In a bold and controversial fiscal game, Republicans in the House of Representatives are spreading a “menu” of proposed spending cuts totaling nearly $6 trillion over the next decade. The plan, which seeks to fund incoming President Donald Trump’s ambitious priorities — including tax cuts and increased border security — details the reduction of major federal programs, including medicare, Medicaid and Biden-era climate initiatives.
The early list received by POLITICO reflects the GOP’s long-term goal of reducing government spending, although the scale of the proposed cuts underscores the heavy contribution of the efforts. The menu includes cuts to welfare programs, a review of affordable care law grants, and a reversal of green energy tax incentives. While the list is more of a set of options than an official proposal, it has already sparked intense internal debate among Republicans.
People who were granted anonymity to discuss closed-door negotiations said the list comes from the House of Representatives Budget Committee, headed by Republican Jodey Arrington (R-Texas). Republicans participating in reconciliation plans have been generally targeting the listed programs for months, but GOP’s infighting over possible cuts of trillions of dollars is just beginning.
Overall savings amount to as much as $5.7 trillion over 10 years, though the list is very ambitious and unlikely to become law, given Republicans’ narrow margins in the House of Representatives and Senate. – politico
“The document is not intended as a proposal, but rather as a menu for potential spending reductions that members should consider,” one GOP source told the publication.
But even in the Republican caucus, there is skepticism about the feasibility of achieving such drastic savings. “They all seem pretty contradictory,” one senior GOP lawmaker conceded when asked if the spending offsets separating Republicans were particularly controversial.
House of Representatives Speaker Mike Johnson is reportedly working to balance the demands of Trump’s domestic policy agenda, which is estimated to cost $10 trillion, with budget restrictions imposed by his own promise to cut $2.5 trillion in government spending through a budget conciliation process as part of last year’s government funding negotiations.
Medicaid and ACA at the crossroads
One of the most contentious components of the plan is aimed at Medicaid, with the proposed federal spending caps tied to the state’s population level, rather than maintaining the program as an open-ended right. In addition, the list recommends setting work requirements for Medicaid recipients and aligning payments for physical adults with those for low-income children and people with disabilities — a move that should save $690 billion.
Another important goal is the Affordable Care Act (ACA). Republicans are seeing $46 billion in savings by letting key ACTA insurance subsidies expire and limiting eligibility based on citizenship status. These cuts, if followed, would revive the political fire that has surrounded the ACA since its inception, potentially destabilizing the coverage of millions of Americans.
Medicaid cuts, the Affordable Care Act and the nation’s largest anti-hunger program would create massive opposition from Democrats and would also face resistance from the GOP. House of Representatives Speaker Mike Johnson can’t afford any Republican misconduct if he wants to pass on the package on party lines. – politico
Medicare is also under investigation, proposing “site-neutral” payments that would equalize costs in outpatient settings — a policy that has garnered bilateral attention but may face resistance because of concerns about its impact on providers. The list also includes repeal of the Biden administration’s health care regulations, such as minimum staffing requirements for nursing homes, which proponents say will increase costs.
Climate programs on the chopping block
Perhaps the most politically sensitive area is green energy and climate initiatives. The proposal defines savings of up to $468 billion by repealing Biden’s climate policy provisions, including incentives for electric vehicles and elements of the bilateral infrastructure law.
But not all Republicans are aligned on this front. Eighteen Republicans in the House of Representatives, many of whom represent districts benefiting from clean energy projects, have warned Speaker Johnson against prematurely abolishing green energy tax breaks from the Inflation Reduction Act (IRA). Technologies such as hydrogen and carbon capture — which some GOP lawmakers see as favorable — are among the measures it could affect.
Even proposed cuts to green energy tax credits worth up to $500 billion can be difficult – as the document notes, they depend on “political viability”. Already 18 Republicans in the House of Representatives — 14 of whom won re-election in November — warned Johnson against prematurely cancelling some IRA energy tax credits that fund several manufacturing projects in GOP areas. – politico
The challenge for Johnson and his leadership is to garner enough Republican votes in the House of Representatives, where the GOP has a narrow majority while navigating a more moderate composition of the Senate. Speculation among Republican defectors is high, especially among lawmakers representing districts that depend on federal spending on infrastructure and health care programs.
President-elect Trump’s political plan has added another layer of complexity. Trump’s focus on aggressive border security measures and significant tax cuts — his campaign’s signature issues — comes with a hefty price tag. His allies in Congress are preparing to meet with him this weekend in Florida to discuss the next steps. The proposed cuts to Medicaid, the ACA and climate programs signal a sharp turnaround in Biden-era politics, but they could also threaten political implications that could threaten a fragile Republican majority.
