Senate Republicans are rewriting changes to Medicaid after the chamber’s rules referee flagged them as out of bounds for the filibuster-proof “big, beautiful bill.”
At stake are hundreds of billions of dollars in savings that would help offset tax cuts and new spending in the massive Trump agenda package.
Republicans said the Senate parliamentarian’s rulings against a handful of key Medicaid provisions were a “bump in the road,” but they still could rewrite enough of them to salvage the most significant savings.
“It’s pretty normal to make a submission, [have the parliamentarian] say, ‘Hey, this part doesn’t work,’ and then be able to come back and be able to answer her question,” said Sen. James Lankford, Oklahoma Republican.
A few Senate Republicans, however, were angry enough that they called the parliamentarian, Elizabeth MacDonough, an “unelected bureaucrat” who should be fired or term-limited.
“I would fire her,” Sen. Tommy Tuberville, Alabama Republican, told The Washington Times. “She’s been here too long. She needs to go.”
Ms. MacDonough was appointed Senate parliamentarian in 2012 by then Majority Leader Harry Reid, Nevada Democrat, but she worked in the office for nearly a decade before that promotion.
Sen. Roger Marshall, Kansas Republican, introduced a resolution Thursday to limit Senate parliamentarians to a single six-year term, the same length senators serve before having to face reelection.
Some House Republicans called on their Senate counterparts to overrule the parliamentarian. While that technically can be done with a simple majority vote, most Senate Republicans, including Majority Leader John Thune of South Dakota, view that as a nuclear option akin to gutting the filibuster and don’t want to open that Pandora’s box.
“The parliamentarian calls balls and strikes. And the parliamentarian did the same thing to the Democrats when they wanted to change the minimum wage,” said Sen. Mike Rounds, South Dakota Republican. “Simply saying that we disagree with them is no reason that you would ever try to eliminate the position or to challenge it. You lose all credibility when you do that.”
Ms. MacDonough and her staff have been combing through the budget reconciliation package for a week now, hearing arguments from Republicans and Democrats on whether various provisions comply with the Senate’s rules for the filibuster-proof process. She issues rulings after the arguments, which are provided to lawmakers and staff but not shared publicly.
The Byrd Rule, named after the late Sen. Robert Byrd of West Virginia, says changes to law made through reconciliation must have more than a “merely incidental” impact on the federal budget, meaning the primary goal must be to shift federal spending or revenues, not make policy.
The parliamentarian found provisions in each committee’s jurisdiction that don’t comply with the Byrd Rule, but her Thursday rulings against health care portions of the bill were the most devastating for Republicans’ policy and fiscal aims.
She ruled against six Medicaid provisions, including a crackdown on state provider taxes and a move to prohibit Medicaid spending on sex-change treatments for transgender people.
The parliamentarian also found provisions to limit Medicaid for noncitizens and reduce federal funding to states that continue to provide coverage to certain categories of immigrants who do not comply with the Byrd rule.
Similarly, she ruled against provisions to prevent most categories of noncitizens from qualifying for Medicare benefits and premium tax credits that help subsidize health insurance purchased through the Affordable Care Act Marketplaces.
The rulings mean Republicans will need to remove the provisions from the budget reconciliation package, modify them into compliance with the Byrd Rule, or bring the legislation to the floor as is and face a budget point of order that requires 60 votes, and thus Democratic support, to waive.
Republicans opted to rewrite many of the provisions, which is throwing in flux their plan to begin the floor process as soon as Friday. However, several predicted they could still begin – and maybe even finish – voting on the bill this weekend.
If the GOP is unsuccessful in bringing the health care provisions into compliance, it will result in more than $250 billion in spending cuts being struck from the bill, according to Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, which has jurisdiction over Medicaid.
“The parliamentarian has made clear that reconciliation can not be used to manipulate state provider tax policies, which would have resulted in massive Medicaid cuts that hurt kids, seniors, Americans with disabilities and working families,” he said.
Even before Thursday’s ruling, a handful of Republican senators complained the Senate’s provider tax crackdown was too harsh. Some prefer the House-passed approach to freeze the taxes at current rates, which vary and are set by states.
The Senate’s proposal would force most states to lower provider tax rates to no more than 3.5% by 2031 if they want to use the revenue to pay for increased Medicaid payments to the same providers, which would inflate the cost of their Medicaid programs and the share the federal government must contribute.
The change in what is known as the “safe-harbor” limit, currently 6%, would only apply to the 40 states and the District of Columbia that expanded Medicaid under Obamacare to include low-income, able-bodied adults without dependents earning up to 138% of the poverty level. Those states receive a 90% federal contribution to cover the additional beneficiaries and thus are more incentivized to use higher provider taxes to inflate the amount of funding they receive from the federal government.
Republicans insist the provider tax provisions only require minor technical changes to be brought into Byrd compliance.
Sen. John Hoeven, North Dakota Republican, said the parliamentarian’s primary concern is that states do not have enough time to react, so lawmakers may tweak the bill to delay implementation of the provider tax changes.
He said the provisions seeking to deny most non-citizens’ access to Medicaid may be more complicated to rewrite.
“The [parliamentarian’s] rationale here is different states have different approaches,” Mr. Hoeven said. “And therefore, can the federal government say if you’re one state, you have to do it this way, and if you’re another state, you have to do it differently? Or do states have that ability to set their own programs within the overall Medicaid parameters?”
