Congress
States bear the brunt of House GOP Medicaid plan
House Republicans opted against some of the most dramatic changes they had been considering for Medicaid, the joint federal-state program covering nearly 80 million Americans. But they are plowing forward with other major initiatives that could leave millions without coverage as the GOP starts laying out key provisions of its party-line domestic policy megabill.
The House Energy and Commerce Committee proposal released Sunday night attempts to strike a balance between satiating conservatives’ thirst for deep cuts to the program and placating moderates wary of major coverage losses for low-income Americans.
It does not include the most controversial ideas, including per-capita caps on federal Medicaid payments to states, but it incorporates new mandates that will likely force states to revamp how they finance their programs or cut benefits. It also includes new work requirements that are expected to lead many people to lose coverage, as well as a new cost-sharing requirement for some beneficiaries in the program, not to exceed five percent of a patient’s income.
The Energy and Commerce plan also hits on hot-button social issues — proposing, for instance, to cut federal funding for groups like Planned Parenthood and ban the use of Medicaid dollars for gender-affirming care for youth. It also scales back funding from states that use their own funds to offer coverage for undocumented people.
“Democrats will use this as an opportunity to engage in fear-mongering and misrepresent our bill as an attack on Medicaid,” Chair Brett Guthrie (R-Ky.) wrote in a Wall Street Journal op-ed Sunday. “In reality, it preserves and strengthens Medicaid for children, mothers, people with disabilities and the elderly — for whom the program was designed.”
The panel has been tasked with finding $880 billion in savings to help finance a massive portion of the GOP’s party-line package of tax cuts and extensions, border security investments, energy policy and more. Committee Republicans have been under significant pressure to make politically difficult cuts to Medicaid as part of that effort. Guthrie told committee Republicans on a call Sunday that the package will create more than $900 billion in savings.
Moderate Republicans have been hesitant to make major cuts to the popular safety net program for vulnerable Americans, while fiscal hawks have been angling for transformative “structural” changes. Democrats and many players in the health care industry, including hospitals — which are major employers in many districts — are expected to fiercely oppose the proposal.
“Republican leadership released this bill under cover of night because they don’t want people to know their true intentions,” Rep. Frank Pallone (D-N.J.), the top Energy and Commerce Democrat, said in a statement. “Taking health care away from children and moms, seniors in nursing homes, and people with disabilities to give tax breaks to people who don’t need them is shameful. Democrats have defeated Republican efforts to cut health care before and we can do it again.”
Guthrie worked behind the scenes to placate both moderates and conservatives to get to a deal that both sides can live with, but it remains to be seen whether he and his leadership have in fact landed on a winning strategy. Energy and Commerce is scheduled to meet Tuesday at 2 p.m. to debate and advance the bill.
One of the largest potential sources of savings will come from a policy curbing states’ ability to levy taxes on providers, which could force states to make major changes since the taxes can pay for a state’s share of Medicaid costs. The legislation would freeze state provider taxes at their current rates and prohibit them from establishing any new taxes.
Conservatives argue that states use the taxes to boost their federal share of Medicaid payments without having to use their own revenue. Doctors and hospitals don’t mind because a state can direct the extra funds back to them, making up for the tax hike.
Every state except for Alaska relies on a provider tax of some form, an analysis from the research firm KFF found. Last year, 32 percent of states’ contributions to Medicaid costs came from other sources such as local government funds and the provider taxes. States cannot levy more than 6 percent of a provider’s income and must tax those on and off Medicaid.
Some states have already warned Washington about what would happen if they can’t levy Medicaid taxes. New Jersey’s Medicaid agency released a model of potential changes back in February and would lead to an estimated $2.5 billion in cuts to federal funding.
It also will mandate every state to install a work requirement for certain beneficiaries. Able-bodied adults without any dependents would have to work at least 80 hours a month or perform other activities such as community service. It would not apply to pregnant women and only adults from 19 to 64. Tribal members are also exempt as well as those with serious medical conditions.
Congress would leave it up to states to verify compliance with the work requirement.
The bill would also target state-directed payments, which gives states more power over provider payments and allows some providers to get reimbursed more in line with what commercial insurers pay them. The goal of the payments is to bolster pay rates for providers and encourage them to enter value-based payment arrangements where doctors are paid based on the quality of care delivered. Conservatives have argued there isn’t enough transparency in the payments.
