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Bloomberg
WASHINGTON – After a marathon overnight session, the U.S. Senate advanced a key piece of legislation to unlock President Donald Trump’s legislative agenda.
The resolution passed 51-48 will be the blueprint for a massive party-line bill that Republicans hope to pass without Democrats’ help through a process known as “reconciliation.” The package will eventually include Trump’s priorities for border security, domestic energy production and taxes and, if passed, will be the marquee law of his second term as president.
Republican leaders had to navigate a minefield of differing opinions within their own conference to get the blueprint across the finish line in the Senate. Some GOP senators were concerned about the future package’s potential cuts to Medicaid while others feared how much it would grow the federal deficit.
Sen. Josh Hawley, R-Mo., repeatedly raised concerns that the package included previous House instructions to cut $880 billion from the jurisdiction of the House Energy and Commerce Committee – a threshold that is likely impossible to meet without slashing Medicaid, the program that provides health insurance to 72 million low-income Americans.
But Hawley voted to kickstart debate on the blueprint Thursday night, saying that he’d spoken with Trump “for a good bit,” who “told me the House will NOT cut Medicaid benefits and the Senate will NOT cut Medicaid benefits and he won’t sign any benefit cuts.”
The House is expected to vote on the proposal next week. Both chambers must approve it before lawmakers can begin building out the legislation with actual policy. House Republicans will only be able to spare a few votes and still approve the blueprint, though they managed to do it with even smaller margins on an earlier version in February.
But the biggest fights lie ahead: The blueprint instructs the House and Senate to craft separate proposals that will eventually need to be reconciled. That will mean messy debates over taxes, benefits programs, the debt ceiling and other big-ticket items.
Here’s what to know.
What is in the blueprint?
The Senate-approved plan lays out instructions on spending toward Trump’s policy legislation. However, it includes separate instructions for the House and Senate, which must eventually be reconciled.
Republican leaders want to lock in the tax cuts implemented during Trump’s first term set to expire this year, a massively expensive endeavor that would add an estimated $3.8 trillion to the deficit over the next 10 years.
To avoid drawing attention to that price tag, Senate leaders are treating the tax cuts – which expire at the end of the year – as the norm or “current policy,” implying that extending them would appear to cost nothing.
Democrats have called the move a “gimmick” that would “upend decades of precedent” and cost Americans trillions of dollars.
They also decided to bypass the Senate’s neutral arbiter, called the parlimentarian, a nonpartisan official who would typically determine whether such maneuvers are allowed under the chamber’s complex rules. Some GOP senators are openly worried that the parlimentarian ruling could blow up the bill later – or eventually establish a precedent that could allow the majority to bypass the parlimentarian’s rulings whenever it likes.
The Senate’s plan would allow for an additional $1.5 trillion in tax cuts, leaving room for Trump’s plans to eliminate taxes on tips and overtime and other tax priorities. It requires virtually no spending cuts, but has a non-binding target of eventually finding $2 trillion in savings over 10 years.
The Senate plan would also raise the debt ceiling by $5 trillion, which would avoid a looming default on the federal debt and help Republicans avoid negotiating on the extension with Democrats.
But the blueprint also instructs the House to keep the blueprint it passed earlier this year, which required finding at least $1.5 trillion in spending cuts over the next 10 years – including the $880 billion that is likely to hit Medicaid.
Both the House and Senate would have to finalize their proposals by May 9. The two measures would then be negotiated into one package.
How might the proposal impact Medicaid?
Republicans in Congress say they want to eliminate “waste, fraud and abuse” from the Medicaid program and that they have no intention of cutting benefits for deserving recipients.
However, nonpartisan experts say there is not nearly enough fraud to make up the $880 billion the House is being asked to cut from the program and that they must cut from Medicaid if Medicare is off the table, as Trump has said.
Trump has repeatedly said that he will never cut Social Security and Medicare and has assured skeptical lawmakers that he also would not support cuts to Medicaid.
Multiple Republican lawmakers have said they would not support a proposal that reduces Medicaid benefits.
What happens next?
The plan must be approved in the House before lawmakers can begin writing the policy that will become Trump’s legislative agenda.
Trump has endorsed the Senate’s plan, which means House Republicans are likely to put aside any opposition and approve it, but the conference may require some reassurance.
The House Republican budget leader has argued the Senate plan will result in a massive increase in the deficit because the plan’s lack of mandatory spending reductions will make it easy for lawmakers to avoid potentially painful and unpopular cuts.
“If they’re not enforceable then, more than likely, it won’t happen,” Budget Committee Chair Jodey Arrington, R-Texas, told Politico.
Fiscal hawks in both chambers are already worried that Arrington is right and that counting the cost of Trump’s 2017 taxes as $0 will result in a final bill that contributes to the ballooning federal deficit.
If House lawmakers approve the resolution, lawmakers will start fleshing out their versions of the bill and navigating the politically challenging conversations around taxes and benefit cuts. While the bill has a May 9 deadline for initial plans, the final version is likely to take much longer.