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WHAT’S IN AND WHAT’S OUT: THE LATEST HOUSE BUDGET PROPOSALS
By Lisa Desjardins, @LisaDNews
Correspondent

Capitol Hill is shifting to higher gears. Fast.

In the next two weeks, House Republicans hope to pass one of the largest bills, in dollar figures, in U.S. history. It envisions trillions in tax cuts and trillions in spending cuts.
 
We have been writing about what *may* be in this bill for months. But now we have specifics.
 
Let’s dig in.
 
Reconciliation and Trump’s ‘big, beautiful bill’
 
Reconciliation is a budget process that is used by Congress as a shortcut to get around the Senate’s 60-vote majority rules. It requires just 51 Senate votes, and Republicans have 53.
 
Not every bill can be a reconciliation bill. Among other requirements, proposals must have a substantial budgetary effect.  
 
President Donald Trump likes to call the effort on his agenda the “one big beautiful bill.” That’s the reconciliation bill. 
 
In the past two days, the three leading committees steering this process released their proposed plans:

• Energy and Commerce
• Ways and Means
• Agriculture

• CUTS. The GOP did NOT enact some cuts feared by Medicaid advocates. In particular, limits on spending per capita and direct changes to the Federal Medical Assistance Percentage, which is the government’s share of Medicaid costs.
• But. The committee proposal did freeze a key funding mechanism for states — taxes on health care providers. This is complicated. Some states, members have told me directly, have made money on Medicaid because of these taxes. But, in general, this change likely will affect the landscape in many states, forcing them to choose between robust Medicaid programs and their state budgets.
• Work requirements. This mandates an 80-hour-a-month work requirement for all states for “able-bodied” adults (those without disabilities) aged 19 to 64. 
• With these changes, how many people would lose their insurance? Democrats published an estimate from the nonpartisan Congressional Budget Office that found that some 8.6 million fewer people would have health insurance by 2034.
• Medicaid expansion sunsetted for new states. The bill turns off a 5 percent federal boost to states that expand Medicaid under the American Rescue Plan. This means new states could not get it. 
• Pharmacy benefit managers. The proposal bans “spread pricing” in Medicaid by PBMs, or companies that manage prescription drug benefits for health insurers and other large entities. It would also force more transparency in pricing by PBMs.
• Planned Parenthood. The proposal bans Medicaid payments to nonprofits engaged in family planning, reproductive health or abortion care.  
• Undocumented immigrants. States offering health coverage for them will see funds cut.
• Transition-related medical care. The proposal bans Medicaid and Children’s Health Insurance Program (CHIP) funding for transition-related medical care for youth. It would prohibit this care being considered as an “essential health benefit” for all Americans.

• Electric vehicle tax credits. This proposal repeals credits and other programs related to low-emissions vehicles. 
• Natural gas. A few things in here of note. The proposal creates an expedited permitting process, at the cost of $10 million per applicant. And it creates a $1,000,000 fee for exporting natural gas out of the U.S. to any country without a free trade agreement with the U.S. (There are more questions here.)
• Wireless spectrum. Republicans hope to raise some $88 billion from auctions.

• 2017 tax rate cuts will be permanent for all incomes. Republicans estimate that spares American families from an average 22 percent tax hike. Top rates stay the same. No millionaire tax.
• Standard deduction. Will increase by $2,000 for couples and $1,000 for individuals for four years.
• Child tax credit. The max goes from $2,000 to $2,500 for four years. This is limited to, essentially, U.S. citizens only.
• New account for kids. Kids born over a specific, nearly five-year period, who are U.S. citizens at birth, would get a $1,000 account for families to invest.
• Tips. No taxes on tips for four years. The Treasury Secretary will determine which occupations get this.
• Overtime. No taxes on overtime for four years. High-earners blocked.
• Seniors: What’s out. There is NO proposal to end taxes on Social Security, a Trump promise.
• Seniors: What’s in. Instead, there is a new deduction of $4,000 for those over 65 who make $75,000 or less ($150,000 for couples). This also is for four years.
• SALT. The bill caps state and local tax deductions at $30,000 for people with up to $400,000 in income. That’s too low for a bunch of New Yorkers and California Republicans.
• Corporations. Few things change for them in a tax system that benefits them now.
• Universities are in a different boat. Some could pay up to 21 percent on endowment income. The rate depends on the size of the endowment/wealth.
• Private K-12 schools. There’s a new proposal to allow taxpayers to contribute up to 10 percent of their income toward a private school scholarship fund.

• What’s out: EV tax credits. The credit for most new EVs would end at the end of this year.
• Clean electricity production and investment credits are phased out over next six years.
• Zero-emissions nuclear credits are also phasing out.

• SNAP cost sharing. Right now, 100 percent of SNAP benefits are funded by the federal government. This bill pushes more of the cost onto states, based on how poorly the state handles its payments (its error rate). This proposal has all states paying a minimum of 5 percent of SNAP costs, with the highest error-rate states having to pick up a whopping 25 percent. This will be a hard sell in the Senate.
• SNAP work requirements. The bill expands work requirements to “able-bodied” adults, or those without disabilities, up to age 64. (Current limit is 54.). It also limits the exemption for people with a child to children under 7 years old.
• Farm bill. This bill includes some traditional farm bill policy/funding changes. Many people would prefer to pass a farm bill, but the GOP has been unable to get agreement.

 
Big picture
 
These committee bills are good tests for what can pass and lay the critical groundwork for any final bill. 
 
Keep in mind: We expect the most important draft to come right before this bill hits the House floor. The “manager’s amendment” will be the most important draft for House Republicans.
 
And the Senate has yet to weigh in. Republicans there will want changes as well. 
 
It is a moment where the Trump agenda in Congress can start rolling down the rails — or get off track.
 
And we will be watching.