Congress
Capitol agenda: Johnson warns about a Medicaid backlash
With President Donald Trump’s July 4 deadline drawing near, Senate Majority Leader John Thune told Blue Light News Tuesday night he believes the Senate is “on a path” to start voting on the megabill Friday.
But he’s got several fires to put out first. For one, he’s under immense pressure to water down the Medicaid provisions the Senate GOP is counting on for hundreds of billions of dollars worth of savings.
Speaker Mike Johnson is warning in private that Senate Republicans could cost House Republicans their majority next year if they try to push through the deep Medicaid cuts in the current Senate version, according to three people granted anonymity to describe the matter.
That comes as Sen. Thom Tillis (R-N.C.) cautions GOP senators that those same cutbacks could become a political albatross for Republicans just as the Affordable Care Act was for Democrats.
“[Barack] Obama said … ‘if you like your health care you can keep it, if you like your doctor we can keep it,’ and yet we had several million people lose their health care,” the in-cycle senator told reporters Tuesday. “Here we’re saying [with] Medicaid, we’re going to hold people harmless, but we’re estimating” millions of people could lose coverage.
GOP leaders are trying to ease concerns by preparing to include a fund to help rural hospitals that could be harmed by the reductions, even as Thune insisted Tuesday “we like where we are.” Sen. Susan Collins (R-Maine), who’s been pushing for the fund, said while that “helps lessen the impact,” she remains “concerned about the changes in the funding for Medicaid in general.”
The other drama hanging over the bill are several imminent, critical rulings from Senate Parliamentarian Elizabeth MacDonough. Several committees that already have rulings in hand are due to release revised text as soon as this morning, according to a person familiar with the plans. And Republicans could know as soon as Wednesday whether MacDonough will clear major parts of their tax package.
As of late Tuesday, the parliamentarian had not yet ruled on provisions linked to the so-called current policy baseline, an accounting maneuver that zeroes out the costs of $3.8 trillion of expiring tax cuts, according to two people granted anonymity to disclose the private discussions.
Make no mistake: Adverse rulings could send Republicans back to the drawing board on making their tax plan permanent, or otherwise force them to go nuclear and override or ignore MacDonough altogether. There’s uncertainty from all sides about how that would play out, given the gambit has never been tried before with tax legislation.
This much is already clear: With the tax package in flux and Medicaid savings under threat, GOP leaders have a major math problem on their hands. And House fiscal hawks are watching to see, regardless of the accounting method, whether the Senate sticks to the budget deal they agreed to with Johnson earlier this year.
What else we’re watching:
— Bove on Blue Light News: Senate Judiciary lawmakers will convene the first blockbuster judicial hearing of the second Trump administration later Wednesday, where they will grill Emil Bove, a top Justice Department official and former criminal defense lawyer for Trump who has a shot at a lifetime appointment on the federal bench. Some even see him as a potential future Trump Supreme Court nominee.
— Vought testifies on rescissions: OMB Director Russ Vought will testify in front of the Senate’s full bench of appropriators Wednesday afternoon to justify the White House’s request for $9.4 billion in cuts of previously-approved money. Expect pointed questioning from various Republicans on the panel, including Collins, who has publicly opposed cuts to PEPFAR, the HIV and AIDS foreign aid program.
— Iran briefings incoming: Senators will have a postponed briefing on the situation in Iran on Thursday, after which Democrat Tim Kaine (Va.) is aiming to call a vote on his resolution seeking to block further U.S. military action against Iran. On the House side, Speaker Johnson said that members will now be briefed on Friday. Minority Leader Hakeem Jeffries said Tuesday there had been no Gang of Eight meeting yet.
Jordain Carney, Meredith Lee Hill and Hailey Fuchs contributed to this report.
Congress
Megabill threatens to languish as challenges pile up
Republicans aren’t panicking about their fraying domestic policy bill. But they aren’t exactly sure about how it’s all going to come together, either.
Senate Republicans emerged from a closed-door lunch meeting Thursday putting on a brave face about the megabill’s progress. Yet this time last week, members were expecting revised text of the sprawling bill Monday with votes starting a couple of days later. In other words, they thought they’d be close to done by now.
