Final Budget Resolution Codifies Unreconciled Differences on Medicaid Cuts in House and Senate Reconciliation

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Updated on: April 10, 2025

Republicans in Congress are hoping to use reconciliation to extend expiring tax cuts and make major changes to federal spending on programs including Medicaid. The first step in that process is for the House and Senate to pass a concurrent budget resolution, providing Congressional committees with reconciliation instructions, which happened on April 10.

The budget resolution is unusual because it establishes different tracks for reconciliation in each chamber: House committees are instructed to increase deficits by $2.3 trillion, with major cuts to Medicaid; and Senate committees are instructed to increase deficits by what amounts to $5.8 trillion, without clear implications for Medicaid cuts. The plan is likely to spur major differences in how the two chambers proceed.

The bill allows for total deficit increases of nearly $6 trillion, reflecting the assumption that Congress can use a “current policy baseline,” meaning they don’t need to pay for extending expiring tax cuts (which cost $4.5 trillion). It requires House committees to offset  the tax cuts by at least $1.7 trillion, or the tax cuts will be reduced dollar-for-dollar., but only $4 billion in spending cuts for Senate committees, a difference that has created significant consternation among some House Republicans. Extending the tax cuts is estimated to cost $4.5 trillion between 2025 and 2034.

Regarding Medicaid, the budget resolution issues separate committee instructions for the House and Senate that do not align:

• The House Energy & Commerce Committee (which has jurisdiction over Medicaid) is instructed to reduce the federal deficit by at least $880 billion over 10 years, with nearly all those cuts expected to come from Medicaid.
• The Senate Finance Committee (which has jurisdiction over Medicaid and extending the tax cuts) is instructed to increase the deficit by $1.5 trillion over ten years (or $5.3 trillion if extending the tax cuts were counted).

Finally, the budget plan includes a provision allowing the Senate Budget Committee chair to revise reconciliation instructions for legislative activity “relating to protecting the Medicaid program.” That provision—an amendment from Senator Dan Sullivan (R-AK)—has been construed as potentially “protecting Medicaid” because it mentions changes that would “strengthen and improve Medicaid for the most vulnerable.” However, it’s unclear what changes might meet those requirements and whether cuts to Medicaid will be relabeled as eliminating fraud and abuse or protecting the program.

The budget resolution may not specify Senate Medicaid cuts, but the Energy & Commerce Committee must search for $880 billion in savings, forcing major cuts to Medicaid. It is unknown what the Senate Finance Committee package might include, how the House and Senate will align the differing approaches, and whether there will be any attempt to offset the costs of trillions of dollars in tax cuts.