The House narrowly approved a Republican budget plan Tuesday that includes massive tax cuts and additional border wall funding that could be paid for, in part, with controversial cuts to Medicaid spending—though the specific details of the spending plan are in flux.
President Donald Trump speaks during a cabinet meeting at the White House in Washington, DC, on ... [+]
The House approved the budget in a 217-215 vote Tuesday night largely along party lines, with Rep. Tom Massie, R-Ky., the sole Republican siding with Democrats against the resolution.
The plan calls for $4.5 trillion in tax cuts over the next decade, $2 trillion in cuts to government programs, $300 billion for border security and defense spending and a $4 trillion debt limit increase.
The plan is merely a framework that tasks the relevant House committees with drafting spending plans for the areas of government they oversee in accordance with the topline figures approved Tuesday.
The Senate must approve the plan and could make modifications before doing so, which would send the bill back to the House.
The Senate approved its own budget plan, that omits tax policy, leaving it for a later date, and it’s unclear when they could vote on the House plan, and at least one GOP senator, Josh Hawley, R-Mo., has expressed some reservations, telling Politico “There is going to be a lot of concern about the Medicaid cuts.”
The spending plan calls for the House Energy and Commerce Committee to cut $880 billion from programs it oversees over the next decade, which can’t be achieved without cutting Medicaid, even if the committee cuts all other programs down to $0. Some Republicans, however, have argued Medicaid spending can be reduced by rooting out waste and fraud they say exists in the program, while Trump has vowed there will be no cuts to Medicaid under his administration. The House Ways and Means Committee, for example, suggests up to $35 billion in savings could be found by barring non-citizens from “federal health care programs, including advance premium tax credits and Medicaid.”
It instructs the House Ways and Means Committee to increase the debt limit by $4 trillion, from $36.1 trillion to $40.1 trillion. The federal government reached its borrowing threshold in January, triggering the Treasury Department to take “extraordinary measures,” or a series of accounting maneuvers, to continue paying its bills, which former Treasury Secretary Janet Yellen warned would expire in mid-March. The budget would actually increase the debt more than current Congressional Budget Office projections, according to the non-partisan Center on Budget and Policy Priorities, and even with the debt limit increase, the federal government would surpass its borrowing limit sometime late next year.
The $4.5 trillion in tax cuts the spending plan calls for are contingent on $2 trillion in program cuts. If lawmakers are unable to achieve the $2 trillion in program cuts, the tax cuts would be reduced by the leftover amount. The majority of the tax cuts would come from an extension of Trump’s 2017 tax law, which will cost about $4 trillion over the next decade. Separate from the extension of the 2017 Tax Cuts and Jobs Act, Republicans will be tasked with drafting budget parameters to achieve Trump’s goal to eliminate taxes on tips, Social Security and overtime, the latter of which could cost $750 billion over the next decade, according to estimates from the House Ways and Means Committee.
It calls for $300 billion for border and defense spending over the next decade. The House Ways and Means Committee has floated $18 billion for 734 miles of new border wall, plus $17.8 billion for other barriers, and has also suggested hiring 3,000 new border officials, which would cost $12.6 billion over the next decade, according to a list of potential spending priorities.
House Passes Budget Bill: Trump Touts ‘Big First Step’ For Mike Johnson (Forbes)
Medicaid Cuts Threaten A Key House Vote On Trump’s Agenda Today—Here’s Why The GOP Is Divided (Forbes)