By Siobhan Hughes, Liz Essley Whyte and Olivia Beavers

WASHINGTON -- House Republicans' attempt to curb Medicaid as part of President Trump's "big, beautiful" tax-and-spending bill has opened up a constellation of intraparty fights that are complicating the GOP-controlled Congress's efforts to advance the sweeping legislation.

The fight over Medicaid -- how deeply and quickly to trim the program that serves more than 70 million people -- helped snarl progress Friday on getting the megabill to the House floor. Spending-hawk holdouts on the Budget Committee blocked the measure, setting the stage for further talks into the weekend. But even if the bill makes it through the House by leaders' self-imposed Memorial Day deadline, more battles are expected in the Senate.

The state-federal healthcare program is a target because some $625 billion in Medicaid savings envisioned over 10 years will help finance an extension and expansion of Trump's 2017 tax cuts, accounting for more than a third of the $1.5 trillion they hope to save to partly offset $4 trillion in tax relief. Those Medicaid cuts are smaller and take effect later than what many House GOP conservatives want -- and have disparate effects across Republican states.

The consequence is a free-for-all battle happening behind closed doors that is testing how far Republicans will go to put limits on the program, which they see as having expanded far beyond its intended goal of serving the poorest and neediest Americans. Republicans say that they want to get in line behind Trump's agenda, but the Medicaid issue is pulling the party apart, and straining the math needed to make the broader package work.

"I really want to be a yes," said Rep. Warren Davidson (R., Ohio), who in February voted to support an earlier stage in the legislative process despite mistrusting House Republican leaders. But he said the ways the Medicaid cuts were pushed into the future was disappointing.

"A lot of the spending cuts are really promises that some future Congress is going to cut spending," he said.

Late Friday, Moody's Ratings downgraded the U.S. government's AAA debt rating and warned that the legislation under consideration was unlikely to yield a significant change in the country's fiscal trajectory.

Medicaid cuts -- but not right away

The package takes aim at Medicaid in part by instituting work requirements for most able-bodied adults through age 64 without dependents. The work requirements wouldn't take effect until 2029 -- after Trump has left office. It also takes aim at California by reducing federal Medicaid payments to states that provide healthcare coverage for immigrants in the country illegally. That provision doesn't take effect until October 2027 -- after the midterm elections.

"Cut it off now," said Rep. Ralph Norman (R., S.C.), a House Budget Committee member, referring to provisions that have delayed effective dates. "It's not that complicated."

Norman was one of a handful of GOP members of the Budget Committee to block the bill from advancing on Friday. The committee is reconvening Sunday night.

The push for a tighter line on spending comes as other Republicans have warned of the political dangers of deep cuts to healthcare coverage, potentially costing vulnerable members their seats in 2026. The clout of these moderates is the major reason that Republicans resisted large cuts, such as lowering the minimum share the federal government shoulders for Medicaid.

Democrats universally oppose the package, saying it cuts aid to poor people to pay for tax cuts for the ultrarich. A preliminary Congressional Budget Office analysis of the portion of the package dealing with Medicaid found that it would reduce the number of people with health insurance by at least 8.6 million in 2034. Analyses of the overall impact of the budget plan have found that high-income households gain the most from the policy changes, while lower-income households would have smaller gains or lose ground.

Opposing a 'sick tax'

As House Republicans grapple with Medicaid, the Senate is similarly divided, with some senators arguing the cuts are too deep or misdirected, and others saying more reductions are needed.

Sen. Josh Hawley (R., Mo.) objects to a provision that requires some able-bodied Medicaid recipients -- those making more than 100% of the federal poverty level, or $15,650 for a single adult -- to pay for some of their coverage. The contributions would be capped at $35 a service, or 5% of an individual's income, and wouldn't be required for primary, prenatal, pediatric or emergency care.

"I don't really love their copay, which to me looks like a 'sick tax,' " Hawley said.

Sen. Rand Paul (R., Ky.) is already on record as a "no" vote on the broader package, in large part because he opposes a provision raising the nation's debt ceiling by $5 trillion, saying it shows lawmakers aren't serious about deficit spending. Sen. Ron Johnson (R., Wis.) is also currently a "no" because he wants deeper spending cuts.

One big issue in both houses of Congress: a provision that would freeze at current rates the arcane arrangements known as " provider taxes" and ban states from establishing new ones.

Alaska is the only state that doesn't finance its Medicaid system through taxes imposed on providers like hospitals, revenue that is then supercharged by matching funds from the federal government. Florida does tax providers -- but at lower rates than other states. Both congressional delegations want something in exchange for being stuck with lower provider taxes than other states since that in turn lessens the federal government's spending.

Rep. Byron Donalds (R., Fla.), who is running for governor, suggested that one option would be to lower the federal government's 90% match rate for the population of mostly able-bodied, lower-income adults who gained coverage after the 2010 Affordable Care Act. The savings, he said, could be plowed in part into boosting support for people like children and single mothers.

"We are prioritizing people who are truly in need," he said.

Alaska's two Republican senators are also flexing their muscle -- which is considerable given the GOP's 53-47 majority in the Senate.

"If you have had other states basically taking advantage of it or 'gaming the system,' then why isn't it being looked at more carefully?" said Sen. Lisa Murkowski (R., Alaska), who suggested that the provider tax should be eliminated.

Write to Siobhan Hughes at Siobhan.hughes@wsj.com, Liz Essley Whyte at liz.whyte@wsj.com and Olivia Beavers at Olivia.Beavers@wsj.com

(END) Dow Jones Newswires

May 16, 2025 21:00 ET (01:00 GMT)

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