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Category: Tax & Finance

“Big, Beautiful Bill” Passes Senate

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After a record-breaking vote-a-rama lasting over 24 hours, the U.S. Senate has passed President Trump’s expansive tax and spending reconciliation package — a major step toward his goal of signing the legislation into law by July 4. The bill encompasses the majority of the President’s legislative agenda.

The final vote was 51–50, with Vice President JD Vance casting the tie-breaking vote. Republican Senators Susan Collins (ME), Thom Tillis (NC), and Rand Paul (KY) joined all Senate Democrats in opposing the measure. Senators Collins and Tillis cited the bill’s Medicaid cuts and their potential impact on rural hospitals as key reasons for their “no” votes. A proposed amendment from Collins to establish a rural hospital stabilization fund failed in a procedural vote Tuesday morning. Tillis recently announced his decision to retire at the end of his term after facing political fallout from President Trump over his earlier vote against the motion to proceed.

For much of the overnight session, the bill’s fate remained in doubt. Republican leadership engaged in extensive negotiations with undecided senators, both behind closed doors and on the Senate floor. Republican Senator Lisa Murkowski (AK), who had withheld support for much of the process, ultimately voted in favor after securing Alaska-specific carve-outs from certain provisions in the legislation.

The legislative battle now shifts to the House of Representatives, where Speaker Mike Johnson is expected to bring the bill to a vote as early as Wednesday. The initial version of the package narrowly passed the House, where Republicans hold only a slim majority. Several members have already expressed concern over changes made by the Senate.

The conservative wing of the House GOP — particularly the House Freedom Caucus — has objected to the bill’s suspension of the debt ceiling and what it views as insufficient spending reductions. The House GOP’s budget plan called for $2 trillion in spending reductions to match $4.5 trillion in tax cuts. The Senate bill cuts just over $1.5 trillion but spends the full amount on taxes.

Meanwhile, more moderate Republicans have raised alarms over the deep Medicaid cuts included in the Senate-passed version. Senate Republicans approved a $1 trillion cut to Medicaid, which is far harsher than the original House plan.

Members of the House have been called back to Washington from their July 4 recess to begin consideration of the revised legislation. While its final passage remains uncertain, Speaker Johnson and President Trump have demonstrated a strong ability to unify their caucus in the past.

The Office of Federal Relations will continue to monitor developments and provide updates as this process unfolds.

Byrd Bath Strikes Medicaid Proposals

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In yet another setback for Senate Republicans, the Senate Parliamentarian has ruled that several key Medicaid provisions in the GOP’s sweeping budget reconciliation bill violate the Byrd Rule, effectively stripping them from the legislation.

The Byrd Rule, a procedural safeguard named after the late Senator Robert Byrd, restricts what can be included in budget reconciliation bills. It prohibits provisions that are considered “extraneous” to the federal budget, meaning they must primarily affect government spending or revenue and not merely serve policy goals.

Among the provisions deemed to be in violation of the Byrd Rule are restrictions on pharmacy benefit managers and ACA subsidies for certain immigrants as well as, perhaps most importantly, limits on Medicaid provider taxes, which are state-imposed taxes on healthcare providers that are then used to draw down more federal Medicaid funding.

The Senate Finance Committee, which has jurisdiction over Medicaid, proposed lowering the provider tax cap to 3.5% of net patient revenue over the next 6 years in Medicaid-expansion states, and barring non-expansion states from raising provider taxes beyond their current levels.

According to the Congressional Budget Office, this proposal would save the government hundreds of billions of dollars over the next 10 years. Hospitals around the country, however, warned that this could devastate rural and underserved hospitals that rely heavily on Medicaid funding. The potential impacts of Medicaid cuts were a point of contention within the Senate GOP, with members such as Josh Hawley (R-MO) and Susan Collins (R-ME) voicing concerns over the cuts.
Republicans will now have to work to rewrite these provisions to be Byrd Rule compliant if they wish to keep them in the bill. While they do have the option to overrule the Parliamentarian, this move is controversial, and Majority Leader John Thune has said that it is not on the table.
With the self-imposed July 4th deadline for sending the “Big, Beautiful Bill” to President Trump’s desk looming, Senate Republicans will be scrambling over the weekend to make crucial decisions on the future of the Medicaid portion of this bill. If it does manage to pass the Senate, its chances of success are still wary in the House, where many members are unhappy with Senate changes.
The Federal Relations Office will keep you updated with changes as the process unfolds.

