House Republicans Unveil $880 Billion Medicaid Cut Plan

House Republicans Unveil $880 Billion Medicaid Cut Plan

House Republicans have introduced a plan to cut $880 billion in Medicaid spending over the next decade as part of President Donald Trump’s proposed $4.5 trillion tax break initiative. The proposal, led by Rep. Brett Guthrie (R-KY), chairman of the Energy and Commerce Committee, aims to reduce waste by implementing new work and eligibility requirements for Medicaid recipients. Republicans argue that these measures will help eliminate “waste, fraud, and abuse” to generate savings.

Concerns from Democrats

Democrats have raised alarms that millions of Americans could lose their health coverage due to these proposed cuts. A preliminary estimate from the Congressional Budget Office (CBO) suggests that 8.6 million people could lose health insurance over the next decade.

Rep. Guthrie stated, “Savings like these allow us to use this bill to renew the Trump tax cuts and keep Republicans’ promise to hardworking middle-class families.”

In contrast, Rep. Frank Pallone (D-NJ), the ranking member on the Energy & Commerce Committee, warned, “In no uncertain terms, millions of Americans will lose their health care coverage. Hospitals will close; seniors won’t be able to access care they need; premiums will rise for millions if this bill passes.”

Targeting ObamaCare Expansion Programs

The proposal specifically targets ObamaCare expansion programs established under Biden’s Inflation Reduction Act by eliminating billions in energy loan guarantees and suspending renewable-energy grants.

A preliminary CBO analysis indicates that these measures could save approximately $715 billion from now through FY2032, totaling $912 billion when combined with other provisions aimed at cutting energy subsidies.

Unlocking Frozen Funds

The plan also seeks to unlock previously frozen funds intended for tax credits related to renewable energy sources, such as wind turbines and solar panels used in homes and businesses across America. The CBO estimates that these changes would save around $197 billion through FY2032, with a significant portion coming from the elimination of the Energy Department’s Advanced Technology Vehicles Manufacturing Loan Program.

Major automakers, including Ford Motor Co., General Motors Co., and Tesla Inc., received approximately $13 billion each in loans from this program last year before it was extended with additional funding by Biden.

CBO director Shai Akiva informed lawmakers that he could not provide an estimate on how much money these companies would save until he receives more information about their plans to utilize the extended loan guarantee program.

Industry Reactions

Tesla is currently reviewing the new legislative proposal, while representatives from discount retailers Costco Wholesale Corp. and Walmart Inc. have not yet responded regarding their potential costs or benefits under the proposed plan.

Last year, Walmart announced plans to operate an all-electric fleet of nearly 20 million delivery vans within ten years, while Costco has set ambitious goals for reducing carbon emissions. Both companies are still assessing the implications of the new legislative proposal.

Conclusion

Republicans have long sought deeper cuts but were unable to achieve them during former President Joe Biden’s administration. The House Ways & Means Committee is expected to vote on its version of Trump’s “big beautiful bill” later today. Trump has described this effort as “the biggest tax cut ever.”

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