After marathon markups earlier the week of May 12, Speaker Mike Johnson (R-LA) held meetings May 15 with multiple factions within the Republican caucus trying to iron out final details.

One unfinished item, changes to the state and local tax (SALT) deduction cap (SALT cap), which is of particular importance to House Republicans in New York, New Jersey, and California. How the SALT cap will be addressed by the reconciliation bill is still under debate. Since raising the SALT cap will cost money, others in the Caucus are demanding more savings. Those that want more deficit reduction in the bill also feel from an ideological perspective that the Medicaid cuts are not deep enough.

At the same time, the Florida delegation has signaled that they want the provider tax policy changed because Florida has low hospital provider taxes and feels they are being punished by the moratorium policy that is in the bill; this position from Florida is consistent with what LeadingAge has been told in meetings with that delegation. There are also unresolved issues with Inflation Reduction Act green energy credits and gun policy.

The House Budget committee held a meeting May 16 at 9 a.m. ET to vote the consolidated reconciliation package out of committee. Opening statements demonstrated the fractures within the Republican Caucus as Freedom Caucus members expressed concerns that the bill didn’t go far enough. Congressman Roy (R-TX) spoke ardently on his concerns that Medicaid work requirements don’t begin for four years (Jan. 1, 2029), and other concerns that the package is imposing increases on the deficit in the short term. Insiders are reporting that Speaker Johnson (R-LA) has agreed to accelerate the implementation timeline to 2027. Four republican colleagues joined Mr. Roy in voting no in the budget committee, therefore causing a failure to report the bill from committee. Congressman Smucker (R-PA) changed his vote from yes to no, telling the press after the meeting that the change allows him to raise a motion of reconsideration when the Budget Committee reconvenes.

In addition to work requirements, other implementation timelines that could be moved up to deepen Medicaid cuts include reduced retroactive eligibility (currently Oct. 1, 2026), more frequent eligibility determinations (currently Oct. 1, 2027), elimination of good faith recoupment waiver (currently FY 2030), and changes to provider tax structures. Delaying the implementation dates for these policies, including work requirements, were said to be negotiated compromises from backroom discussions with republican governors. Transitioning the implementation burden to current administrations could cause significant backlash and curtail gubernatorial support for the package. This provides an excellent short-term advocacy opportunity with republican governors’ offices.

Much negotiation and dealing is anticipated over the weekend. The budget committee will still need to advance the bill and is hoping to do so in their tentatively scheduled meeting on Sunday May 18 at 10 p.m. ET. No changes would be made until the bill is considered in the Rules Committee, which may be pushed from its previously anticipated markup on May 19. If changes can be agreed to, and an amendment is prepared for the rules committee, and voted out during a Rules markup Monday, the full House could see a floor vote as early as May 21.

The whole situation remains very much in flux. We still plan to issue an action alert mid next week to ask that Members oppose the bill on the House floor.

Follow Budget Reconciliation 2025 developments via our serial post.