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The looming budget question: Will Medicaid cuts fund tax cuts?

10 18
14.03.2025

The challenge of restoring fiscal responsibility will be on full display in the months ahead following the passage of the House of Representatives budget resolution for the 2025 fiscal year on Feb. 25.

It set the stage for legislation that can circumvent the Senate’s 60-vote threshold and pass with a simple majority. While it does not include specific changes to spending and taxes, it specifies which House committees should finance deficits in reconciliation legislation and by how much.

The FY2025 House Budget Reconciliation Instructions call for decreases in mandatory spending of $2 trillion over 10 years. Of this total, $880 billion is slated to come from the Energy and Commerce Committee that oversees Medicaid, a joint federal and state health insurance program for 72 million low-income and disabled Americans. The benefits include nursing home care, personal care services and assistance paying for premiums and other costs.

Congressional Republicans are willing to tackle Medicaid because they believe the program has moved far past its original design of aiding the poor and disabled into one that assists able-bodied, working adults with lower incomes. However, President Trump has sent mixed signals about whether he is on board to cut Medicaid. House Speaker Michael Johnson (R-La.) has stated that any cuts in the program would deal with “fraud, waste and abuse.

Medicaid outlays have increased by more than 200 percent since the

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