The Senate has dramatically modified its tax and spending bill in its pursuit of securing support from key legislators, particularly focusing on Idaho’s Senator Lisa Murkowski as a crucial vote.
Senator Murkowski has openly voiced her concerns regarding significant proposed cuts to crucial programs such as Medicaid and SNAP (Supplemental Nutrition Assistance Program), commonly known as food stamps.
A joint op-ed from Alaska’s legislative leadership, published in The New York Times, alerted the public to the consequences of these cuts, stating that approximately 40,000 Alaskans would lose health coverage, while thousands more would also be stripped of their SNAP benefits.
The leaders of Alaska, including state House Speaker Bryce Edgmon and state Senate Majority Leader Cathy Giessel, warned that shifting the cost burden from the federal government to the state would plunge Alaska into a severe budget deficit, cripple its economy, and hinder the ability to provide essential services.
To assuage concerns from moderates worried about the magnitude of these budget cuts, the recent amendments made to the bill appear largely superficial.
For instance, although the program aimed at supporting rural hospitals saw a modest increase from $15 billion to $25 billion, this is trivial compared to the staggering $930 billion in Medicaid cuts that the bill entails, as per preliminary estimates from the Congressional Budget Office.
Moreover, the cuts to the provider tax remain largely unchanged, albeit postponed by a year from 2027 to 2028; it is uncertain whether the parliamentarian will approve this delay.
Notably, Alaska stands out as the only state that does not utilize the provider tax maneuver to amplify resources for its Medicaid program.
In a swift response to Murkowski’s apprehensions, a series of benefits have been designed specifically to entice her support.
The bill proposes an increase of 25 percent in the federal share of Medicaid payments for the state with the highest separate poverty guideline, which happens to be Alaska.
Additionally, various programs have been bundled to provide benefits to “noncontiguous states,” a term referencing both Alaska and Hawaii.
These benefits include an exemption from work requirements for SNAP, enhancements in Medicare reimbursement rates for select healthcare providers, and a waiver from the cost-sharing requirements for SNAP funding.
As long as the noncontiguous state demonstrates efforts toward implementing a corrective action plan aimed at minimizing error rates in the program—which is necessary since Alaska has the highest error rates nationally—they can evade the cost-sharing obligations.
The reasoning behind targeting Hawaii alongside Alaska is to circumvent the regulations of budget reconciliation, which stipulate that all measures included must primarily have a budgetary motive.
Isolating Alaska might attract criticism that these provisions constitute mere policy benefits exclusive to the state.
However, by incorporating “noncontiguous states” in the language, the Republicans can argue that these changes reflect the unique geographic challenges faced by states with higher living costs.
Despite the tenuous connection, they appear confident in winning the parliamentarian’s approval based on the inclusion of this language in the final draft.
Nevertheless, several benefits strictly cater to Alaskan interests.
For instance, specific tax exemptions have been introduced for fishing villages in western Alaska, and Alaskan whaling captains may now deduct up to $50,000 of their business expenses as charitable contributions, a considerable increase from the previous $10,000 cap.
These newly introduced perks echo the infamous “Cornhusker Kickback,” which was an effort to increase Nebraska’s federal Medicaid funding during the Affordable Care Act’s deliberations to sway then-Senator Ben Nelson, a Democrat.
However, Murkowski’s haul not only features a boost in Medicaid funding for Alaska but also includes a plethora of additional provisions.
It’s increasingly likely that the final version may exclude some of these perks as they await the parliamentarian’s stringent review.
In the interim, major cuts to clean energy tax credits have been reinstated, while last-minute additions include the Orphan Cures Act, designed to exempt certain drugs from ongoing Medicare price negotiations.
Moreover, expansions regarding health savings accounts have also returned to the bill, all targeted at garnering support from House conservatives—who remain a significant hurdle for passing the legislation in the House.
It remains uncertain if these strategies will be sufficient, as the bill is anticipated to be more costly than its initial proposal.
Another contentious amendment pertains to the SALT (state and local tax) deduction cap, which has been raised from $10,000 to $40,000 for a five-year period before reverting back to the original limit.
One member of the SALT Caucus, Representative Nick LaLota from New York, has publicly stated he plans to vote against the measure due to this change.
Additionally, Representative David Valadao from California announced his opposition owing to the Medicaid alterations affecting his district known for its high Medicaid dependency.
While the House could still stride ahead without these two dissenters, they cannot afford to lose many more votes.
As the crucial vote approaches, all eyes are on Murkowski, as her support is pivotal to advancing the bill.
The Senate has scheduled the vote for 4:00 PM ET today, making Murkowski’s decision a significant factor in determining the future of this contentious legislation.
image source from：prospect
