In a bold and controversial fiscal gamble, House Republicans are circulating a “menu” of proposed spending cuts totaling almost $6 trillion over the next decade. The plan, designed to bankroll President-elect Donald Trump’s ambitious priorities – including tax cuts and increased border security – details reductions to major federal programs, including Medicare, Medicaid, and Biden-era climate initiatives.
The early list, obtained by POLITICO, reflects the GOP’s long-standing goal of reducing government spending, though the magnitude of the suggested cuts underscores the high-stakes nature of the effort. The menu includes slashing welfare programs, revising Affordable Care Act subsidies, and rolling back green energy tax credits. While the list serves as a set of options rather than a formal proposal, it has already sparked intense internal debate among Republicans.
The people, granted anonymity to discuss closed-door negotiations, said that the list originated from the House Budget Committee, chaired by Rep. Jodey Arrington (R-Texas). Republicans involved in the reconciliation plans have been generally targeting the listed programs for several months, but internal GOP fights over trillions of dollars in potential cuts are just beginning.
The overall savings add up to as much as $5.7 trillion over 10 years, though the list is highly ambitious and unlikely to all become law given narrow margins for Republicans in the House and Senate. -Politico
The “document is not intended to serve as a proposal, but instead as a menu of potential spending reductions for members to consider,” one GOP source told the outlet.
Yet even within the Republican caucus, there is skepticism about the feasibility of achieving such drastic savings. “They all feel pretty controversial,” one senior GOP lawmaker conceded when asked if there were any particularly controversial spending offsets dividing Republicans.
House Speaker Mike Johnson is reportedly working to balance the demands of Trump’s domestic policy agenda, estimated to cost $10 trillion, with the fiscal constraints imposed by his own pledge to slash $2.5 trillion in government spending through the budget reconciliation process as part of last year’s govt. funding negotiations.
Medicaid And ACA In The Crosshairs
One of the most contentious components of the plan targets Medicaid, with proposed caps on federal spending tied to state population levels instead of maintaining the program as an open-ended entitlement. Additionally, the list suggests imposing work requirements for Medicaid recipients and aligning payments for able-bodied adults with those for low-income children and individuals with disabilities – a move projected to save $690 billion.
The Affordable Care Act (ACA) is another significant target. Republicans are eyeing $46 billion in savings by letting key ACA insurance subsidies expire and limiting eligibility based on citizenship status. These cuts, if pursued, would reignite the political firestorm that has surrounded the ACA since its inception, potentially destabilizing coverage for millions of Americans.
Cuts to Medicaid, the Affordable Care Act and the country’s largest anti-hunger program would spark massive opposition from Democrats and would also face some GOP resistance. House Speaker Mike Johnson can’t afford any Republican defections if he wants to pass a package on party lines. -Politico
Medicare is also under scrutiny, with proposed “site-neutral” payments that would equalize costs across outpatient settings – a policy that has garnered bipartisan attention but could face resistance due to concerns over its impact on providers. The list also includes repealing Biden administration health care regulations, such as minimum staffing requirements at nursing homes, which proponents argue drive up costs.
Climate Programs On The Chopping Block
Perhaps the most politically delicate area involves green energy and climate initiatives. The proposal identifies up to $468 billion in savings by repealing provisions from Biden’s climate policies, including electric vehicle incentives and elements of the bipartisan infrastructure law.
Yet, not all Republicans are aligned on this front. Eighteen House Republicans, many representing districts benefiting from clean energy projects, have warned Speaker Johnson against prematurely dismantling green energy tax credits from the Inflation Reduction Act (IRA). Technologies like hydrogen and carbon capture—viewed favorably by some GOP lawmakers—are among the measures that could be impacted.
Even proposed cuts to green energy tax credits, worth as much as $500 billion, could be tricky — as the document notes, they depend “on political viability.” Already 18 House Republicans — 14 of whom won reelection in November — warned Johnson against prematurely repealing some of the IRA’s energy tax credits, which are funding multiple manufacturing projects in GOP districts. -Politico
The challenge for Johnson and his leadership team will be corralling enough Republican votes in the House, where the GOP holds a narrow majority, while navigating the Senate’s more moderate composition. The specter of Republican defections looms large, particularly among lawmakers who represent districts reliant on federal spending for infrastructure and health care programs.
President-elect Trump’s policy blueprint has added another layer of complexity. Trump’s focus on aggressive border security measures and significant tax reductions—signature issues of his campaign—comes with a hefty price tag. His allies in Congress are preparing to meet with him in Florida this weekend to discuss next steps. The proposed cuts to Medicaid, the ACA, and climate programs signal a sharp pivot away from Biden-era policies, but they also risk political fallout that could jeopardize fragile Republican majorities.
Tyler Durden
Mon, 01/13/2025 – 17:20
