(WASHINGTON) — The Senate’s rule enforcer dealt a major blow to Senate Republicans Thursday morning by ruling a key Medicaid provision in the megabill that advances President Donald Trump’s legislative agenda is out of order.
Senate Parliamentarian Elizabeth MacDonough found that a provision that cracks down on states’ use of health care provider taxes to help collect additional Medicaid funding is not in keeping with the rules governing a package like the “One Big Beautiful Bill Act,” which senators are making changes to as Republicans work to meet Trump’s Fourth of July deadline for passage.
MacDonough’s ruling means that Senate Republicans will need to retool the provision or scrap it entirely if they want to move forward with attempting to pass the bill using only GOP votes.
The ruling is a major setback for Republican leadership, who are under pressure to expeditiously move it to the Senate floor to meet the July deadline. This ruling will require potentially major reworks of the bill with relatively little time to accomplish them. And no matter how they change it, leaders are likely to frustrate some faction of the Republican conference, which could imperil the bill’s passage.
The provider tax credit provisions had been emerging as a thorn in leadership’s side even before MacDonough’s ruling.
For days, a small but critical faction of the Senate GOP conference has been raising major flags about the way this cut to states’ Medicaid revenue might kneecap rural hospitals in their states. A number of Republicans in the Senate were threatening to withhold their votes for the package because of these changes to the provider tax, so for that group, MacDonough’s ruling is likely a welcome one.
But changes to the provider tax rate was one of the major ways that Republicans planned to reform Medicaid and cut costs. Getting rid of this provision will either raise the cost of the package and risk rankling a number of conservative Republicans, or force Senate Republicans back to the drawing board to find another way to cut costs.
If changes are made, all eyes will be on a handful of Senate Republicans. Some changes could be deal breakers for those whose vote is critical to moving the bill over the finish line.
Last weekend, MacDonough carefully scrutinized the House-passed bill for possible violations of the Senate’s rules. She has already issued a number of decisions that Democrats are touting as major victories.
This review, called the Byrd Bath — named after the late Sen. Robert Byrd, who helped institute the rules governing budget reconciliation packages, is still underway in the Senate.
Any provision that MacDonough rules out of order with the Senate’s rules will have to be stripped or else the legislation will be subject to the 60-vote threshold in the Senate. Republicans need to avoid this, or they won’t be able to pass the bill.
There are already cries from some Republicans for Majority Leader John Thune to lead the Senate in a vote to overrule the parliamentarian. The Senate technically can overrule MacDonough with a simple majority of votes. But Thune has long said he won’t overrule her because he has vowed not to touch the Senate’s filibuster rules.
It’s not yet clear whether this ruling will force a further delay in efforts by leadership to get the One Big Beautiful Bill Act to the Senate floor late this week or over the weekend.
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