Stopgap funding bill averts Medicare cuts triggered by tax law

Modern Healthcare – Wednesday, November 12, 2025
By Michael McAuliff

Medicare providers won’t endure about $500 billion in cuts because of President Donald Trump’s “One Big Beautiful Bill” after all.

On Wednesday, the Republican-led Congress broke through a six-week standoff with Democrats to approve legislation that ends the government shutdown and finances federal operations through Jan. 30.

The bill includes provisions to waive budget rules that would have required the White House to offset the tax law’s $3.4 trillion in deficit spending over 10 years, including by cutting around half a trillion dollars from Medicare.

Under the Statutory Pay-As-You-Go Act of 2010, or PAYGO, new deficit spending is supposed to trigger automatic across-the-board cuts, a process known as in Washington as “sequestration.”

The House approved the stopgap spending bill Wednesday following Senate passage on Tuesday after seven Senate Democrats and one allied independent broke ranks and voted with Republicans.

The appropriations measure doesn’t specifically target Medicare cuts but instead frees the White House from identifying any spending reductions to balance the tax law’s effects on the budget.

The legislative text resets the White House Office of Management and Budget’s deficit “scorecard” to zero for the remainder of 2025.

This sweeping approach could encourage more deficit spending between now and when Congress adjourns for the year, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a news release Wednesday.

“By wiping the PAYGO scorecard in the future, it provides a blank check for lawmakers to increase deficits without facing PAYGO accountability until the end of this Congress,” MacGuineas said.

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