The Senate version of legislation to enact President Trump’s agenda is hitting new turbulence as conservatives led by Sens. Ron Johnson (R-Wis.), Rick Scott (R-Fla.) and Mike Lee (R-Utah) are demanding deeper spending cuts to address the nation’s $2.2 trillion annual deficit.
Senate Majority Leader John Thune (R-S.D.) has focused this week on addressing the concerns of Senate GOP colleagues such as Sens. Josh Hawley (Mo.) and Lisa Murkowski (Alaska), who raised alarms about cuts to federal Medicaid spending.
But Thune has to worry about his right flank as Johnson and his allies are threatening to hold up the bill unless GOP leaders agree to deeper cuts to federal Medicaid spending and a faster rollback of the renewable energy tax credits enacted under former President Biden.
Johnson, Lee and Scott are threatening to vote as a bloc against the bill next week unless it undergoes significant changes.
Thune plans to bring the bill to the floor Wednesday or Thursday next week, but he may not have enough votes to proceed on the legislation, Republican senators say.
“There’s no way I vote for this thing next week,” Johnson told reporters.
“I don’t want to go the Nancy Pelosi route, ‘You got to pass this bill to know what’s in it,’” he added, referring to the Democratic Speaker emerita who represents California.
Johnson noted senators are taking a closer look at a proposal offered by Scott to significantly reduce the Federal Medical Assistance Percentage (FMAP), or the federal government’s share of Medicaid spending, in states that expanded the program under former President Obama’s Affordable Care Act (ACA).
Lee is pushing for a fuller phaseout of the renewable energy subsidies enacted by Democrats in the Inflation Reduction Act (IRA).
“Mike is handling the IRA provisions of this, Rick Scott is handling the Medicaid. You need to satisfy those two, too. All three of us have to be yes or none of us are yes,” Johnson said.
Scott, who founded the Columbia Hospital Corp. and went on to run Columbia/HCA Healthcare Corp., one of the world’s largest health care companies, wants to dramatically cut the 90 percent federal match for states that expanded Medicaid under the ACA.
“The focus should be on: How do we take care of what Medicaid’s original purpose was? It’s children and the chronically ill,” he said.
Scott argues able-bodied low-income adults are drawing far too much of Medicaid spending in states that expanded the program, such as California and New York.
“Half the people, half the adults that are on Medicaid under the expanded FMAP are not working,” he said, adding they are also nondisabled. “We’re running $2 trillion deficits.”
Scott says Medicaid shouldn’t pay out more than Medicare and that states should not be eligible for expanded federal Medicaid payments for new enrollees after two years.
He also wants to further crack down on states’ use of health care provider taxes to increase their share of federal Medicaid spending.
That sets up a fight next week with Senate Republican colleagues who have balked at the cuts to Medicaid spending unveiled Monday by Senate Finance Committee Chair Mike Crapo (R-Idaho).
The current Senate bill would reduce the maximum permitted provider tax rate from 6 percent to 3.5 percent by 2031.
The Florida senator said colleagues such as Hawley and Sen. Susan Collins (R-Maine), who are worried about limiting health care provider taxes, have a “legitimate concern” about the fate of rural hospitals. But he argued the high rate of Medicaid spending won’t solve their problems.
Collins has proposed a “provider-relief fund” to the bill to help offset Medicaid cuts for rural hospitals, nursing homes and community health centers.
Lee, the Utah Republican, meanwhile, is calling for a more rapid and complete phaseout of renewable energy subsidies in the bill and for tougher language to keep tax benefits from going to immigrants who entered the country illegally.
“Green New Deal subsidies that don’t terminate by 2028 will effectively become permanent. If you don’t want them to be permanent, tell your senators!” Lee posted on the social platform X.
Language released Monday by the Senate Finance Committee would extend tax credits for hydropower, nuclear and geothermal energy into the 2030s.
A faster and broader phaseout of clean energy subsidies would be opposed by Republican senators such as Murkowski, Jerry Moran (Kan.), John Curtis (Utah) and Thom Tillis (N.C.), who warn that a sudden termination of federal support would disrupt the renewable fuel industry, cost jobs and strand billions of dollars in investment.
Yet Senate conservatives are ready for a showdown, arguing the deficit poses a major threat to the U.S. economy.
“The deficit will eat us alive if we don’t get it under control. If not us, who? If not now, when?” Lee posted Thursday on X.
Johnson said Trump promised to balance the budget but argued “the bill before us does not do it” and will instead worsen deficits over the next decade.
He said while the spending cuts in the legislation are “the most spending reduction we’ve had ever,” the “spending increase is unprecedented, 10 times more.”
“Look at the numbers,” he said.
The Congressional Budget Office unveiled a new projection that the House-passed bill to enact Trump’s agenda would add $3.4 trillion to the debt.
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