Senate Republicans faced a significant setback in their efforts to pass a major tax and spending package. This happened when a key provision regarding Medicaid was ruled out of order by the Senate parliamentarian. This ruling jeopardizes their plans to hold a vote by the end of the week.
The parliamentarian, an impartial official who helps determine which provisions can be included in fast-tracked legislation, stated that the GOP’s proposed changes to how states tax Medicaid providers did not comply with the rules for passing the bill with a simple majority. This provision was crucial for offsetting the costs of tax cuts included in the bill.
Just a day before, Senate Republicans had introduced a $15 billion fund aimed at stabilizing rural health care, which was intended to counterbalance the cuts to provider taxes that are essential for many states’ funding. However, Democrats celebrated the parliamentarian’s ruling as a victory, claiming it removed over $250 billion in health care cuts from the Republicans’ proposal.
Senator Ron Wyden, the top Democrat on the Senate Finance Committee, criticized the bill, calling it "rotten to its core" and vowed to continue fighting against cuts that would negatively impact Americans. He pointed out that the ruling was a significant win for Democrats.
Republicans, however, are not giving up. They plan to revise certain provisions to comply with the parliamentarian’s guidance. Some GOP officials downplayed the importance of this setback, insisting that they can still move forward.
Medicaid has proven to be a contentious issue in this legislation. One particular change would reduce the tax states impose on Medicaid providers from 6% to 3%, which would significantly decrease tax revenue for states. Critics warn that this could create serious challenges for rural hospitals that depend on these funds.
The parliamentarian also flagged other provisions, including restrictions on Medicaid coverage for gender-affirming care and denials of coverage for some non-citizens. With the deadline approaching for a vote, Republicans are under pressure to finalize the legislation and send it to President Trump by July 4th.
Despite making several adjustments to the bill, key issues remain unresolved, particularly regarding funding for rural hospitals. Some senators, like Susan Collins, have argued that the proposed stabilization fund is insufficient and warned against rushing to a vote without fully addressing these concerns.
Senate Majority Leader John Thune can afford to lose only three GOP votes to pass the bill. Fiscal conservatives like Senators Ron Johnson and Rand Paul have expressed worries about new deficit spending and may vote against the plan. Even if Thune manages to resolve the issues within the Senate, divisions among House Republicans could still derail the bill.
Thune has called on Trump to help rally support for the legislation, hoping that pressure from the White House will encourage party members to back the proposal. As the situation develops, both parties will be watching closely to see how these negotiations unfold.