Republican infighting over Medicaid work requirements and raising the state and local taxes cap is threatening to derail the “one big beautiful” reconciliation bill.
There are currently enough Republican detractors to sink the bill’s markup in the Budget Committee on Friday.
While all 11 committees in the House, tasked with cutting $1.5 trillion to offset the cost of preserving President Donald Trump’s 2017 tax break, were able to pass their portions out of committee, there are enough Republican detractors to sink the bill’s markup in the Budget Committee, where the individual pieces are put together, on Friday.
Combined with absences within the GOP conference and a few fiscal hawk holdouts who are displeased with the work requirements’ effective date and ambiguity over raising the SALT cap, the bill is set up to face a grim fate.
Due to slim margins, Republicans can only afford to lose one or two GOP votes, depending on attendance. If Rep. Brandon Gill (R-TX), who sits on the committee, remains absent due to paternity leave, the Budget Committee can only afford to lose one GOP vote. If Speaker Mike Johnson (R-LA) is able to convince Gill to return to Capitol Hill, the GOP can afford to lose two votes.
But Reps. Chip Roy (R-TX), Ralph Norman (R-SC), and Andrew Clyde (R-GA), all who sit on the Budget Committee, are all currently “no” votes on the reconciliation bill. Norman told reporters he needs answers on three areas: work requirements, the SALT cap, and the phasing out of the Inflation Reduction Act, several of which do not scale back until after 2028 or later.
“My point is we need to have answers before it hits the floor,” Norman said. “Is SALT going to be raised from 10 to 30, is it gonna be raised to 100, and how is it gonna be paid for? That’s my whole issue.”
House leaders and Budget Committee Chairman Jodey Arrington (R-TX) said they are still planning to hold the markup on Friday as of Thursday afternoon, though Arrington admitted to reporters there are “potentially enough [no votes] to delay.”
Some fiscal hawks have raised eyebrows at the suspicious timing of provisions in the “one big beautiful” bill, specifically work requirements beginning in January 2029.
“If you’re cutting it out in 2029, why not now? Now look, this country is on a financial collision course—we don’t have the time,” Norman told the Washington Examiner.
The initial wave of impact and the lingering aftereffects from the Medicaid reforms wouldn’t be felt until after 2028, a consequential presidential year when Trump will be on his way out of the White House, and several House Republicans will have already been reelected twice in the trifecta.
“Spending cuts that don’t kick in for 4 years seem awfully specific… #swamp,” Roy tweeted.
Other GOP holdouts, like Reps. Kat Cammack (R-FL) and Rich McCormick (R-GA), also hinted at 2029 being an intentional political strategy.
“I mean, you can guess,” Cammack told the Washington Examiner when asked why she thought the effective date was delayed.
“I think it probably does have something to do with that,” McCormick agreed.
“This is going to come to pay not this presidency, but next presidency when Social Security, Medicare, Medicaid, and the budget crisis, all come to a crashing end and we’re no longer able to get anybody to buy our debt,” the Georgia Republican added.
Among the work requirements is a “community engagement requirement” that mandates people enrolled in the program participate in volunteer work or a related educational program for at least 80 hours a month. Recipients would have to verify their engagement eligibility twice a year and undergo a more vigorous income verification process.
“I couldn’t believe it when I read those were the provisions that the work requirements were supposed to be the core engine of Medicaid reform, which isn’t good enough,” Roy said on CNBC on Thursday. “You have to deal with Medicaid.”
Experts have hinted at a broader reason for delaying until 2029 — states simply need more time. Jennifer Tolbert, director of state health policy and data and Medicaid program specialist for the healthcare think tank KFF, told the Washington Examiner that delaying implementation of work requirements would give states more time to establish systems for verifying enrollee compliance with the work requirements provisions, including the multitude of exceptions.
“It’s not exactly clear now how states would set up and design their systems to be able to identify who would qualify for exemptions, or how they would verify compliance with some of the requirements using available data sources,” Tolbert said.
But fiscal hawks have been dead set on seeing immediate “pay fors” now rather than years down the road, concerned that leadership will kick cuts down the road and not deal with them until it’s too late, all while adding to the deficit.
Majority Leader Steve Scalise (R-LA) told reporters that he “absolutely” thinks moving up the effective date for work requirements could get holdouts like Roy and Norman on board.
“We haven’t worked out those final details yet, but I think you can expect it to move up,” Scalise said.
Energy and Commerce Committee Chairman Brett Guthrie (R-KY) told reporters he’s “happy with where they are” regarding the work requirement effective date of 2029, but “we’ll have to continue to talk with our colleagues and see where we need to go.”
Not all Republicans are concerned about the 2029 date. SALT Republicans from blue states, such as Reps. Nick LaLota (R-NY) and Mike Lawler (R-NY), are more focused on raising the SALT cap from the proposed $30,000 increase. Both LaLota and Lawler have said that this cap, though tripling from the current number, is still too low, and they will not vote for the reconciliation package unless they see changes.
“Having able-bodied adults work, I think, is a thing that most Americans support,” LaLota said. “When that starts, to me, is not that consequential.”
Rep. Don Bacon (R-NE) told the Washington Examiner he’s not opposed to shifting the 2029 date to be sooner, but it’s not a “burning platform” for him.
But Bacon said he thinks holdouts, particularly those from the Freedom Caucus demanding more cuts for a higher SALT cap, are “moving the goalposts” and should be satisfied with where they are.
“If people are making their targets, the chairmen of the committees, don’t move the goal posts,” the Nebraska Republican said. “If they can do the SALT within the targets, don’t say you have to have more cuts.”
DEMOCRATS BALK AT WORK REQUIREMENTS FOR MEDICAID AND SNAP BENEFITS
“If you move the goal post,” he added, “that would be very damaging because we’ve all played by good faith to make this happen.”
Lauren Green and Gabrielle Etzel contributed to this report.