The U.S. Capitol building in Washington, D.C., on May 7, 2025. (Photo by Jennifer Shutt/States Newsroom)

WASHINGTON — As House Republicans continue to wrangle over the “one big beautiful bill,” a new analysis released late Tuesday projects the massive reconciliation package would decrease resources for low-income families over the next decade while increasing resources for top earners.

The nonpartisan Congressional Budget Office estimates that the lowest-earning households in the United States would see incomes decrease 2% in 2027, moving to a 4% loss in 2033, as a result of spending cuts to nutrition assistance and Medicaid, the health insurance program for low-income individuals and those with disabilities.

The CBO projects resources would meanwhile increase by 4% for the highest-earning Americans in 2027, moving down to a 2% increase by 2033, according to the latest analysis.

The CBO score could change as hardline conservatives press Republican leadership for increased spending cuts to federal safety net programs as a way to pay for, at least in part, the extension and expansion of 2017 tax cuts that come with a price tag of $3.8 trillion.

Rep. Brendan Boyle, ranking member on the House Committee on the Budget, said in a statement late Tuesday that “Donald Trump and House Republicans are selling out the middle class to make the ultra-rich even richer.”

“This is what Republicans are fighting for—lining the pockets of their billionaire donors while children go hungry and families get kicked off their health care,” said the Pennsylvania Democrat.

The bill as written now would slash roughly $800 billion from Medicaid and Affordable Care Act provisions, and $300 billion from the Supplemental Nutrition Assistance Program, or SNAP, according to the left-leaning Center on Budget and Policy Priorities.

Lawmakers on the House Committee on Rules — the final stop for the 1,116-page package bill before it reaches a House floor vote — have been debating the measure since 1 a.m. Eastern Wednesday, while House Speaker Mike Johnson huddled separately with far-right deficit hawks.

Far-right members of the House Freedom Caucus remained skeptical the bill could reach the House floor by Johnson’s goal of Wednesday.

The Louisiana Republican leader also faces opposition from GOP lawmakers who represent high-tax blue states who want an even higher ceiling for the amount of state and local taxes, or SALT, their constituents can deduct from federal taxable income.

Lifting the ceiling, which lawmakers already proposed boosting from $10,000 to $30,000 for married couples filing jointly, will increase the cost of the bill.

Johnson needs nearly every GOP lawmaker to support the bill once it hits the floor as House Republicans have an extremely thin 220-213 majority.

Treasury Secretary Scott Bessent prepares to testify before the Senate Finance Committee during his confirmation hearing  in the Dirksen Senate Office Building on Capitol Hill on Jan. 16, 2025, in Washington, D.C.  (Photo by Chip Somodevilla/Getty Images)

WASHINGTON — The Treasury Department announced Friday that Congress must address the debt limit before August, setting a firm deadline for Republicans to wrap up work on the “big, beautiful bill” that will raise the nation’s borrowing limit by up to $5 trillion.

Treasury Secretary Scott Bessent wrote in a letter to congressional leaders that “there is a reasonable probability that the federal government’s cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess.

“Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States.”

The projection marks the first time the Trump administration has weighed in publicly on when the government will likely reach default since the last suspension expired in January. 

In the months since then, the Treasury Department has used accounting maneuvers known as extraordinary measures to pay all of the country’s bills in full and on time.

Treasury’s projection is similar to a report the nonpartisan Congressional Budget Office released in March predicting the country would reach default in August or September unless Congress acted before then.

Reconciliation package

Republicans are hoping to lift the debt limit without having to negotiate a bipartisan agreement with Democrats, which is typically how lawmakers have addressed the debt limit during the past couple decades.

GOP leaders plan to raise the debt limit by between $4 trillion and $5 trillion in the 11-bill reconciliation package they’re using to address tax law, overhaul higher education aid and cut federal spending.

Speaker Mike Johnson, R-La., expects his chamber will vote on that legislation before the end of May, though Senate leaders haven’t put a timeline on when they’d bring the bill to the floor in that chamber.

GOP senators are likely to propose several amendments to the package, and any changes by the Senate would require the bill to get a final sign-off in the House before it could head to President Donald Trump’s desk.

The Treasury Department’s projection that a debt limit default will likely take place if no action is taken before August puts a firm deadline on when Republicans will need to reach final agreement.

Caution against waiting

Bessent also cautioned lawmakers against waiting until the last minute to get their work done.

“Prior episodes have shown that waiting until the last minute to suspend or increase the debt limit can have serious adverse consequences for financial markets, businesses, and the federal government, harm businesses and consumer confidence, and raise short-term borrowing costs for taxpayers,” he wrote. “A failure to suspend or increase the debt limit would wreak havoc on our financial system and diminish America’s security and global leadership position.”

A default on the country’s debt would limit the federal government to spending only the money it has on hand, likely leading to delayed, incomplete, or nonexistent payments on thousands of programs, including Social Security, Medicare, Medicaid, troop pay, veterans benefits and nutrition programs, among many others.

It would also lead to a downturn in the global economy with a recession being among the better scenarios.

A default is vastly different from a partial government shutdown and would lead to more significant consequences for federal spending and the economy. 

