CNN WIRE — Republicans push to for Medicaid cuts

By Lauren Fox and Sarah Ferris, CNN

Washington (CNN) — GOP hardliners are pushing party leaders to cut deeper into Medicaid in an effort to advance Donald Trump’s tax and border agenda, swing-district Republicans have been warning the president directly that it would cost him control of the House.

“There are people who want to cut to the bone,” said one GOP lawmaker who has recently spoken to Trump to urge him not to accept major cuts to Medicaid and other benefit programs. “I’m willing to cut a lot. But if you cut the essential stuff that affects people every day, you will lose the majority in two years. I can guarantee it.”

Trump’s ability to pass his agenda through a narrowly divided Congress will depend on the outcome of a quickly escalating battle between ultra conservatives and swing-district members over spending cuts. Trump and his Capitol Hill counterparts, Senate Majority Leader John Thune and House Speaker Mike Johnson, are now working to decide how deeply to slash spending on popular — yet expensive — programs like Medicaid, and how much of a potential political firestorm they’re willing to withstand.

That answer, so far, is unclear. House GOP leaders worked throughout the weekend to try to get clarity on just how far their conference and the White House would be willing to go.

While Johnson and his leadership team had preferred to set the GOP’s spending cuts goal at around $1.5 trillion as a floor, many conservatives are dead set on at least $2 trillion in cuts, with some hoping for closer to $2.5 trillion, according to people familiar with the conversations.

Both chambers need to pass an identical budget blueprint that will unlock the procedural powers to allow Trump’s border and tax package to bypass the Senate filibuster. But the House GOP’s plans to move forward with its version are, for now, stalled. And the Senate plans to forge ahead with a totally different vision of a smaller, scaled-back border and defense bill blueprint this week and then turn to tax reform later.

The House Budget Committee has no plans to go forward with a markup of its measure this week, and a member of that panel, Republican Rep. Ralph Norman of South Carolina, described the delay in one word: “CUTS!!” Norman is among the members pushing for at least $2 trillion in cuts, and was clear that Medicaid needs to be on the table.

Johnson also said Sunday that he expected the Budget Committee markup could be pushed past this week, telling Fox News: “We might push it a little bit further, because the details really matter.”

“Remember that I have the smallest margin in history, about a two-vote margin currently, so I’ve got to make sure everyone agrees before we bring the product forward,” the Louisiana Republican said.

Because Trump has already said that Social Security and Medicare — the two costliest federal programs — are off limits, many conservatives are looking, instead, at Medicaid.

But the prospect of huge cuts to a program that insures millions of low-income Americans has rankled others in the party, including that GOP lawmaker who recently spoke to Trump. This lawmaker said there are at least a dozen lawmakers from purple, suburban districts across California, New York, Pennsylvania and New Jersey who would stand up to such cuts.

Johnson will need to win over both camps — conservative hardliners and battleground centrists — to advance the budget blueprint that will unlock the procedural powers to allow Trump’s border and tax package to bypass the Senate filibuster. He has virtually no room for error, with just one vote to spare on the House floor.

Trump himself hosted key GOP leaders at the Superbowl on Sunday, as the party plots a path forward: House leadership had hoped to move its budget this week, but Senate leaders have signaled they’re not willing to wait and will press on with their own version.

In the House, much of the debate is centered on how to save at least $2 trillion to help pay for Trump’s extended tax cuts. To achieve that level of savings, Republicans would have to drastically change how much the federal government contributes to states for Medicaid services.

Right now, states get a calculated percentage of funds from the federal government based on several factors, including each state’s per-capita income. States are also guaranteed at least 50%.

But, to achieve these steep cuts, Republicans could lower the federal matching rate or set per-capita caps to reduce how much money the federal government contributes. It would radically reshape the program and require states to find alternative ways to fund the program or to reduce services for Medicaid recipients back in members’ districts.

House Budget Committee Chairman Jodey Arrington, a Republican from Texas who is in favor of the steep cuts, estimated that one of those reforms — known as Medicaid per-capita caps — could save “up to $900 billion” over a decade, according to an early draft of reforms circulated by the House Budget Committee earlier this year.

“It’s hard to react to these ideas because none of them seem to be close to 218 votes,” another Republican member told CNN on the condition of anonymity to discuss the dynamics of the debate. “While fiscal conservatives know we have to cut to get on a better track, I don’t anticipate there being 218 votes for legislation that significantly hurts needly people, many of whom are Trump supporters.”

Another huge factor is that Republicans aren’t clear on how much Trump will be willing to back. The president’s team has been open to injecting work requirements for able-bodied, working-age adults as well as cracking down on the use of Medicaid services from immigrants in the country illegally, sources told CNN. But those kinds of changes result in a few hundred billion in savings and pale in comparison to the larger, more substantive reforms.

“The only way this moves is if Trump says something decisive on Medicaid,” one senior GOP aide told CNN about the conundrum the conference is facing.

It also is not clear how the Congressional Budget Office would score something like cracking down on immigrants in the country illegally accessing Medicaid because it’s not clear how widespread of a problem that even is. The House Budget Committee’s own estimate put it at about $35 billion in savings.

Rank-and-file Republicans are hesitant to go too far down a path that slashes Medicaid given what happened in 2017 when Trump – in his first term as president – blasted House Republicans for passing a “mean” bill that gutted Obamacare because of some of the reforms that House Republicans had included that limited coverage for millions of Americans.

Meanwhile in the Senate, Budget Committee Chairman Lindsey Graham is moving full-steam ahead on an alternative plan that would save a robust tax debate for later in the year and instead provide investments in border security and defense spending now that would be offset by more limited cuts.

Graham, a Republican from South Carolina, has proposed $175 billion in border security and another $150 billion in defense spending, as well as an investment of roughly $20 billion in transportation. It’s not immediately clear where the savings to offset the spending will come from, but it’s far easier to find a few hundred billion in savings than it is to find trillions. Republicans are eyeing getting some savings by repealing parts of the 2022 Inflation Reduction Act, including some of the energy provisions, a source familiar with the discussions told CNN.