Senate Finance Committee Chair Mike Crapo (R-Idaho) on June 16 unveiled legislative text of the Finance Committee’s title of the GOP reconciliation bill. Pursuant to the budget resolution adopted by the Senate earlier this year, the legislation contains several Republican tax policy priorities, including a permanent extension of the 2017 Tax Cuts and Jobs Act (P.L. 115-97) and the restoration and permanent extension of several business tax deductions, including those for research and development expenses, capital investments, and interest on debt [refer to Washington Highlights, April 4]. Similar to the House-passed reconciliation bill (H.R. 1), the committee proposes to finance these tax policies through cuts to health care and higher education.
The legislation deepens the House-passed reconciliation bill’s proposed cuts to the Medicaid program. Similar to its House companion, the Senate bill proposes to restrict Medicaid enrollment through more frequent eligibility redeterminations, cost-sharing for the Affordable Care Act (ACA) expansion population, and the imposition of mandatory work requirements as a condition of Medicaid eligibility. The Senate text similarly mirrors the House bill’s proposed cap on state-directed payments and moratorium on provider taxes, and further restricts the use of these taxes by states that chose to implement Medicaid expansion under the ACA. The AAMC previously highlighted its opposition to these policies in a June 5 letter to Senate Republican leadership (PDF), outlining how provider taxes and SDPs are used to bolster the health care safety net and ensure access to care for the Medicaid population [refer to Washington Highlights, June 6].
Similar to the House-passed One Big Beautiful Bill Act (H.R. 1), the Senate bill also would increase the endowment tax on certain institutions of higher education. The legislation preserves the House bill’s proposed tiered tax structure based on an institution’s student-adjusted endowment. However, the tax for each tier is lower than the House proposal, which would impose an excise tax of 21% on universities with the highest endowments, compared to the Senate bill’s maximum rate of 8% for institutions with a student-adjusted endowment of at least $2 million [refer to Washington Highlights, May 16]. The Senate bill also retains the House bill’s AAMC-supported policy of reinstating a partial deduction for charitable contributions for non-itemizers (PDF) [refer to Washington Highlights, Dec. 6, 2024]. This deduction is up from $150 for single filers and $300 for married joint filers in the House bill.
Republicans aim to complete action on reconciliation before the Fourth of July recess, and the larger, combined Senate reconciliation package is expected to be considered by the Senate in the coming weeks.