PPC Update
July 11, 2025
BUDGET RECONCILIATION UPDATE: CONGRESS PASSES OBBBA. On July 3, the House voted 218-214 to pass the Senate’s version of President Donald Trump’s signature domestic policy legislation, the “One Big Beautiful Bill Act” (OBBBA). President Trump signed the bill into law in a July 4 signing ceremony. The legislation fulfills many of President Trump’s 2024 campaign promises, namely extending the expiring tax cuts from the 2017 Tax Cuts and Jobs Act, while also significantly increasing spending on the military and immigration enforcement to carry out the President’s mass deportations. The bill pays for these by enacting steep cuts to Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and clean energy and climate change programs. The bill in total consists of roughly $1 trillion in cuts to Medicaid and SNAP.
Final passage in the Senate required Vice President J.D. Vance to cast the tiebreaking vote in a 51-50 vote. Senate Majority Leader John Thune (R-S.D.) pushed through the reconciliation bill after a month of intense debate over issues including Medicaid and SNAP cuts, as well as the impact of the bill on the deficit. Senators Susan Collins (R-Maine), Rand Paul (R-Ky.), and Thom Tillis (R-N.C.) joined all Democrats in voting against the bill. Leadership received pushback from both the moderate and conservative wings of the GOP over the bill’s budgetary impacts and proposed cuts to Medicaid. After Thune’s path became more constrained when Sen. Tillis announced he would not run for reelection in 2026, Senate leadership chose to focus their efforts on earning the vote of Sen. Lisa Murkowski (R-Alaska). Leader Thune ultimately accomplished this by doubling the relief included in the bill for rural hospitals from $25 billion to $50 billion, and increasing relief for Alaska from the bill’s new state requirements for SNAP, which include lowering the work requirements for SNAP benefits and postponing the date at which the state would have to begin contributing for SNAP benefits. A similar carveout for Medicaid was struck down by the parliamentarian.
The Senate’s version of the OBBBA headed back to the House, where, despite facing some resistance from Republicans, it ultimately passed. House Speaker Mike Johnson (R-La.) and the White House worked to win over the remaining holdouts. Members of the House Freedom Caucus, in particular, were displeased with several of the changes made in the Senate version, including the removal of harder restrictions preventing undocumented immigrants from using Medicaid and softening provisions targeting waste, fraud, and abuse in SNAP. Alternatively, a group of moderate House Republicans had voiced frustration over the more significant cuts to Medicaid included in the Senate version. While it is unclear what the remaining holdouts had secured in return for their votes, in the end, very few Republicans voted against the bill, with Reps. Brian Fitzpatrick (R-Pa.) and Thomas Massie (R-Ky.) being the only Republicans to join all Democrats in voting against final passage.
The Senate’s version of the bill cuts Medicaid more deeply than the version originally passed by the House in May. Of note , the Senate proposal extends work requirements to parents with children over the age of 14, whereas the House proposal exempted parents with children from newly instituted work requirements. Additionally, the House-passed OBBBA had proposed cracking down on provider taxes, a key mechanism long used by states to raise their share of Medicaid funds, by instituting a moratorium on new or increased provider taxes for Medicaid; the Senate proposal went further by gradually reducing the top allowable provider tax rate from 6 percent to 3.5 percent between 2027 and 2031. By making the cuts to Medicaid even more severe than the version that passed the House, the final version of the bill threatens to result in a larger number of individuals losing health insurance coverage. The CBO estimates that the Senate version of the bill will result in 11.8 million more people losing health insurance coverage, which is one million more than projected under the House version. However, that figure only includes Medicaid cuts. When accounting for the fact that both House and Senate versions allow the enhanced ACA premium subsidies to expire at the end of this year, as well as provisions making it harder for states to maintain their ACA Medicaid expansions, the Washington Post has estimated that the Senate version could result in a minimum of 17 million people losing health insurance by 2034.
A major source of savings included in the Agriculture section of the OBBBA that would have required states to pay a portion of SNAP benefit expenditures depending on their systems’ error rates was initially struck down by the Senate parliamentarian. Subsequently, the Senate revised the provision to give states additional time for obtaining data that would determine their payment obligations for SNAP benefits. Some states will be exempt from paying for SNAP if they can get their payment error rates below 6 percent. The Senate bill also expands work requirements in SNAP to parents whose youngest child is at least 14 years old while also severely restricting waivers for areas with poor economic conditions.
The PPC organizations have been engaged throughout every step in this budget reconciliation process, sounding the alarm on the impact of this legislation on children and families. Many academic pediatricians made their voices heard throughout this process. Thank you for your tireless advocacy, and every effort taken to illustrate what this bill means for the health of children, families, and communities.
State of Play. Congress will soon turn its attention to developing and negotiating government funding bills that will ultimately need to be signed into law by the president. The initial deadline for funding the federal government is September 30, the end of the current federal Fiscal Year, though Congress is likely to pass a stopgap spending measure to keep the government open while they continue negotiating final spending bills. It’s important to note that this process is separate from the budget reconciliation process that has just concluded, which did not impact federal funding for the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and other critical health care and public health agencies. Thank you for your continued advocacy on that front.
The PPC will be closely monitoring and sharing information with its member organizations as the OBBBA is implemented.