Senate Republicans Propose Tougher Medicaid Cuts and SALT Changes in Trump’s Bill

Senate Republicans introduced a bill proposing steeper Medicaid cuts and new work requirements for parents, aiming to make Trump’s tax breaks permanent. The draft maintains a $10,000 SALT deduction but faces pushback from GOP lawmakers from high-tax states. The plan showcases a large influx of tax benefits for wealthy households while potentially deepening deficits and uninsured individuals. Criticism surrounds these changes, as many Americans favor robust funding for safety net programs.

In a move that could significantly reshape the future of Medicaid and tax policies, Senate Republicans put forward a new bill on Monday. The proposed legislation includes deeper cuts to Medicaid, notably introducing work requirements for parents with teenagers, aimed at offsetting costs and making President Trump’s tax breaks permanent. The draft has drawn early criticism from some GOP members in high-tax states, like New York, who want a higher state and local tax (SALT) deduction than the current $10,000 cap.

The Senate Finance Committee’s draft also proposes a new $6,000 tax break aimed at low- to moderate-income senior households earning below $75,000 for individuals and $150,000 for couples. This comprehensive overview showcases how the Senate’s objectives clash with House-approved provisions. Senate leaders hope to push for a vote by the Fourth of July deadline, even amidst potential roadblocks from their own ranks.

Chairman Sen. Mike Crapo of Idaho emphasized the proposal as a way to prevent tax hikes and noted that including savings from green energy programs could help achieve “significant savings” while targeting waste and fraud. But public sentiment appears to lean toward maintaining funding for critical safety net programs, as recent polls indicate widespread support for Medicaid and food assistance.

The heart of Trump’s proposal entails preserving approximately $4.5 trillion in tax breaks from his first term, which are set to expire if Congress fails to act. Besides this, there are plans for new initiatives, such as eliminating taxes on tips and cutting over $1 trillion from various programs. After the House’s passage, the Congressional Budget Office projected the bill could inflate the deficit by $2.4 trillion while leaving millions uninsured due to new work requirements.

Interestingly, the plan could benefit wealthier households, providing them with significant tax advantages, while the lower-income families may see unfavorable tax changes. Rep. Nicole Malliotakis, a New Yorker, criticized the Senate’s SALT cap, saying it “slaps in the face” to the Republican districts that supported them.

Amid this multitiered bill, the proposed Medicaid changes raise eyebrows. The new work rules expand requirements to parents of children over 14, tightening assistance eligibility for enrollees aged 18 to 64 without dependents. Stricter requirements in the Supplemental Nutritional Assistance Program align with this approach, intending to bolster what Republicans term “personal responsibility.”

Some GOP members, like Sen. Josh Hawley, voice concern about how the new provider tax plan could negatively impact rural hospitals. The provider tax, crucial for financing Medicaid programs, would see a phased reduction under the Senate’s proposal.

Senate Republicans are also trying to balance cuts to green energy initiatives and the tax provisions supporting them, while conservative factions argue that spending needs to be reduced further. The opposition to raising the national debt limit by $5 trillion indicates that internal party discussions are far from over, with many Republicans advocating for more stringent measures. As these negotiations progress, it seems a tension between financial discipline and support for essential programs will continue to challenge lawmakers.

The Senate’s new proposals indicate a turbulent road ahead for both Medicaid and tax policy as GOP leaders push for significant changes. With a mix of deeper Medicaid cuts, SALT negotiations, and various tax breaks, the balancing act of appeasing differing factions within the party and public opinion will be crucial as deadlines approach and debates heat up.

Original Source: www.pbs.org