Speaker Mike Johnson announced Tuesday that House Republicans would not pursue one of the more aggressive options for cutting costs of the Medicaid program. The decision came amid pressure from moderate members of the party.
Mr. Johnson stated House Republicans had ruled out lowering the amount the federal government pays states to care for working-age adults who became eligible through the Affordable Care Act's Medicaid expansion. He also suggested leaning against changing federal payments to a flat fee per person instead of a percentage of medical bills.
The retreat acknowledges that many House Republicans view these ideas as politically difficult. It highlights the challenge for Mr. Johnson's conference to find Medicaid cuts that meet spending targets and win enough votes to pass.
The move drew swift opposition from ultraconservative Republicans. This public reaction serves as a reminder that Mr. Johnson's efforts to satisfy mainstream lawmakers could cost support from his right flank. That potential loss could jeopardize President Donald Trump's broader tax and spending plan in the House.
Meanwhile, a group of thirty-two House Republicans are demanding that leadership adhere to strict spending cuts within the legislative package designed to enact President Donald Trump’s domestic policy agenda. Led by Budget Committee Vice Chair Lloyd Smucker of Pennsylvania, the lawmakers wrote in a letter to Mr. Johnson and House Majority Leader Steve Scalise that the reconciliation bill "must not add to the deficit." Signers include members of the Ways and Means Committee and the House Freedom Caucus chair, Rep. Andy Harris of Maryland.
The letter ties proposed tax cuts to spending reductions. It dictates that the Ways and Means Committee can cut taxes by $4.5 trillion only if lawmakers cut spending by $2 trillion. If spending cuts fall short, tax reductions must scale back dollar-for-dollar.
Reducing tax cuts below $4.5 trillion could hinder House Republicans' ability to make Trump’s 2017 tax cuts permanent. This also creates potential conflict within the Ways and Means Committee itself, where Chair Jason Smith of Missouri has sought more room for tax cuts than allowed by budget parameters set by members like Mr. Smucker and House Budget Chair Jodey Arrington of Texas.
Members and leadership are currently working to meet a self-imposed deadline, negotiating how deeply to cut programs like food assistance and Medicaid. Conservatives advocate for substantial cuts to achieve major savings, while moderate Republicans warn against reductions that could affect Americans relying on benefits. Blue-state Republicans are also debating an income cap for the state and local tax deduction.
Mr. Smucker's group argues that the House budget resolution assumes economic growth from extending the 2017 tax cuts will generate $2.5 trillion in additional revenue. "This means that all additional tax cuts or increases in spending above this level must be offset," the letter states.
The conflict over Medicaid spending reflects a broader divide within the Republican party regarding fiscal policy and the path forward for the party agenda.
"Well - I haven’t ruled it out," Representative Chip Roy, Republican of Texas, said on social media following Mr. Johnson's comments about abandoning the idea of cutting back federal payments for certain Medicaid beneficiaries. "It’s necessary to stop robbing from the vulnerable to fund the able-bodied."