Here’s what else the package would — and wouldn’t — do:
- Non-health care policies: The package would allow the federal government to auction off wireless spectrum in a move that is expected to generate $88 billion, Guthrie said. It would also claw back Biden-era green energy spending, including climate spending under the Inflation Reduction Act.
- Take on some parts of Medicaid expansion: The package would lower the federal share of payments to states that have expanded Medicaid under the Affordable Care Act if the state allows undocumented immigrants to get Medicaid coverage. It is illegal for undocumented immigrants to get coverage, but several states take on the full amount of coverage without any federal match.
- Stricter eligibility checks: The legislation would roll back Biden-era rules limiting Medicaid eligibility checks to once annually, allowing them to be made twice a year. Savings would ensue as more are kicked off the rolls.
- Address cuts to doctor pay in Medicare: Doctors have been angling to reverse payment cuts mandated by a formula that lawmakers on both sides of the aisle say doesn’t account for rising costs. The package aims to blunt that.
- Pharmacy benefit manager reform: The package includes an overhaul of the business practices in Medicaid of the pharmacy intermediaries, which pharmaceutical companies argue have driven up the cost of prescription drugs. PBMs have argued they help negotiate lower drug prices and the reforms would limit their ability to do so.
- Drug price negotiation: The package would also soften Medicare’s new power to negotiate drug prices under the Inflation Reduction Act for certain drugs.
Congress
GOP senators urge Trump to find Iran exit plan as energy prices rise: ‘The clock is ticking’
President Donald Trump promised a quick end to the war in Iran, but the ongoing conflict has kept energy costs high — and some Senate Republicans are starting to go public with their concerns.
GOP lawmakers who already feared November would be an increasingly tough battle are trying to nudge the president toward clearly defining his endgame after a surge in oil, gas and fertilizer prices. Trump warned the sticker shock might not completely recede by the time the November elections roll around, though news Friday that the Strait of Hormuz would reopen could begin to bring some relief if the agreement sticks.
Several GOP senators are warning the president could face growing pushback, including them not supporting military action against Iran after the conflict hits the 60-day mark at the end of the month, if he doesn’t articulate his plan. The White House could try to invoke a 30-day extension for national security reasons.
“I hope that we are arriving at an exit strategy here to bring this to a close to preserve our security interests and bring down the cost of gasoline,” Sen. Josh Hawley (R-Mo.) told reporters this week, adding that the “clock is ticking” on the war.
Sen. Lisa Murkowski (R-Alaska) said in an interview that she and a group of other senators are in the process of drafting an authorization for the use of military force against Iran, which would lay out when and how Trump could use force. She pointed to the 60-day threshold as a possible deadline for hammering out text, saying it would be “helpful” for it to be done by then.
Even senior Republicans are warning that if the administration wants Congress to greenlight tens of billions in additional war funding, Republicans are going to need to know more about the president’s ultimate Iran strategy beforehand.
“I think our members are going to be very interested in what next steps are,” said Senate Majority Leader John Thune, predicting that the administration’s forthcoming Iran war spending ask “will be an important inflection point if and when the administration submits their request.”
Thune, like most congressional Republicans, has been supportive of the administration’s Iran campaign but said the impact on gas and fertilizer prices is “a big deal” back in his home state of South Dakota.
“We’re in planting season so if you didn’t buy fertilizer ahead of time, you’re really feeling it, and obviously fuel is a critically important part of production, agriculture,” Thune said this week, prior to the Strait’s reopening.
Retiring Sen. Thom Tillis (R-N.C.) predicted his party would ultimately keep the Senate majority, but said the Iran war and the related spike in pricing could be a drag when they are already facing “headwinds.”
“The president has to help us get the vote out,” Tillis said. “But the base alone is not going to be able to do it. The way we’re going to get the other ones is addressing the energy challenges, particularly the price at the pump and some of the other affordability issues.”
Sen. Kevin Cramer (R-N.D.), in an interview before Friday’s announcement, predicted that prices would come down after the strait’s reopening and that it would matter the most in September, when swing voters start tuning in for the midterms.
“If we’re going into September and, even more, October … with super high — you know gas prices over $4 — I mean it’s going to be a problem,” Cramer said.
There were early signs of celebration from Senate Republicans Friday over the announcement that the strait had reopened, even if it’s potentially only temporarily.
“Very glad to hear the Strait of Hormuz is open, at least for the remainder of the ceasefire,” Sen. Lindsey Graham (R-S.C.) wrote on X.
