area in the Midwest. The contentious provision would have reversed then-President Joe Biden’s move to protect the Boundary Waters area.

— Part of the policy ending increased food aid for households that also qualify for heating and cooling assistance. Senate Appropriations Chair Susan Collins (R-Maine) previously complained about this.

— Extending a policy requiring federal agencies to procure a certain amount of biofuels or bio-based products.

By cutting these items, the bill retains its ability to pass the Senate with a simple majority, rather than 60 votes. While Senate Republicans are still mulling their own tweaks to the bill, and could seek to restore some of the measures now on the chopping block, these changes need to be fixed now before the Senate votes on it.

More policies could still get slashed. In the coming weeks, expect Senate Republicans to start getting their first “Byrd bath” rulings from the parliamentarian on additional GOP proposals under challenge from Democrats.

To help avoid a tough whip effort Wednesday, House GOP leaders are embedding the fixes in the procedural measure they’re using to set up debate on the $9.4 billion rescissions package — legislation that even the most conservative Republicans support. That won’t be the case when the bill comes back from the Senate in a few weeks, as leaders hope.

What else we’re watching:

— GOP tensions over the MAHA report: Key farm-state Republican senators had a heated meeting with HHS Secretary Robert F. Kennedy Jr. and other Trump administration officials Tuesday over the Make America Healthy Again report, which criticized pesticide use, four people tell Blue Light News’s Grace Yarrow. Critics of the report are concerned it paints U.S.-produced foods as unsafe to consume. Expect the Trump administration to meet with more GOP lawmakers and agriculture groups over the coming weeks before releasing a final list of MAHA-related policy recommendations later this summer.

— Trump admins on Blue Light News: Trump administration officials will testify before various House and Senate committees Wednesday. That includes Agriculture Secretary Brooke Rollins, Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth and HUD Secretary Scott Turner.

Jennifer Scholtes, Meredith Lee Hill and Katherine Tully-McManus contributed to this report. 

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Congress

Rick Scott drafts key Medicaid amendment ahead of voting marathon

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Florida Sen. Rick Scott is circulating text of his amendment to the GOP megabill that would effectively end a key Medicaid financing mechanism after 2030.

The provision won the backing of Senate Majority Leader John Thune during an eleventh-hour negotiating session held Friday night as a procedural vote was held open to win over Scott and other holdouts. It is expected to come up during the “vote-a-rama” set to take place overnight Sunday into Monday where dozens of amendments will be debated and voted on.

Scott said Sunday he’s “very confident that my amendment is going to pass.” Other Republicans are skeptical, with several in the GOP ranks nervous about cutting too deeply into Medicaid.

Under the amendment, the federal government’s 90 percent cost share for Medicaid enrollees made newly eligible under the 2010 Affordable Care Act will end on Dec. 31, 2030. Beneficiaries who were enrolled prior to that date would be grandfathered in at the old rate, but new enrollees would see their medical costs reimbursed at the lower “FMAP” rate, which can be as low as 50 percent, with states picking up the rest.

The amendment is co-sponsored by GOP Sens. Ron Johnson of Wisconsin, Mike Lee of Utah and Cynthia Lummis of Wyoming, as well as Finance Chair Mike Crapo of Idaho.

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Republicans move forward with controversial megabill accounting move

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Senate Republicans are on the cusp of formally adopting a controversial accounting tactic to zero out much of the cost of their massive domestic policy bill.

The matter came to a head on the Senate floor Sunday afternoon, when Democrats sought to prevent the use of the current policy baseline, as the tactic is known. Minority Leader Chuck Schumer objected to the maneuver and accused Republicans of setting a new precedent with the “budgetary gimmick.”

The Senate is set to vote on Schumer’s objection later Sunday or Monday, but Republicans believe their members will back up Senate Majority Leader John Thune and Senate Budget Chair Lindsey Graham.

That’s in part because they were able to sidestep a situation where senators would be asked to overrule Parliamentarian Elizabeth MacDonough on the baseline question. Instead, Republicans are asserting that Graham (R-S.C.) has the ability to establish which baseline is used under the 1974 law governing the budget process, rather than having MacDonough issue a formal ruling.

“There is nothing to debate and we consider this matter settled,” Graham spokesperson Taylor Reidy said.

The revised baseline allows Republicans to essentially write off the $3.8 trillion cost of extending tax cuts passed in 2017 that are set to expire at the end of the year. The effect on the megabill’s bottom line is profound as a pair of new Congressional Budget Office reports show.

One, released late Saturday night using the current policy baseline, showed the legislation would reduce the deficit by $508 billion. The other, released Sunday morning using the traditional method accounting for expiring provisions, showed the megabill would increase the deficit by $3.25 trillion.

“Things have never, never worked this way where one party so egregiously ignores precedent, process and the parliamentarian, and does that all in order to wipe away trillions of dollars in costs,” Sen. Patty Murray (D-Wash.) said during a speech on the Senate floor Sunday.

The maneuver came as little surprise. The GOP plan has been quietly in the works for months, and Thune had suggested they would reprise the no-formal-ruling strategy they’d used earlier in the process of passing the megabill.

“As we did on the budget resolution, we believe the law is clear that the budget committee chairman can determine the baseline we use,” Thune told reporters. Graham on Sunday embraced the CBO ruling showing the deficit savings — and his own authority to make the accounting change: “I’ve decided to use current policy when it comes to cutting taxes,” he said. “If you use current policy, they never expire.”

The baseline change is crucial for Senate Republicans because under the budget blueprint they adopted earlier this year, the Finance Committee provisions in the bill can only increase the deficit by a maximum of $1.5 trillion. The bill now under consideration wouldn’t comply under the old accounting method.

Sen. Ron Wyden (D-Ore.), the top Finance Democrat, called it “budget math as fake as Donald Trump’s tan” and said the GOP amounted to a “nuclear” choice that would weaken the chamber’s 60-vote filibuster.

“We’re now operating in a world where the filibuster applies to Democrats but not to Republicans, and that’s simply unsustainable given the triage that’ll be required whenever the Trump era finally ends,” he said.

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Megabill reading wraps up after nearly 16 hours

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Senate clerks have completed a nearly 16-hour reading of the GOP’s 940-page megabill. Clerks began reading the text aloud at 11:08 p.m. Saturday and finished Sunday at 3:03 p.m.

By refusing to waive chamber rules allowing for reading, Senate Democrats hoped to create an opportunity to highlight some of the most unpopular issues in the legislation. Now, under Senate rules, there will be 20 hours of the debate evenly divided between Democrats and Republicans.

Democrats are expected to use their full 10 hours, while Republicans are expected to take only a couple hours. That would mean the vote-a-rama — a marathon series of amendment votes — will begin sometime early Monday morning, though senators could agree by unanimous consent to delay it.

The GOP megabill is by no means finalized. Party leaders continue to negotiate to tweak the bill in ways that will win 51 votes in the Senate while also garnering enough votes to pass in the House later this week without further modifications. Republicans also continue to deal with the chamber’s parliamentarian, who continues to review whether parts of the bill comply with the budget rules the GOP is using to pass the bill along party lines.

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