U.S. House Republicans are debating cutbacks to Medicaid, the health care program for lower-income Americans and some people with disabilities. (Photo by Thomas Barwick/Getty Images)

WASHINGTON — The Congressional Budget Office said Wednesday that potential major cuts and changes to Medicaid under consideration by Republicans could mean states would have to spend more of their own money on the program, reduce payments to health care providers, limit optional benefits and reduce enrollment.

The end result, under some scenarios, could be millions of Americans would be kicked off Medicaid and possibly left without health insurance, said the nonpartisan agency relied on by Congress for budget estimates.

The letter from CBO stemmed from a request by Senate Finance Committee ranking member Ron Wyden, D-Ore., and House Energy and Commerce ranking member Frank Pallone, D-N.J.

Both oppose GOP attempts to slash federal funding for the health care program for lower-income Americans and some people with disabilities. Republicans, who have not settled on an approach, say they are interested in ending waste, fraud and abuse in the program.

CBO Director Phillip Swagel wrote that possible Medicaid changes would likely lead to several outcomes in the states. The impact on states would occur because the federal government covers at least 50% of the cost of the program, with that share increasing in states with lower per capita incomes and those that expanded eligibility under the Affordable Care Act.

Wyden wrote in a statement the CBO letter showed “the Republican plan for health care means benefit cuts and terminated health insurance for millions of Americans who count on Medicaid.”

Pallone wrote in a statement of his own that reducing federal funding for the program by hundreds of billions of dollars would lead to “millions of people losing their health care.”

“(President Donald) Trump has repeatedly claimed Republicans are not cutting health care, but CBO’s independent analysis confirms the proposals under consideration will result in catastrophic benefit cuts and people losing their health care,” Pallone wrote. “It’s time for Republicans to stop lying to the American people about what they’re plotting behind closed doors in order to give giant tax breaks to billionaires and big corporations.”

The Medicaid changes would come as Republicans use the complex budget reconciliation process to move a sweeping legislative package through Congress with simple majority votes in each chamber, avoiding the Senate’s 60-vote filibuster, which would otherwise require bipartisanship. 

The House Energy and Commerce Committee, which is tasked with cutting at least $880 billion from the programs it oversees — including Medicaid — during the next decade, has yet to release its bill that if approved by the committee will become part of that package.

The panel, led by Kentucky Republican Rep. Brett Guthrie, is expected to debut its proposed changes next week before debating the legislation during a yet-to-be-scheduled markup.

Republicans plan to use the reconciliation package to permanently extend the 2017 tax law, increase spending on border security and defense by hundreds of billions of dollars, overhaul American energy production, restructure higher education aid and cut spending.

Five scenarios

CBO’s analysis looked at five specific Medicaid scenarios including:

• Congress reducing the federal match rate for the 40 states that expanded Medicaid eligibility under the Affordable Care Act, also known as Obamacare.
• Lawmakers eliminating a 6% threshold that exists for states that collect higher taxes from health care providers and then return that additional money in the form of higher Medicaid payments. CBO writes those “higher Medicaid payments increase the contributions from the federal government to states’ Medicaid programs.”
• Republicans creating a per-enrollee cap on federal spending.
• Congress establishing a cap on federal spending for Medicaid enrollees who became eligible for the program after their state expanded eligibility under the ACA.
• Lawmakers repealing two Biden-era rules that addressed the Medicare Savings Programs and standardized how states approached enrollment and renewals.

The analysis said states could raise taxes or cut spending on other programs to replace the lost federal revenue that would coincide with the first four scenarios, though CBO “expects that such steps would prove challenging for many states.”

“In CBO’s view, different states would make different choices regarding how much of the reduced Medicaid funds to replace,” the analysis states. “Instead of modeling separate responses for each state, the agency estimated state responses in the aggregate, accounting for a range of possible outcomes.”

Overall, CBO expects state governments would be able to replace about half of the lost federal revenue and that they would “reduce provider payment rates, reduce the scope or amount of optional services, and reduce Medicaid enrollment” to address the other half.

Alternatives studied

The first scenario, where lawmakers reduce the federal matching rate for expanded Medicaid populations, would save the government $710 billion during the next decade.

But in 2034, CBO expects that “2.4 million of the 5.5 million people who would no longer be enrolled in Medicaid under this option would be without health insurance.”

CBO wrote that in the second, third and fourth scenarios, “Medicaid enrollment would decrease and the number of people without health insurance would increase.”

The second scenario of limiting state taxes on health care providers would save the federal government $668 billion during the 10-year budget window. It would lead to 8.6 million people losing access to Medicaid with a 3.9 million increase in the uninsured population by 2034.

The third projection that looked at a federal cap on spending per enrollee would reduce federal spending by $682 billion during the next decade. A total of 5.8 million people would lose Medicaid coverage and 2.9 million would become uninsured under that proposal. 

And the fourth scenario, where Congress caps federal spending per enrollee in the expansion population, would cut the deficit by $225 billion during the next 10 years. More than 3 million people would lose Medicaid coverage and 1.5 million would become uninsured under this scenario.

Under the fifth scenario, where GOP lawmakers would change two Biden-era rules, CBO expects that the federal government would spend $162 billion less over the 2025–2034 window.

“CBO estimates that, in 2034, 2.3 million people would no longer be enrolled in Medicaid under this option,” the letter states. “Roughly 60 percent of the people who would lose Medicaid coverage would be dual-benefit enrollees who would retain their Medicare coverage.”