Sen. Bernie Moreno (R-Ohio), also took a victory lap: “Will Dems be making comments about the massive drop in oil prices?” he asked.
Trump has suggested that he is eager to negotiate a deal to end the conflict. And GOP lawmakers have largely deferred to Trump so far — including defeating attempts in both chambers this week to limit the president’s ability to carry out additional military action without Congress.
But even with oil shipments through the strait set to resume now, some Republicans say generally, they want to see the president focusing more on affordability issues.
“I would like to see the president spend 70 percent of his time talking about all the things that we and he have done to reduce the cost of living and 30 percent of his time on other important stuff,” Sen. John Kennedy (R-La.) said in an interview.
Congress
GOP hard-liners threaten to tank FISA vote
House GOP hardliners are threatening to tank the FISA rule shortly on the House floor as Speaker Mike Johnson tries to force through a five year extension, according to four people granted anonymity to speak about plans not yet public.
They’re livid over the “inexplicable 5 year extension, the fake warrant requirement, and the walk back of the promise from this afternoon to include CBDC,” according to one of the people, referring negotiations to prohibit a central bank digital currency.
Congress
‘The original sin:’ Hill Republicans blame White House for slow-walking FISA sales pitch
A messy GOP battle over a key government spy authority boiled over in the House this week — but the crisis was months in the making.
White House officials and Republican Hill leaders have tried to pressure GOP hard-liners into approving a clean, 18-month extension of Section 702 of the Foreign Intelligence Surveillance Act that President Donald Trump demanded. But amid a GOP rebellion on Capitol Hill, Speaker Mike Johnson Thursday afternoon punted a vote on the measure for the second day in a row.
The program expires Monday night. Senators went home for the weekend as Johnson continued to pursue a compromise with the holdouts for an extension as long as three years with reforms, and raced to hold a vote.
Now, the finger-pointing among Republicans is rampant and temperatures are running high.
A band of House ultraconservatives — who have long been concerned that warrantless government surveillance of foreign individuals could sweep up data on Americans — shot down Trump and GOP leaders’ long-held plans for the 18-month extension with no reforms earlier this week.
“A clean extension ain’t going to move on the floor,” Rep. Chip Roy of Texas, one of the head House GOP holdouts, warned earlier this week.
In interviews with more than two dozen Republican lawmakers and aides on Capitol Hill involved in the talks, many of whom were granted anonymity to speak freely about the contentious policy debate, the consensus is that the White House is largely responsible for the current breakdown as GOP factions snipe and assign blame.
“This is why we shouldn’t wait until the last minute on these things,” one House Republican fumed Thursday. A congressional GOP aide added, “The White House was too late to come to a decision. That was the original sin.”
A senior White House official disputed the characterization from some Hill Republicans that the administration had taken too long to plead their case. They pointed to a briefing in the Situation Room months ago with Republican lawmakers, during which “the president heard arguments on both sides of the issue.”
The official added, “We’ve had multiple briefings from senior officials, both on the House and Senate side, about the desirability of this program. Again, going back months ago.”
Trump told House Intelligence Chair Rick Crawford (R-Ark.) and House Judiciary Chair Jim Jordan (R-Ohio) that he wanted a clean extension, without reforms, in February. The president arrived at this position, a second White House official said, after “the administration completed a policy process through the interagency and advised POTUS that a clean extension was the best course and solicited views on length from Blue Light News.”
There was also coordination between the White House and Capitol Hill, according to three people familiar and the senior White House official: Johnson requested the reauthorization run for 18 months, and Trump agreed.
The administration succeeded in convincing Jordan, who had previously pushed for changes to Section 702, to publicly support a clean extension following a White House meeting on the subject.
But ultraconservatives on Capitol Hill were harder to convince, with some House Republicans correctly predicting two months ago they were going to have issues as the vote drew nearer. Trump has forced those hard-liners to cave in recent months on other fights, but the spy powers legislation was one area where members have not been as willing to relent.
While Trump officials made outreach to members at least two months ago, Hill engagement ramped up in the days leading up to the scheduled vote. That has included appeals to lawmakers from CIA Director John Ratcliffe, Deputy CIA Director Michael Ellis and Joint Chiefs Chair Gen. Dan Caine, according to five people. Ellis has made personal phone calls to members, according to two people familiar with the pressure campaign.
