Trump legislative agenda bill: Medicaid cuts and tax breaks - Insurance News | InsuranceNewsNet

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May 22, 2025 Newswires
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Trump legislative agenda bill: Medicaid cuts and tax breaks

UPI Top News

Congress is pressing to pass President Donald Trump's legislative agenda bill ahead of Memorial Day, though some Republicans have objected to portions of it.

The budget reconciliation bill, called the "One Big Beautiful Bill Act," is 1,116 pages of legislation to fund Trump's broad agenda. Included is more than $150 billion in additional funding for defense, an extension of the 2017 Tax Cuts and Jobs Act, an increase in the maximum deduction individuals can take in state and local taxes and limitations on Medicaid eligibility.

A nonpartisan analysis of the bill by the Congressional Budget Office estimated that it will add nearly $4 trillion to the national debt.

"It's very important for people to understand why we're being so aggressive on the timetable and why this really is so important," House Speaker Mike Johnson said Sunday.

"This is the vehicle through which we will deliver on the mandate the American people gave us during the last election. You're going to have historic savings for the American people, historic tax relief for American workers, historic investments in border security."

Medicaid eligibility

Changes to Medicaid funding and eligibility are the most contentious issues Congress is mulling. Changes include an estimated $792 billion in cuts in the next 10 years, according to the Congressional Budget Office. It would be the largest cut to the program in its 60-year history.

Alex Berrios, co-founder of Mi Vecino, a Latino community advocacy and outreach organization based in Florida, told UPI his organization urged former President Joe Biden's administration that more Medicaid funding was needed. Berrios met with that administration monthly to discuss the impact of the president's policies on the Latino community.

"The services provided to the most vulnerable community members, the elderly that need medical assistance, they're not being provided in a way that's accessible to people," Berrios said. "When we're cutting costs and cutting prescription drug prices, but we're not hiring people with language skills or enough staff to handle the volume of calls, those are barriers of access for people not getting the care they need."

Rep. Chip Roy, R-Texas, has argued that previous versions of the bill did not go far enough in Medicaid reform. After voting "present" on the bill during a House Budget Committee meeting Sunday, he posted on X that changes must be made for it to pass.

"The bill does not yet meet the moment leaving almost half of the green new scam subsidies continuing," Roy posted. "More, it fails to end the Medicaid money laundering scam and perverse funding structure that provides seven times more federal dollars for each dollar of state spending for the able-bodied relative to the vulnerable."

More than 71 million people were enrolled in Medicaid and 7.2 million in Children's Health Insurance Program Managed Care Access program, or CHIP, as of December, according to the Centers for Medicare and Medicaid.

The Center on Budget and Policy Priorities, a nonpartisan research and policy institute, estimated that more than 15 million people would lose healthcare coverage and become uninsured due to the Medicaid cuts proposed.

The bill proposes measures for work requirements to qualify for coverage. Adults between ages 19 and 64 who do not have children would be required to work at least 80 hours per month. A combination of community involvement and enrollment in an educational program at least half-time also can apply to these requirements.

Originally work requirements were to be enacted on Jan. 1, 2029. Late Wednesday, the date was pushed up to Dec. 31, 2026.

Recipients of benefits would be required to submit to eligibility screenings more frequently. Rather than the 12 months that they are typically allowed, they would be subject to screening every six months.

Similar work requirements would apply to Supplemental Nutrition Assistance Program, or SNAP, benefits.

A moratorium would be set on the secretary of Health and Human Services enacting the final rule on CHIP published by the Centers for Medicare and Medicaid through Jan. 1, 2035. The final rule is meant to increase access to health services with increased standards of timely care, increased workforce and limits on wait times.

A federal ban on Medicaid and CHIP recipients receiving funding for gender transition procedures for minors is among added restrictions. Exceptions include puberty suppression or blocking drugs for the purpose of normalizing puberty when deemed medically necessary or a "verifiable disorder of sex development."

