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Category: Administration

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.

Dept. of Education Budget Request Released

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The Trump administration has released its budget request for the Department of Education for Fiscal Year 2026, proposing steep funding cuts of more than 15%—a $12 billion reduction in budget authority. The administration characterizes these cuts as part of a broader effort to “responsibly wind down” the department.

While the president’s budget request serves as an important policy statement, it carries no legal authority. Final funding decisions rest with Congress, which determines allocations through the annual appropriations process. Several key Congressional committees are set to begin deliberations in the coming weeks, shaping the future of federal education spending.

Included below are some of the key higher education policy changes proposed in the budget request:

  • Pell Grant Reduction: The maximum Pell Grant award would be cut by $1,685, reducing it to $5,710 in total. The administration argues that this is necessary to address a $2.7 billion shortfall that has resulted from increasing instances of fraud as well as congressional irresponsibility.
  • Elimination of TRIO Programs: Federal funding for TRIO programs would be ended entirely. The administration argues that programs to support students from disadvantaged backgrounds will be better administered by individual states.
  • Cuts to Federal Work-Study: The administration requests to cut funding for work-study programs by $980 million. The administration hopes these proposed cuts will help to “enact a more appropriate split between Federal and employer wage subsidy, where employers pay 75 percent of a student’s hourly wages and reduce the federal contribution to 25 percent.”
  • Defunding GEAR UP: The GEAR UP program would also be defunded under this proposal.

GOP Tax Package Advances Out of Committee

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Early Wednesday morning, after more than 17 hours of debate, the House Ways and Means Committee voted to advance out of committee the legislative package containing a slew of President Trump’s top tax priorities. The panel advanced the legislation in a 26-19 party-line vote after rejecting numerous Democratic-led amendments.

The tax bill now heads to the House Budget Committee, which is tasked with combining all the portions of the Trump agenda bill into one package in advance of its consideration in the entire chamber.

The 389-page package makes the income tax rates from the Tax Cuts and Jobs Act of 2017 permanent and implements some of the president’s campaign promises, including no tax on tips or overtime through 2028 and a temporary increase of the child tax credit.

This bill also includes the Republican proposal to increase the endowment tax on some universities. Under the 2017 law, private universities with endowments of over $500,000 per student were subject to a 1.4% tax. The current GOP package creates a tiered excise tax system that would significantly increase taxes on some universities:

  • 1.4% tax for schools with endowments between $500,000 and $750,000 per student.
  • 7% tax for schools with endowments between $750,000 and $1.25 million per student.
  • 14% tax for schools with endowments between $1.25 million and $2 million per student.
  • 21% tax for schools with endowments above $2 million per student.

The bill also narrows the definition of students counted for tax calculations. International students on temporary visas and undocumented students will be excluded from the count, increasing the tax burden on institutions with large international student populations.

Crucially, the endowment tax would still only apply to private universities, although some religiously affiliated institutions will be exempt.

While voting the package out of committee is a significant step, there remains a strenuous process ahead of GOP leadership as they seek passage of the reconciliation legislation. The Ways and Means portion must be packaged together into one “big, beautiful bill” by the House Budget Committee before being voted on by the entire House, which will be difficult given concerns from different GOP factions and the razor-thin margin in the House. If the bill does manage to pass, it will be subject to potentially significant changes in the Senate, where it will also face staunch Democratic opposition.

Helpful links:

The Hill

Inside Higher Ed

 

 

HHS Budget Hearing

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The Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will meet in open session at 10:00 AM on Tuesday, May 20, 2025, in Room 124 of the Dirksen Senate Office Building.

The Subcommittee will hold a hearing titled: A Review of the President’s Fiscal Year 2026 Budget Request for the Department of Health and Human Services. Secretary Robert F. Kennedy Jr. will be the witness. Live video webcast of the hearing can be found here:  www.appropriations.senate.gov.