Comments are by Marc Stier – Executive Director, Penn Policy Center
As Senate begins consideration of the reconciliation bill today, I’m going to be commenting on the politics of reconciliation and the contents of the Senate bill.
Sunday, June 29, 10:16 p.m.
I’m wearing down after a long day and week, so this will be my last post today. The floor debate, which began at 3:00 pm, will go on for another three to five hours. Democrats will use the time to not only point out the flaws of the bill but also to further delay the process. Following debate, “vote-a-rama” is now expected to begin around midnight. Vote-a-rama will go through the night and the Senate Republican leadership’s goal is to have a final vote on the bill sometime tomorrow, likely late night. But it could be delayed to early Tuesday.
We are hearing that the Senate will vote on Senator Rick Scott’s proposal to reduce FMAP rates for the expansion population at some point during vote-a-rama. We expect it to lose.
I’ll be back tomorrow with some updated numbers about the impact of the Senate bill on health insurance and food assistance. Early indications from the Congressional Budget Office is that the Senate bill will reduce cost more people health insurance and food assistance than the House bill did. But I don’t have updated numbers on that yet.
Sunday, June 29, 9:30 p.m.
I’ve been taking a break for dinner and some other stuff so I’ve missed some of the debate. But following up on my comment about Tillis’s decision not to run for reelection, I want to address the politics of this bill.
I’ve heard some folks say during the debate that the bill will be popular with the public. But so far the evidence of most polls show that the bill is underwater by a margin of about 2–1. A Quinnipiac poll shows that 53% oppose the bill, 27% support it, and 20% are unsure. An average of polls from The Washington Post, Fox News, KFF, and Quinnipiac University shows that 55% people oppose the bill, 31% support, and 24% are unsure or don’t know enough to have an opinion.
These results, which show the bill is, on average, 26 points underwater are a little worse than the polls on the 2017 tax cut, which was 19 points underwater soon after it passed. Of course in 2017, the gap between those who opposed and supported the proposed repeal of the ACA was 33 points.
The 2017 tax cut remained underwater up through the 2018 election. But it became slightly more popular perhaps because people did get a tax cut. But if the bill passes, that’s not going to happen now. The current bill extends tax cuts already in place, so no one will see any tax cut in their pay check. And the new tax cuts on tips will benefit a tiny number of people. Because the true narrative that the tax cut overwhelmingly benefits the wealthy has taken hold and will be reinforced by our work over the next year, most working and middle-class people are likely to resent the bill, as well as the new tax.
Meanwhile, even though the Republicans have taken politics into account by delaying most benefit cuts until after the 2026 election, people will know they are coming. Most working and middle-class people know folks who receive or have received SNAP and Medicaid. Many of them have received Medicaid or SNAP at some point themselves.
And there are other ways the bill can hurt people sooner rather than later. Electric costs will rise as the demand for electricity goes up with the repeal of clean energy credits reducing the supply of our cheapest forms of energy.
Other Trump initiatives will also hurt people. The tariffs will raise prices that the working and middle class pay for most goods. The tariff tax will overwhelm and nullify any tax cuts from the reconciliation bill by a great deal.
Taken together, this bill and the tariffs are the biggest own goal in in our entire political history.
The 2017 bill led to an enormous political defeat in 2018. This one is likely to lead to a bigger defeat.
The Republicans will certainly lose the House. The Democrats have an uphill battle to win the Senate. But with NC a lot easier, their odds of taking the Senate just increased.
Sunday, June 29, 5:29 p.m.
I don’t want to get deep into the weeds about how the Senate determines how much legislation costs. But, quite simply, here is the issue that is being debated now. The Senate Republicans want to claim that the huge ugly bill doesn’t raise the deficit as much as it really does because it extends some tax cuts that are in place now but are set to expire at the end of this year. This is clearly a dodge. The bill adds a minimum of $3 trillion to the total annual deficit and the debt.
Neither I nor Democratic senators Merekly, Van Hollen, and Murray agree with Republican senator Rand Paul often—but here, he is absolutely right. If this bill didn’t increase the annual deficit by what the Democrats say it does, there would be no reason to raise the debt limit by $5 trillion.
