Congressional Republicans fought tooth and nail to pass President Donald Trump’s “big beautiful bill” in early July. Not even a month later, some GOP lawmakers are eyeing ways to alter provisions in the bill or make up for absences in a “reconciliation 2.0” package that could complicate their messaging strategy.
Passing the major tax and spending cuts bill was difficult for Republicans, as it pitted fiscal hawks against centrists, the former arguing for steep slashes to federal spending and the latter pushing back, hoping to protect themselves from a politically damaging product in their swing districts or states.
In the weeks after Trump signed the legislation on July 4, a handful of Republicans are looking to rescind cuts to Medicaid that they voted for in the “big beautiful bill.” Sen. Josh Hawley (R-MO) introduced a bill that would roll back the restrictions on strategies states rely on to finance the beneficiary program, after a recent analysis found that red states may get hit the hardest.
Republicans are also aiming to reverse a gambling tax hike, alleging that the majority of the GOP had no idea it was in the bill. But changing the bill could spell disaster for Republicans, particularly as, in the House, GOP leaders are already gearing up for a second reconciliation package after barely passing the first one.
Altering the “big beautiful bill” could be a double-edged sword for Republicans. Though it may bring relief to some centrist or purple lawmakers, it also weakens the message Republicans have been pushing for weeks that the legislation is the staple of Trump’s second term and the “most consequential” bill in United States history.
Medicaid cuts were Republicans’ main target during reconciliation, arguing there was too much “waste, fraud, and abuse” weighing down the program. They’ve battled back against Democrats’ attacks that the GOP wants to cut healthcare for millions of Americans.
However, with GOP lawmakers spearheading a rollback of certain Medicaid changes, that could damage Republicans’ ability to promote the reconciliation bill ahead of a competitive 2026 midterm season.
Republicans want to roll back Medicaid restrictions, gambling tax hike
Hawley’s bill, along with rolling back the restrictions for states financing Medicaid, doubles the rural hospital fund from $50 billion to $100 billion, and extends the fund from five years to 10 years.
The $50 billion rural hospital fund was among the concessions Republican leadership agreed to to get the votes from lawmakers like Hawley, who were concerned that steep cuts to Medicaid would harm hospitals.
Hawley told the Washington Examiner he, unlike other Republicans, held an event on the “big beautiful bill” a few days after it passed.
“I just believe in being honest with the voters. They say to me, ‘Well, what about the hospital stuff?’ I just tell them honestly, ‘I don’t like that, and I’m gonna try to kill it,’” Hawley said. “I’m not gonna defend something I don’t like. I never liked it. … I’ll celebrate stuff I like. The stuff I think is not very good, I’m gonna try to get repealed.”
“Some of the people who are the most vocal cheerleaders for this behind closed doors won’t say a word about it in public, and those of us who had to fight to make this better, I’m the only one who’s out there who’s done an event,” Hawley added. “I haven’t shied away from my positions at all.”
The efforts to roll back provisions in the “big beautiful bill” are also happening on the House side. Ways and Means Committee chairman Jason Smith (R-MO), whose committee was instrumental in extending the 2017 Tax Cuts and Jobs Act, told NBC News he wants to undo a tax hike on gamblers.
Beginning in 2026, individuals will only be able to deduct 90% of their gambling losses up to the amount of their winnings. The previous law allowed gamblers to deduct 100% of their losses, up to the amount they won. Gamblers could now be taxed even in years they break even or net out losses.
For example, with the law change, someone who bets $100,000 but loses $100,000 in the same year would still receive a taxable income of $10,000.
Many professional gamblers have warned Congress that this could be a heavy blow to their industry. The nonpartisan Congressional Budget Office estimated that the change to the gambling tax will raise $1.1 billion over 10 years.
Smith told NBC News that altering the gamblers’ tax was a “mistake.”
“It was definitely not something that we did in the House. I don’t understand why the Senate decided to do something like that,” Smith said. “I’m interested in making sure that we fix the Senate’s mistake.”
Pathway to altering ‘big beautiful bill’ full of challenges
A bipartisan fix to the Medicaid cuts and gambling tax hike could be possible, but it is not likely to be an easy path.
Senate Republicans have already blocked unanimous consent for a bill from Sen. Catherine Cortez Masto (D-NV) that would roll back gambling tax deductions.
But not all Republicans are against this. Sens. Ted Cruz (R-TX) and Bill Hagerty (R-TN) signed on to a different bill from both Cortez Masto (D-NV) and Sen. Jacky Rosen (D-NV) called the Facilitating Useful Loss Limitations to Help Our Unique Service Economy Act, or FULL HOUSE Act, which would restore the full deduction.
Cruz told NBC News that most Republicans voted for the “big beautiful bill” without even realizing the gambling tax change, a claim that a handful of Republicans have stuck to as they return to their home districts or states and face unhappy crowds who were concerned about changes the lawmakers argue were slipped into the bill.
“Nobody really takes responsibility for introducing it,” Cruz told the outlet. “None of us knew about it. It’s a very big, beautiful bill, and so there are lots of provisions there that, at the end, things were moving very fast. I don’t know of anyone who was aware of the provision at the time it passed.”
Some Republicans aren’t worried about restoring the 100% gambling deduction.
“I didn’t know gamblers had so much clout,” Sen. John Cornyn (R-TX) told the Washington Examiner.
Cornyn, who sits on Senate Majority Leader John Thune’s (R-SD) leadership team, said he’s worried that rolling back the deduction will open the door to other changes.
“That would be my concern because anytime once you open up a tax bill, other people have other ideas that they want to include,” Cornyn said. “I’m not sure I’m excited about relitigating tax issues this soon.”
Senate Majority Leader John Thune (R-SD) has ruled out reversing the gambling tax hike or rolling back Medicaid cuts, telling NBC News “no” when asked if the senators’ measures would be successful.
“There are members out there who are saying, ‘We’d like to do this or that differently.’ That’s always the case,” Thune said. “This was a big piece of legislation that had a lot of moving parts. Not everybody got everything they wanted, but at the end of the day, it’s historic in its breadth and the things that it addresses.”
Sen. Mike Rounds (R-SD), an appropriator, said Republicans need to work on messaging Medicaid rather than attempting to alter provisions. He suggested senators boost constituent services to address concerns about specific people losing coverage.
“We can always go back, as long as we’ve got a majority in the House and a majority in the Senate, with the president to work on another package,” Rounds told the Washington Examiner.
“But at this point, we’ve got plenty on our plate,” the senator added, pointing to the National Defense Authorization Act, a farm bill, and appropriations bills for fiscal 2026.
Also on the horizon is the second reconciliation package, pushed mainly by House leadership and some fiscal hawks who hope to find more savings and cuts to federal programs.
House Speaker Mike Johnson (R-LA) has an ambitious timeline to pass two more reconciliation bills before this Congress session ends: one in the fall and possibly in the spring of 2026. Last week, the House Republican Study Committee launched a “Reconciliation 2.0 Working Group” to build a framework for a second megabill, taking input from committee members and outside policy groups.
Rep. Jodey Arrington (R-TX), who chairs the Budget Committee, said after the first reconciliation package passed that he does not “have a lot of hope” that a second megabill would include a ton of savings, “just because I think we maxed out a big chunk of that in this process.”
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Some fiscal hawks, like Sen. Ron Johnson (R-WI), think the conference should examine the “big beautiful bill” line by line to see what spending or tax breaks could be cut.
“We had an opportunity to make law. We made the law, and we put all this crap in there. It’s unfortunate,” Johnson said.