House Reconciliation Bill Advances to the Full House

It has been a busy couple of weeks for the U. S. House of Representatives, whose Committees were tasked with producing legislation that would comply with their instructions in House Concurrent Resolution 14 (H. Con. Res. 14), the Concurrent Resolution on the Budget for Fiscal Year 2025. The House Committee on the Budget, met on May 16, to assemble the provisions from the other House committees into one reconciliation bill and report that legislation to the House as required by the Congressional Budget Act. However, the package was defeated by a vote of 16 to 21, with five Republicans joining all 16 committee Democrats to vote no. The main Republican objection was that the bill would increase the Federal deficit over the next 10 years. However, the Committee met again, on May 18, to reconsider the vote. This time, the measure passed by a vote of 17 to 16, with three Republican members voting “Present.”

The measure will now go to the House floor this week, according to Speaker of the House Mike Johnson (R-LA). It is likely that there will be unspecified changes made to the bill by the House Rules Committee, which sets the terms for all legislation considered in the lower body, to satisfy the recalcitrant majority party members.

The Senate Committees will also put together their own package to comply with their instructions under H. Con. Res. 14. They will do so possibly this week, or they may wait for final action by the House.

The House Committees with jurisdiction over programs important to oral health education included several provisions of concern:

The House Energy and Commerce Committee (E& C) held a 26-hour markup earlier last week on its instructions to reduce the deficit by $880 billion over the next 10 years. The markup ended with the health care section of the bill being passed 30 to 24 along party lines. The Committee oversees a broad range of issues, including energy, environment, commerce and technology, but the primary focus of the markup was on the health-related provisions, particularly those affecting the Medicaid program.

• In his opening statement, U.S. Rep. Brett Guthrie (R-KY), Committee Chair, emphasized proposed reforms to Medicaid, describing them as efforts to enhance the program’s long-term sustainability and better serve populations such as mothers, children, the elderly and individuals with disabilities. He said the reforms in the reconciliation bill will stop waste, fraud and abuse of Medicaid and work to close loopholes and inefficiencies.
• U.S. Rep. Frank Pallone (D-NJ), E&C Committee Ranking Member, criticized the proposed changes, arguing that the bill would result in significant Medicaid cuts and millions of Americans losing access to health insurance coverage.
• Throughout the markup, Democrats and Republicans clashed over whether the reconciliation bill would result in significant cuts and loss of coverage for vulnerable Americans. Republicans contended that the reforms in the bill will only clean up waste, fraud and abuse while adding work requirements. Democrats argued that the bill would harm health outcomes for those who rely on Medicaid. Both sides of the aisle drew on constituent stories to support their argument. Republicans rejected numerous amendments offered by Democrats that attempted to limit Medicaid cuts.

The rejected bill contains multiple provisions with changes to the Medicaid program, which include the following measures:

• Beginning in 2029, able-bodied Medicaid recipients aged 19 to 24 will be required to work at least 80 hours per month.
• State provider taxes will be frozen, which all but one state uses to finance Medicaid. States are also prohibited from establishing new taxes. (These taxes affect mostly hospitals and extended stay facilities.)
• States will be required to conduct eligibility assessments for Medicaid expansion enrollees every six months, rather than annually.
• Medicaid expansion recipients with incomes above 100% of the federal poverty level will be subject to out-of-pocket costs of up to $35.

The Congressional Budget Office estimates that 10.3 million beneficiaries would lose coverage on the provisions contained in the E&C bill.

The House Ways and Means Committee, the tax-writing committee, has instructions to produce legislation that would add $4.5 trillion to the deficit over the next decade. It completed its markup of legislation to do that on May 14.

One of the provisions contained in Sec. 112021 of their bill would amend a provision included in the 2017 tax bill that became Sec. 4968 of the Internal Revenue Code entitled, “Excise tax based on investment income of private colleges and universities.” The 2017 provision provided for a 1.4% excise tax on the net investment income of private institutions with at least 500 tuition-paying students. The new provision creates a tiered system based on the institution’s student-adjusted endowment (see the table below). The student-adjusted endowment is derived by dividing the fair market value of the institution’s investment income at the end of the previous tax year by the number of eligible students. (An eligible student must be a U.S. citizen, permanent resident or temporarily in the United States with the intention of becoming a citizen or permanent resident.)

Modified Excise Tax Rate on Private Colleges and Universities