White House deputy chief of staff James Blair, White House Legislative Affairs chief James Braid and other legislative affairs officials have also been calling individual House Republicans and working through negotiation details, according to six other people with direct knowledge of the conversations.
Noticeably absent from this outreach is Director of National Intelligence Tulsi Gabbard. Her office plays a statutory role in overseeing Section 702 and has historically been a key proponent of the powerful spy powers.
Gabbard in early February expressed concerns to Trump about reauthorizing the statute without additional privacy guardrails, as Blue Light News reported earlier Thursday, though her appeal appears to have been unsuccessful.
And while the administration’s position on Section 702 came into focus in February, there were signs earlier in the month that its position had not fully crystallized. Officials meeting with the Senate Intelligence Committee at that time refused to divulge the White House’s stance on extending the surveillance power and adding reforms, according to five people with knowledge of the meeting. The exchange frustrated Republicans and Democrats on the panel, who are generally supportive of the surveillance program.
Due to a quirk in the law, the administration will still be able to operate the program for nearly a year even if it is not renewed, and privacy advocates have argued that Monday is a false deadline. But without the law on the books, communications providers like Google and AT&T, which the government tasks to surveil foreign messages, could stop complying with those orders.
But White House officials want an extension codified now, all the same. They have been arguing in conversations with lawmakers that the country is at war and national security is paramount amid threats from Iran. Therefore, they say, hardliners should fall in line to back the clean extension without delay, according to five people involved in the conversations.
“The program is critical for the United States military to listen to the conversations of foreign terrorists abroad while we are engaged in a military operation in Iran. That’s what we’ve been telling individuals, as well as the elevated threat levels around the world, as well as the threat from Mexican drug cartels,” the senior White House official said.
Two groups of House GOP hard-liners, after being summoned by Trump Tuesday night, met with officials at the White House. But some of the Republicans declined the invitation.“I’ve heard everything that the executive has to say on FISA,” Freedom Caucus Chair Andy Harris (R-Md.) said in an interview that evening. That meeting, however, marked a shift: Those House Republicans who went to the White House alongside GOP leaders — among them Roy and Reps. Keith Self of Texas, Byron Donalds of Florida, Clay Higgins of Louisiana, Morgan Griffith of Virginia and Warren Davidson of Ohio — took the opportunity to begin negotiations about a framework for a possible agreement around the use of warrants to access certain information.
The discussions included how the White House and GOP leadership needed to make good on a months-old promise to advance legislation that would ban a central bank digital currency. Enough House GOP holdouts late Thursday evening were threatening to still tank the procedural vote to advance the extension if the White House didn’t address the digital currency matter, according to four people with direct knowledge of the matter. “Unless it’s included, there’s enough votes to kill the rule,” Rep. Ralph Norman (R-S.C.) said in an interview Thursday afternoon. But other Republicans, White House officials and Senate GOP leadership are warning that attaching the measure directly would tank the FISA bill.
In exchange for making these concessions, GOP leaders and the White House have been pushing for a Section 702 extension that’s longer than 18 months and closer to three years.
The senior White House official also said Thursday the administration has “focused in on potentially having conversations about reforms to the program that we think would strengthen protections for American civil liberties … those conversations are ongoing.”
Jordan, meanwhile, has been helping build support for a clean extension by privately telling some Republicans that, if they can pass this 18-month clean extension now, they could potentially work on warrant reforms later, according to three people with direct knowledge of the discussions. That’s raised some eyebrows internally among House Republicans.
The House delays are leaving barely any time for the Senate to act. Majority Leader John Thune said in an interview Thursday that he’s already started having conversations with his own members about what they would need to clear a FISA extension Monday.
Ultimately, even if GOP leaders strike a deal on changes to the current proposed extension, it could risk support for reauthorization among key Democrats, who Republicans will need to pass the final legislation in a narrowly-divided House. While some House Democrats are expected to help Republicans get the final bill across the finish line — including top Democrat on the House Intelligence Committee, Rep. Jim Himes of Connecticut — Democratic leaders have so far declined to shore up the votes for any fast-tracked process.
“I am deeply skeptical of a straightforward extension,” House Minority Leader Hakeem Jeffries said Thursday, adding he told Johnson a few days ago there was “great Democratic skepticism” on a clean extension.
One Democratic Hill aide said Johnson and Trump did far too little to coordinate their pitch with Democrats, who carried a razor-thin vote to re-up the law in 2024.
“They never came to us,” the aide said.
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