GOP Education Plan Hits a Byrd Rule Snag

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Senate Republicans were dealt a major blow in their proposed plans to overhaul higher education this week. Two important provisions contained in the Senate Health, Education, Labor and Pensions’ reconciliation package have been deemed to violate the Senate’s Byrd Rule.
The Senate Parliamentarian — the nonpartisan official tasked with interpreting and issuing rulings on Senate rules — has ruled that the Workforce Pell and consolidated loan repayment provisions of the bill are in violation of the Byrd Rule.
The Byrd rule, officially known as Section 313 of the Congressional Budget Act, requires that reconciliation legislation comply with certain parameters, including that the provisions must directly relate to the budget, can’t contain unrelated policy priorities, and can’t grow the deficit beyond the budget window provided in the bill.
The Parliamentarian’s ruling means that, unlike the simple majority needed for passage of a reconciliation bill, these provisions would need to clear a 60-vote threshold if challenged on the Senate floor — which they almost certainly would be.
The proposed Senate loan repayment changes attempt to end the multiple existing income-driven student loan repayment plans. In their place, both current and future borrowers would be transitioned into one of two consolidated plans: a standard repayment plan, and a single income-driven repayment plan.
The Parliamentarian’s ruling determined that repealing these repayment plans for current borrowers was in violation of the Byrd rule. Senate lawmakers and committee staff will need to rewrite elements of the bill in order to comply. The proposed changes were expected to net over $200 billion in savings, which Republicans may now seek to find through other avenues.
While current borrowers will now likely be permitted to maintain their current repayment plan, the Parliamentarian’s ruling did not apply to future borrowers, meaning that borrowers who take out new student loans on or after July 1, 2026, may only have access to two repayment plans.  One would be a Standard plan, with monthly payments stretched out over a term ranging from 10 to 25 years. The other would be a new income-driven repayment plan called the Repayment Assistance Plan, or RAP. RAP would use a repayment formula that differs in many ways from current IDR options and would in some cases have higher monthly payments.
The situation remains fluid. The Office of Federal Relations will continue to update with the status of the bill and changes.
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House Republicans passed their multi-trillion-dollar reconciliation package this morning, a major victory for Speaker Johnson and President Trump. The passage comes after weeks of infighting amongst Republicans, with both moderate members and conservative hardliners threatening to withhold their support over certain provisions. Eventually, after a meeting with President Trump and last-minute changes made by Republican leadership, the bill passed by a 215-214-1 vote. Every House Democrat voted no. Reps. Thomas Massie (R-KY) and Warren Davidson (R-OH) were the two Republicans who voted against the legislation. House Freedom Caucus Chair Andy Harris (R-MD.) voted present.

The legislation includes $3.8 trillion in tax cuts and cuts to Medicaid and SNAP coupled with the phase out of clean energy tax credits from the Inflation Reduction Act. These programs were cut in order to offset the impact of the extension of President Trump’s 2017 tax cuts, and the Congressional Budget Office estimates that the bill will result in $698 billion in cuts to Medicaid and $267 billion in cuts to SNAP.

Additionally, the bill makes significant changes to higher education legislation — particularly student borrowing. If signed into law, this package would cap lifetime borrowing for a student or their parents at $200,000 and eliminate entirely subsidized student loans and Grad PLUS loans. The bill also includes changes to Pell Grant eligibility, the creation of a risk-sharing program for universities, and would cap the availability of federal aid to the median cost of a specific program nationally.

The reconciliation package now heads to the Senate for consideration, where it will likely be significantly altered.  While reconciliation bills are not subject to the filibuster in the Senate, meaning only a simple majority is needed for passage, there are stricter rules around what can be included in the Senate. Furthermore, many Senators have expressed misgivings over many of the cuts made by House lawmakers.

 

 

 

Reconciliation Update

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House Republicans are pushing forward with their reconciliation bill, an ambitious effort to enact the bulk of President Trump’s legislative agenda in a single package. Speaker Mike Johnson (R-LA) is determined to pass the final bill before Memorial Day, but obstacles remain as intraparty divisions and strong Democratic opposition threaten to complicate the process.

So far, two major steps in the reconciliation process have been completed. First, Congress adopted a budget resolution that outlines the framework for reconciliation, allowing lawmakers to fast-track legislation. Second, key committees—including Energy & Commerce, Ways & Means, Education & Workforce, and Agriculture—held exhaustive markups, working late into the night to finalize their respective proposals and move them out of committee.

Now, these committee proposals must be consolidated into a single reconciliation bill by the House Budget Committee. Once packaged into a bill, the House Rules Committee will set the terms for debate and determine how amendments will be handled on the floor. After this, the bill will be brought to the full House for a vote. Speaker Johnson has expressed optimism that Republicans can unite behind the bill, but divisions within the GOP present challenges. Conservative members have called for deeper spending cuts, while moderate Republicans are concerned about provisions that reduce Medicaid funding. Meanwhile, Democrats remain firmly opposed, arguing that the bill prioritizes tax cuts for high-income individuals at the expense of essential social programs.

If the bill passes the House, it will head to the Senate for further consideration. Senate committees may review the bill and propose amendments, but reconciliation guidelines such as the Byrd Rule prevent non-budgetary provisions from being added. Unlike other types of legislation, reconciliation bills are not subject to filibuster, meaning debate is strictly limited to 20 hours and only a simple majority is required for passage.

Although Republicans hold a majority in the Senate, it is likely that they will make substantial modifications to the House proposal. If changes are made, the bill must return to the House for final approval before it can be sent to the President for signature. With the Memorial Day deadline approaching, lawmakers will have to navigate difficult negotiations and political pressure to push the bill through both chambers.