Republicans need to cut Medicaid to hit budget savings target, CBO finds

Republicans can’t achieve their goal of slashing $2 trillion in federal spending over the next decade without cutting Medicaid, according to the nonpartisan Congressional Budget Office (CBO). 

In a report released Wednesday, CBO found that the government spends $381 billion on programs other than Medicaid or the Children’s Health Insurance Program (CHIP) that are under the jurisdiction of the Energy and Commerce Committee.  

That’s a problem for House Republicans, who are looking to slash $880 billion from programs in the committee’s jurisdiction to help pay for an extension of President Trump’s tax cuts and border enforcement funding. 

One of the prime targets is Medicaid, the joint federal and state-funded program that provides health coverage to more than 72 million low-income Americans. Republicans see Medicaid as a program rife with fraud and abuse and have long sought to rein in its spending.  

CBO said that of the $381 billion, more than half is already paid for. So even if Republicans eliminate every program under Energy and Commerce other than Medicaid and CHIP, it would only be able to save a maximum of $135 billion. 

Republicans in the House advanced a budget resolution nearly on party lines last week calling for at least $2 trillion in spending cuts, kicking off the reconciliation process that will allow the Senate to bypass the filibuster and pass a bill with only 51 votes.  

Under the resolution, the Energy and Commerce Committee, which oversees Medicaid, has been tasked with identifying at least $880 billion in cuts.  

Trump, Speaker Mike Johnson (R-La.) and other Republican leaders argue they are not targeting Medicaid. They say the savings will come largely from weeding out waste, fraud and abuse while also expanding work requirements for some adults receiving benefits 

Johnson last week in a CNN interview said that some of the steepest potential cuts, like a change that would cap federal payments based on population rather than the current open-ended entitlement, are off the table. But he left the door open to reducing the enhanced federal match for Medicaid expansion states and enthusiastically endorsed work requirements.    

“This analysis from the nonpartisan CBO confirms what we’ve been saying all along: Republicans are lying about their budget,” said Rep. Brendan Boyle (Pa.), the top Democrat on the House Budget Committee, who requested the report. “Their plan would force the largest Medicaid cuts in American history — all to pay for more tax giveaways to billionaires. The American people deserve to know just how much pain Republicans are willing to inflict on their own constituents to reward their billionaire donors.”