The child tax credit will again increase temporarily, this time to $2,500 per child. A Social Security number is required to qualify.

Tax breaks

The Joint Committee on Taxation estimated that the proposed tax cuts in the budget reconciliation bill will add as much as $5 trillion to the nation's debt in the next 10 years by decreasing federal tax revenues.

The largest contributor to this plan is an extension of the tax cuts enacted as part of the 2017 Tax Cuts and Jobs Act, which went into effect in 2018.

In total, taxes across the board would decrease by $568.7 billion, or 11%, starting in fiscal year 2027. However, taxes on people who make $15,000 or less, the lowest income category, would increase by 18.7%, generating an additional $1 billion over the current law.

Taxpayers who make $200,000-$500,000 would contribute $169.5 billion less than they do currently, while people who earn $1 million or more would contribute $96 billion less than at their current rate of taxation.

The tax cuts, as proposed, are to be extended permanently, meaning they require congressional action to overturn.

Among Trump's new tax policies are the plans to eliminate taxes on tips and overtime. Unlike the extension of the Tax Cuts and Jobs Act cuts, these reductions are to expire in 2028.

Qualifying tips are "any cash tip received by an individual in an occupation that traditionally and customarily received tips on or before December 2024." This does not apply to payments made that are not specified for a service trade or business. A Social Security number is required to make deductions based on tips. Where does the quote end here?

Up to $10,000 in car loan interest is another new potential tax deduction. People with an adjusted gross income of less than $100,000 or married couples under $200,000 fit the eligibility requirements for this proposal, but only if the vehicle is assembled in the United States.

Defense spending

The budget reconciliation bill includes about $150 billion in new defense spending, increasing the total budget for the Department of Defense to more than $1 trillion. It is more than a 20% increase over U.S. military spending in Trump's last year of his first term and surpasses the already record spending under former President Joe Biden for a single year.

According to the U.S. Department of Defense, it has $2.23 trillion in budgetary resources available in fiscal year 2025. It has about $782 billion in total obligations or funds it plans to spend in the fiscal year -- about 35% of its total resources.

The bill proposes billions in new funding for an array of defense equipment and facilities and development and acquisition of missiles and nuclear weapon capabilities across its military's branches.

New defense spending is directed toward border security, including $5 billion for border operations and deployment of military personnel. Funding will also go toward counter-narcotics operations.

An additional $46.5 billion is proposed for expenses related to constructing and installing border barriers, access roads, cameras, sensors and other technology meant to detect immigrant crossings.

In the bill, the Trump administration outlines its minimum goals for hiring additional U.S. Immigration and Customs Enforcement agents through 2029. In fiscal year 2025, it calls for a minimum of 2,500 new hires. Each year after through 2029 sets the minimum new hires at 1,875.

If the funding is passed as proposed, the Department of Defense would dedicate new funding toward naval capabilities. This includes $4.6 billion for a second Virginia-class submarine -- a nuclear-powered attack submarine -- in fiscal year 2027. About $5.4 billion would go toward two more guided missile destroyer ships.

Several investments are earmarked for unmanned vessels, including $3.3 billion to expand production on small and medium unmanned surface vessels. Another $1.3 billion would expand production of unmanned underwater vehicles.

Air defense and space operations are also in line for new funding. The bill proposes $7.2 billion for the development, procurement and integration of military space-based sensors. These are used to scan Earth for strategic global missile warnings. It also seeks to accelerate the development of U.S. hypersonic defense systems with an additional $2.2 billion in funding.

In 2024, Russian President Vladimir Putin disclosed that Russia launched an experimental hypersonic missile at a Ukrainian aerospace plant. It was Russia's first use of a nuclear-capable weapon in the war.

Trump aims to invest in the United States' presence in the Indo-Pacific with $1.1 billion in infrastructure within the area of its Indo-Pacific command and $1 billion for an offensive cyber operation.

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