Sunday, June 29, 3:52 p.m.
Senator Lindsay Graham’s speech shows off one of his most impressive talents—lying through his teeth.
It’s time to stop calling what the Republican propose “work requirements.” They are not requirements for people to work. They are, in fact, requirements that people report the work they do, and that they do so in onerous and burdensome ways.
Here are the facts: 64% of the adults who receive Medicaid and SNAP do work outside the home, and another 18% are taking care of dependent children or seniors or are going to school. Ten percent are ill or disabled, and 4% are retired. About 2% cannot find work.
The real work requirement is not some government demand but the fact that most people simply cannot stay alive if they do not work or someone who cares for them works. Everyone in the country thus works, goes to school or is cared for by a worker.
At the end of his remarks on this topic, Graham says, “…and these work requirements save billions of dollars.” How can work requirements save billions of dollars when almost everyone already meets the requirements? Because the work requirements create so much red tape that it will be impossible for many people to meet them.
The work requirement is a dishonest dodge, the kind Lindsay Graham—who opposed Trump until his best buddy John McCain died—specializes in.
Sunday, June 29, 2:00 p.m.
While we are waiting for the debate to resume, let’s take a closer look at the tax provision in the Senate bill.
Here is top line analysis provided by the Institute on Tax and Economic Policy.
The Senate bill would have the following effects on taxpayers, which are all very similar or nearly identical to those of the House bill:
- Under the Senate bill, 69% of the net tax cuts would go to the richest fifth of Americans in 2026. Only 11% would go to the middle fifth of Americans, and less than 1% would go to the poorest fifth.
- The richest 5% alone would receive 45% of the net tax cuts next year.
- The richest 1% of Americans would receive an average net tax cut of $61,000, which is many, many times more than the average tax cut received by other income groups.
- The richest 1% of Americans would receive a total of $107 billion in net tax cuts in 2026. The middle 20% of taxpayers on the income scale, a group that has 20 times the number of taxpayers as the richest 1%, would receive less than half that much: $53 billion in net tax cuts that year.
- The $107 billion in net tax cuts going to the richest 1% next year would exceed the amount going to the entire bottom 60% of taxpayers (about $76 billion).
- The effects of President Trump’s tariff policies alone offset most of the tax cuts for the bottom 80% of Americans. For the bottom 40% of Americans, the tariffs impose a cost that is greater than the tax cuts they would receive under this legislation.
- Even foreign investors who own shares in U.S. companies would benefit more than many Americans. These foreign investors would enjoy $31 billion in tax cuts in 2026 compared to just $1.5 billion for the bottom 20% of Americans.
- The legislation provides the greatest rewards to high-income people living in states that have low state and local taxes on the wealthy. In these states, high-income people are not much affected by the cap on deductions for state and local taxes, which the Senate bill would make permanent.
Here are the results for Pennsylvania, first in a chart and then in the underlying table.
Sunday, June 29, 10:52 a.m.
Here’s what we’re expecting the rest of the day.
Once the reading of the bill that Leader Schumer demanded is complete, the Senate rules provide for 20 hours of debate evenly split between the parties. The Republicans will likely forgo their 10 hours and the Dems will certainly use use every moment. Then what is known as a “vote-a-rama” begins. Senators can propose unlimited number of amendments with little time for debate (about a minute for each side, I believe followed by a 10-minute period for voting.) Vote-a-rama continues until there are no more amendments or cloture is invoked by a 60-vote majority. Typically, vote-a-rama doesn’t change the final legislation. Instead it is a means by which the to as Right now, it’s expected that the bill will be voted on (and, likely, pass) either today, tonight or on Monday.
Sunday, June 29, 9:35 a.m.
After I went to sleep, the Republicans finally found the votes to proceed to consideration of the bill without needing the votes of the Vice President, who returned to his sofa.
How they got the votes is important, although at the moment I don’t have any details. According to a paragraph deep in a WaPo article, Thune promised Senators Scott, Lee, and Lummis that he would reinsert Scott’s proposal to reduce the FMAP rate, the federal share of the costs for people insured under the Medicaid expansion. And Senator Johnson of Wisconsin agreed to switch his vote to Aye.
