Senate Republican leadership has a big hill to climb to get the president’s tax and budget package over the finish line by the Fourth of July. The text was released on Monday night, June 16, and already two members have stated they’ll vote against it, while more have indicated they’ll not support it without significant changes.
“This is not at all, at all, what we were told would be in this bill,” Sen. Josh Hawley, R-Mo., told reporters Tuesday, June 17.
Republicans need 51 votes to get it through the Senate. They only have 53 members, given that they won’t receive a single vote from Democrats.
Changes to Medicaid funding
The Senate bill lowers the Medicaid provider tax from the current 6% to 3.5% by 2031. The House did not lower the tax but did block states from raising it.
A provider tax is a tax on health care providers like hospitals and nursing homes, which states use to fund their Medicaid programs. As long as states follow the criteria, the federal government will match those funds.
At least four senators have spoken out against these types of changes to Medicaid.
“There’s nothing in here for rural hospitals. In fact, what they’re doing is lowering the provider tax to make it even worse,” Hawley said. “So it’s like we’re defunding rural hospitals in order to pay for extension to the Green New Deal.”
Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, told reporters the provider tax does not impact hospital viability.
“In fact, the provider tax and the state directed payments are often used to pay institutions that have the best connections to the government of the state. Not necessarily the hospitals that need the help most,” Dr. Oz said at the Capitol Tuesday.
Leadership contends that states use the provider tax and state directed payments as the dominant funding mechanism for their programs, which makes it easy to game the system.
“The provider tax, state directed payments are important reforms. And we think they rebalance the program in a way that provides the right incentives in a way that covers the people who are supposed to be covered by Medicaid,” Majority Leader John Thune, R-S.D., said.
Multi-trillion-dollar deficit increase
Some fiscal hawks like Sens. Ron Johnson, R-Wis and Rand Paul, R-Ky., said they can’t support a bill that is projected to add up to $5 trillion to the national debt over the next ten years.
“I could vote for the bill to make the tax cuts permanent. I think it’s good for the economy. But I can’t vote to add $5 trillion,” Paul told reporters.
Should this bill be approved in the Senate, the House will present its own challenges. Blue-state Republicans there said it’s dead on arrival unless the state and local tax deduction is quadrupled.
