Senate unveils budget resolution with less draconian health cuts

Modern Healthcare – Wednesday, April 2, 2025
By Michael McAuliff

The Senate Budget Committee unveiled a budget resolution Wednesday that could pave the way to less draconian cuts in health programs than House lawmakers previously proposed.

The Senate proposal includes the House’s earlier recommendations that could lead to billions in health program cuts — but it also includes instructions for the Senate to go a different route while renewing tax cuts passed during President Donald Trump’s first term. The upper chamber’s resolution would delay sorting out differences with the House.

The Senate’s budget resolution and negotiations with the lower chamber could provide for greater flexibility around healthcare cuts, which moderate Republicans in the House said they would not support if they were too steep. It also means the healthcare sector will have to wait to see what healthcare cuts — or spending — could be on tap until the Senate has done its work.

The House budget resolution passed in February seeks to cut $880 billion from the jurisdiction of the Energy and Commerce Committee, which oversees the major health spending programs.

The Senate version allows the House to pursue renewing the tax cuts, but takes two steps that could soften the blow to healthcare.

First, it proposes a budget accounting method that allows the Senate to ignore most of the deficit impact of renewing the tax cuts. Senate leaders are using what is known as a current policy baseline to forecast deficits, rather than the normal current law baseline.

The law says most of the tax cuts expire this year, and the Congressional Budget Office estimated it would cost $4.6 trillion to extend them for 10 years, along with some business tax breaks that have already expired. But by choosing the current policy as a baseline — which includes the tax cuts as they stand — Republicans could extend the tax cuts while avoiding the addition of $3.8 trillion to the deficit.

Democrats derided that math as “magical.”

On top of that, the Senate resolution would direct the Finance Committee to add up to $1.5 trillion to the deficit. That means Senate Republicans are giving themselves a combined $5.3 trillion to extend tax cuts and deal with healthcare and other priorities from the Finance Committee.

The resolution would also allow some $500 billion in new spending to fund defense, border, energy and other priorities of Trump, which would boost the full deficit impact to about $5.8 trillion.

Senate Finance Committee Chair Mike Crapo (R-Idaho), whose committee has jurisdiction over Medicare and Medicaid, praised the agreement as a way to preserve the tax cuts passed in the first Trump administration. He did not mention health policy priorities.

At the same time, the Senate resolution would ask the Senate Health, Education, Labor and Pensions Committee to come up with at least $1 trillion in savings. That could be spread across more than health programs, including agencies such as the Department of Education, which the Trump administration is already trying to eliminate.

The new resolution gives committees in both chambers until May 9 to submit plans to their respective budget committees. The Senate would have to pass its resolution quickly to allow time for committees to work.

Senate Minority Leader Chuck Schumer (D-N.Y.) slammed the resolution as a plan to cut healthcare spending and explode the deficit in order to help the rich.

“As Americans start to feel the pain from the brazen Republican cuts, Republicans are running full speed ahead to pass their plan to gut vital programs, throw Americans off Medicaid, to give massive tax breaks to billionaires, ” Schumer said in a statement, referring to Trump’s ongoing attmepts to cut agency spending, including the Health and Human Services Department.

Some House lawmakers have already raised objections to the use of a current policy baseline. House Speaker Mike Johnson (R-La.) will have to find a way keep nearly all of them on board with the final budget resolution if it is to advance. Several deficit hawks in the Senate have also raised objections. Thune can afford to lose three Republican votes in a body the GOP controls 53-47.

Some Republicans who would like to get the process started were also wary of using the current policy approach.

Sen. Thom Tillis (R-N.C.) noted that even with the extra spending room, Republicans still would have to find savings. “There’s still trillions of dollars that have to be offset, in my opinion,” Tillis told reporters.

Democrats are also likely to challenge the approach if it ever comes to the floor.

Under the budget reconciliation process that Republicans are using, the budget bill cannot be filibustered in the Senate. However, all the components have to meet rules and precedents that the Senate parliamentarian would determine.

Tillis said he believed that leaders took that into consideration, but an adverse ruling from the parliamentarian could derail the budget effort.

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