The current rate is 90%. I do not know what Thune promised the four senators the rate would be reduced to.
A proposal along these lines came up about a week ago. It would have kept the 90% federal reimbursement rate for people already on expanded Medicaid. But the rate for anyone joining Medicaid would be set at the non-expanded standard FMAP rate of roughly 55%. This plan would, over a few years, be disastrous for most states, including Pennsylvania. One of the critical but unknown features of the safety net is that different people go on and off Medicaid and SNAP frequently. The safety net is exactly what the name says: a series of programs that protect people who are having difficulties or help them take advantage of new opportunities.
Some of the people who have had to rely on Medicaid have lost their job because of a company moving or a recession. Some can’t work because they are ill or have new responsibilities to take care of young children or elderly relatives. And some need temporary help to take advantage of new opportunities. Half of the medical students my wife teaches at Drexel are on Medicaid. My daughter was on Medicaid when she was doing a social work graduate program at Bryn Mawr College. At any one time, about 800,000 people in Pennsylvania are on the Medicaid expansion. But over the first ten years of the program, 2.5 million were on it. According to a census study, about 50% of Medicaid recipients are on it for two years or less; 63% are on it for three years or less. Very few are on it for more than four years. Much the same is true for SNAP.
So if the federal share of the Medicaid expansion were to drop to 55% for new participants in the Medicaid expansion, eventually the federal share of the cost of the entire program would drop to that level. In 2025, the state cost for the expansion population will be roughly $732 million. If the state were only reimbursed at the traditional Medicaid FMAP rate of 55%, the cost would be $3.288 billion. That means the state would eventually have to pay an additional $2.56 billion to maintain the Medicaid expansion. Even if Pennsylvania were to adopt every progressive tax idea our organization has proposed, it would not have enough money to pick up these costs as well as to fund the ongoing programs the state carries out for education at all levels, roads and bridges, and much else.
Should this provision be added to the final version of the Senate bill, it’s not clear it would pass the Senate as a number of senators already told Leader Thune last week that they wouldn’t vote for it. We also think that a number of Republicans in the House would oppose the bill as well. Representative Rob Bresnahan recently signed a letter along with seven other members of the House saying he opposes other changes the Senate made in the Medicaid portion of the reconciliation bill that has led to deeper cuts to Medicaid. We don’t think he would support a bill with this reduction in the federal share for the Medicaid expansion population. (And, if Rep. Bresnahan really wants to protect Medicaid as he says he does, he wouldn’t vote for any version of the reconciliation bill.)
Saturday, June 29, 8:45 a.m.
I walked into my study this morning to hear someone talking rapidly.
I left the live stream of the Senate on when I went to bed. They were waiting to vote. I came back to the clerk reading the reconciliation bill, which Schumer forced them to do.
It’s going to take about 12 hours to do this, delaying consideration of the bill
Saturday, June 28, 10:27 p.m.
It’s late, and I’ve had a long week. And three senators have still not voted. I’ll be back in the morning to catch up on what I’ve missed.
Saturday, June 28, 9:28 p.m.
We are still waiting for Rick Scott of Florida, Mike Lee of Utah, and Cynthia Lummis of Wyoming to vote. Scott and Lee are hardliners on spending. But the rumors earlier today were that they would vote to consider the bill.
Saturday, June 28, 9:26 p.m.
While we’re waiting, it might be instructive (and amusing) to see some of the provisions added to the bill that are designed to win over Senator Murkowski of Alaska. Among other things, there are:
– creation of a new tax exemption for fishers from villages in western Alaska.
– creation of an exemption from the work requirements for food assistance for Alaskans.
– provisions that will provide more funds to Alaskan health care providers.
– a provision that allows some Alaskan whaling captains to deduct more of their expenses, raising their write-off in whaling expenses from $10,000 to $50,000.
Other benefits accrued to Alaskans as well. Evidently, they were enough to convince Senator Murkowski to vote for considering the bill, which she just did.