Instead, Majority Leader John Thune refrained from giving his members a specific timeline during a closed-door lunch Thursday, according to three attendees granted anonymity to describe the private meeting. Senators are preparing to stay in town and vote through the weekend, but internal policy disputes and procedural roadblocks thrown up by the chamber’s parliamentarian are keeping firmer plans in flux.
A July 4 deadline being pushed by the White House hangs over Capitol Hill as the only real forcing mechanism, and some Republicans said they were glad to have it even if many others harbor doubts about whether that target can be met.
“I don’t think it gets easier to pass going longer,” said Sen. Kevin Cramer of North Dakota. “The more time we take, the more people find things they want to change.”
The latest blow for the GOP came after Senate Parliamentarian Elizabeth MacDonough warned that key Medicaid language would not comply with the strict rules that govern what can be included in a bill Republicans intend to pass along party lines using special budget rules. GOP senators expressed confidence they would be able to address MacDonough’s concerns, which some described as “technical,” and salvage the proposal.
But that, Thune acknowledged, will take time and threaten his plan of holding an initial vote Friday: “The parliamentarian’s decisions may push that back.”
Noticeably absent from the debate early Thursday was President Donald Trump, who has the bulk of his legislative agenda tied up in the bill. He returned late Wednesday from a trip to Europe and is scheduled to hold a White House event on the megabill Thursday afternoon.
His lobbying is widely seen as a necessary ingredient in getting the bill done. And for all the anxiety about the parliamentarian decisions Thursday, the more profound issue for Republicans are their internal divides about the policy provisions in the bill — particularly those dealing with Medicaid.
MacDonough’s rejection of initial language curtailing state provider taxes, which most states use to leverage federal health care dollars, emboldened the so-called “Medicaid moderates,” who believe the proposal is not ready for prime time. Nor have they been convinced by leadership’s offer of a $15 billion rural hospital fund, though negotiations are expected to force that number higher.
Sen. Josh Hawley (R-Mo.), who spoke with Trump Wednesday about the Medicaid language, said the ruling gave Republicans “a chance to get it right” and expected Trump would be more involved now that he’s “back on terra firma.”
“I think he wants this done. But he wants it done well. He doesn’t want this to be a Medicaid cut bill — he made that very clear to me,” Hawley said. “He said this is a tax cut bill, it’s not a Medicaid cut bill. I think he’s tired of hearing about all these Medicaid cuts.”
Senate Finance Chair Mike Crapo (R-Idaho) walked Republicans through MacDonough’s rulings during the closed-door lunch. Most left saying it would be relatively straightforward to tweak the proposal and keep it in the bill. Senate GOP leaders are counting on the questioned provisions to generate some $250 billion in savings to offset tax cuts and other costly items.
“I’m feeling much better after lunch,” Sen. Ron Johnson (R-Wis.) said walking out. “The parliamentarian did kind of a little bit of a hand grenade, but I’ve been encouraged by what we heard.”
The tight-lipped Crapo would not discuss details of MacDonough’s rulings Thursday. But Sen. John Hoeven of North Dakota said that, based on Crapo’s briefing, the issue had to do with a provision that would freeze provider taxes in states that have not expanded their Medicaid programs under the Affordable Care Act.
“It was a technical issue with a technical solution,” he said.
Other pitfalls remain to be seen. Republicans are still waiting for MacDonough to issue rulings on their tax plan, while other committees are waiting on final decisions on a crucial food-aid plan and other provisions they had to rework after she rejected their initial efforts.
And while senators have been focused on resolving their own disputes, they also have to be mindful of the narrowly divided House — where pockets of Republicans have continued to raise angry objections to changes their Senate counterparts have been making to the bill that passed the House last month.
No group has been more vocal than the blue-state Republicans pushing for an expansion of the state-and-local-tax deduction. They received an offer brokered by the administration Thursday that would keep the House-passed $40,000 deduction cap but lower the income threshold and change how the deduction is indexed to inflation, according to three people granted anonymity to describe the talks.
Rep. Nick LaLota (R-N.Y.) was one of several key players who poured cold water on the offer, saying that he “declined the offer to participate … in further faux-negotiations until the Senate gets real.” Sen. Markwayne Mullin (R-Okla.), a key go-between, insisted “we’re going to find a landing spot.”
For House conservatives, meanwhile, the outrage of the day was MacDonough’s new decisions axing the health care provisions — including some aimed at excluding undocumented immigrants from federal benefits. Several publicly called on senators to overrule the parliamentarian, or fire her outright — a power Thune holds.
Most Republican senators rejected that demand Thursday, warning that it would derail the reconciliation process.
“People should remember that what comes around goes around when it comes to the parliamentarian,” said Sen. Susan Collins (R-Maine), a key undecided vote. “She may rule the way you like one day, the way you don’t the next.”
Thune also rejected calls to sidestep MacDonough, though the headache could become substantially worse if Trump weighs in. So far the White House is staying out of the Senate’s procedural machinations and even Trump’s allies are signaling that he should keep quiet when it comes to MacDonough.
“I hope he doesn’t,” Cramer said.
Benjamin Guggenheim and Meredith Lee Hill contributed to this report.
Congress
Thune says Senate won’t overrule parliamentarian
Senate Majority Leader John Thune said Thursday the Senate would not move to overrule its parliamentarian after she advised that including key provisions in the GOP’s domestic-policy megabill would expose it to a fatal Democratic filibuster.
After the decisions were publicized Thursday, multiple conservative Republicans called on the Senate to sideline MacDonough. But when asked by Blue Light News about overruling her, Thune said, “No, that would not be a good option for getting a bill done.”
The rulings from Parliamentarian Elizabeth MacDonough affected several major pieces of the GOP plan, including a provision that would crack down on provider taxes that states used to fund their Medicaid programs as well as measures meant to exclude undocumented residents from public benefits. Republicans are expected to try to rewrite the provisions in hopes of winning MacDonough’s blessing.
“How is it that an unelected swamp bureaucrat, who was appointed by Harry Reid over a decade ago, gets to decide what can and cannot go in President Trump’s One Big Beautiful Bill?” wrote Rep. Greg Steube (R-Fla.) on X.
“The WOKE Senate Parliamentarian, who was appointed by Harry Reid and advised Al Gore, just STRUCK DOWN a provision BANNING illegals from stealing Medicaid from American citizens,” added Sen. Tommy Tuberville (R-Ala.), also on X. “This is a perfect example of why Americans hate THE SWAMP.”
The parliamentarian rulings are crucial because Senate Republicans are seeking to use special budget reconciliation rules to avoid a Democratic filibuster and pass the bill on party lines; those rules limit such bills to strictly fiscal-related matters.
While the parliamentarian serves only as an adviser to the Senate’s presiding officer and can be overruled — or fired — members generally heed her guidance out of a bipartisan desire to preserve the filibuster for most legislation and to otherwise observe the Senate’s norms. Recently, Thune took pains to arrange a Senate vote overruling an EPA decision on California emissions standards in such a way that MacDonough would not be directly overruled.
MacDonough, who has spent more than 25 years as a Senate staffer and served as parliamentarian since 2012, has been the subject of controversy virtually any time senators have sought to use the party-line reconciliation process. Multiple Democratic lawmakers, for instance, called on the Senate to overrule her in 2021 after she advised that a minimum wage increase could not be included in their then-pending domestic policy bill.
Congress
Senate GOP dealt major blow on megabill health care plans
Senate Republicans are facing major new issues with their domestic policy megabill after the chamber’s parliamentarian advised senators that several provisions they are counting on to reap hundreds of billions of dollars in budget savings won’t be able to pass along party lines.
Those include of major pieces of Medicaid policy, including politically explosive plan to hold down Medicaid costs by cracking down on state provider tax — a provision that is expected to have a nine-figure impact on the bill. Republicans now will have to try to rewrite major sections of their Finance bill or potentially leave out key policies.
The decisions were detailed in a Thursday morning memo from Democrats on the Senate Budget Committee. Other provisions now at risk include several GOP proposals to exclude undocumented residents from Medicaid, including by withholding federal funds from states that make them eligible for benefits.
The rulings come at a precipitous time for Senate Majority Leader John Thune and other GOP leaders, who are already facing a revolt inside their conference from members wary of the practical and political impact of the Medicaid changes. They have proposed reverting to a less drastic House plan, which would merely freeze the existing provider taxes, though it’s unclear if that provision could also pass muster under Senate rules.
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