Saturday, June 28, 8:31 p.m.
Things have been on hold for about 25 minutes now. Either some Republicans are missing or Leader Thune is delaying things because he doesn’t have the votes to proceed, even with VP Vance, and is trying to convince another member to vote “Aye.”
Senator Murkowski is one of the Republicans who has not voted. Despite her initial qualms about the bill, she has secured a great deal of special treatment in the legislation for Alaska. (More details soon.) So she is now expected to vote yes.
It now appears the Senate was waiting for the Vice President to arrive.
Senator Mike Lee has also not voted. Earlier in the day he said he wouldn’t vote to proceed without a CBO score of the bill.
Saturday, June 28, 8:20 p.m.
Some last-minute holdouts against the reconciliation bill have been senators, such as Lisa Murkowski of Alaska and Josh Hawley of Missouri, who were opposed to the bill because it would harm rural hospitals in their states. Many rural hospitals in Pennsylvania and elsewhere are in difficult circumstances. Medicaid pays for a great deal of care given by these hospitals, which would otherwise be uncompensated. In Pennsylvania, Medicaid pays for 27% of otherwise uncompensated care.
To secure the votes of these senators, Republican leaders have added a $25 billion fund to help rural hospitals. (The original version of this proposal was for a fund of $100 billion.)
While having this fund is better than not having it, it’s doubtful that all the hospitals hurt by deep cuts to Medicaid will be protected. For one thing, many of those hospitals are found in urban areas. For another, the fund is only in place for five years, while the Medicaid cuts are permanent. And $25 billion is far less than what is needed.
The rural hospital fund may buy a few more votes, but it won’t solve the fundamental problem that the huge, ugly bill will take health insurance away from at least 16 million people.
Saturday, June 28, 8:09 p.m.
Fifty “Nay” votes! If the bill is going to pass, it will need Vice President Vance to put it over the top. Or Senator Thune is going to have to convince a Republican to change their vote from “Nay” to “Aye.” Three Republican senators—Ron Johnson of Wisconsin, Rand Paul of Kentucky, and Thom Tillis of North Carolina—have voted no. Johnson and Paul have opposed the huge addition to the deficit the bill would create, at least $3 billion more over ten years.
I don’t know of other potential Republican holdouts, so I imagine that Vance will vote to proceed with consideration of the bill.
Saturday, June 28, 7:58 p.m.
Senator McCormick of Pennsylvania voted yes.
Just before him, Senator Collins of Maine voted yes, once again disappointing progressives who had hoped that she might take a stand against far-right wing policy initiatives.
Saturday, June 28, 7:44 p.m.
While the official CBO score of the Senate version of the reconciliation bill is not out, Senator Ron Wyden issued a press release with a preliminary score of the Medicaid portions of the bill. It would cut $930 billion from Medicaid over ten years.
Republican members of the House, such as Pennsylvania’s Rob Bresnahan (CD-8) and Brian Fitzpatrick (CD-1), kept saying that the bill would get better in the Senate. The opposite is happening, especially with regard to Medicaid. The House version of the bill cut Medicaid by roughly $130 billion less over ten years.
The $900 billion figure does not include reductions in subsidies for health insurance on the ACA exchanges.
The CBO estimated that the House version of the bill would reduce the number of people with health insurance in the US by about 16 million. The Senate bill would be worse.
It will be interesting to see what Reps. Fitzpatrick and Bresnahan do when the bill returns to the House.
Saturday, June 28, 7:35 p.m.
Senate majority leader John Thune must have secured the votes he was lacking as the Senate is about to proceed to vote on whether to bring the bill to the floor.
Saturday, June 28, 7:30 p.m.
It appears that Senate Republicans don’t have the majority they need to proceed to consideration of the bill.
The key stumbling blocks appear to be:
– Sen. Thom Tillis (R-North Carolina), who said that he couldn’t support the current version of the bill because it “would result in tens of billions of dollars in lost funding for North Carolina, including our hospitals and rural communities.”
– A few other senators, who are unwilling to move forward to consideration of the bill without a CBO score of it.