Senate Republicans short votes to pass Trump agenda bill without more changes

Senate Republicans ended an abbreviated workweek in Washington on Wednesday without having locked down enough support to pass President Trump’s One Big Beautiful Bill ahead of a potential floor vote next week.

The issues GOP leaders have to resolve to get at least 50 of their 53-member conference to support the legislation are numerous. Vice President J.D. Vance’s vote can break a tie.

They include fiscal hawks’ broad frustration about the measure’s deficit impact and more nuanced concerns from senators about the effect that cuts to Medicaid and other programs would have on their states.

“We are in conversations with all of our members,” said Senate Majority Leader John Thune, South Dakota Republican.

Wisconsin Sen. Ron Johnson and other GOP fiscal hawks such as Sens. Mike Lee of Utah and Rick Scott of Florida are still pushing for steeper spending cuts.

“There’s no way I’d vote for this thing next week. We don’t have time,” Mr. Johnson said.

Mr. Trump wants the bill passed by July 4, a message his chief of staff, Susie Wiles, underscored to Senate Republicans before they departed town for the Juneteenth federal holiday.

Mr. Johnson wants a commitment that Republicans will tee up “another must-pass piece of reconciliation legislation” to fulfill Mr. Trump’s promise to balance the federal budget.

The senator talked to the White House about setting up a “budget review panel” to help identify spending reforms for a “second bite at the apple.”

“But I need a forcing mechanism,” Mr. Johnson said. “Talk is cheap; what you write on a piece of paper is cheap.”

Mr. Johnson said the White House and GOP leaders have yet to offer a forcing mechanism. He floated two options: a smaller increase in the debt limit, which would set up a new must-pass legislative deadline before the end of the current Congress; leaving things out of this bill that Republicans would be incentivized to pass later, like the president’s campaign promises of no tax on tips, overtime and Social Security.

A smaller debt limit increase could win over Sen. Rand Paul, Kentucky Republican, who is vowing to oppose the bill because it lifts the borrowing limit by $5 trillion.

Meanwhile, Mr. Lee is working to ensure clean energy tax credits from President Biden’s Inflation Reduction Act are fully repealed during Mr. Trump’s presidency.

North Carolina Sen. Thom Tillis and other more moderate Republicans successfully pushed to extend the phaseout timelines in the House version and still want additional tweaks, making a compromise with conservatives difficult to land.

The balancing act between the GOP factions is also posing problems for the Medicaid reforms in the bill.

Republican Sens. Josh Hawley of Missouri, Susan M. Collins of Maine and Lisa Murkowski of Alaska are concerned certain cuts go too far, while Mr. Scott and conservatives want further reductions especially after the Department of Government Efficiency spotlighted billions in waste and fraud in Medicaid.

Mr. Hawley is leading a mission against a change that would limit taxes on health care providers to finance their share of Medicaid because he’s concerned it will reduce funding for rural hospitals.

Republicans are targeting what they call a money-laundering scheme in which states use their provider tax revenues to increase Medicaid payments to the same providers, which then inflate the cost of their Medicaid programs and the share that the federal government must contribute.

A 1991 law sought to crack down on the practice by prohibiting states from guaranteeing providers would be “held harmless” and receive their money back from the taxes. But current federal regulations say that requirement doesn’t apply if the provider tax on net patient service revenues is 6% or less, which is known as the safe harbor limit.

The Senate bill would gradually lower the safe harbor limit to 3.5% by 2031 for the 40 states and the District of Columbia that opted to expand Medicaid under Obamacare to include low-income, able-bodied adults without dependents earning up to 138% of the poverty level.

Those states receive a 90% federal contribution to cover additional beneficiaries from the expansion and thus are more incentivized to use higher provider taxes and return payments allowed under the safe harbor to inflate the amount of funding they receive from the federal government.

Dr. Mehmet Oz, the head of the Centers for Medicare & Medicaid Services, said after a lunch meeting with Senate Republicans on Tuesday that states dramatically increased provider taxes once it became clear they could “game the system.”

He argued “there are better ways” for states to finance their Medicaid programs that would ensure money is “spent wisely in a very transparent way.”

Mr. Hawley said Missouri officials are telling him the Senate provider tax change would lead to a $1 billion annual reduction in Medicaid funding flowing to hospitals.

“I’ve got 35 hospitals, rural hospitals right now that have fewer than 25 beds, and over half of those are currently in the red,” he said. “So I don’t want to see any of those close. We already had a bunch of rural hospital closures.”

Mr. Hawley has raised the issue directly with the president, who told him “that doesn’t sound good” and that he “really didn’t want to do any more Medicaid cuts at all, over and above what the House did.”

The House bill would require states to freeze their Medicaid provider tax rates but didn’t touch the safe harbor limit. The Senate bill freezes rates for nonexpansion states.

Dr. Oz said the administration doesn’t have a preference between the House and Senate approaches but that neither would affect the viability of rural hospitals.

“In fact, the provider tax and the state-directed payments are often used to pay institutions that have the best connections to the government of the state, not necessarily the hospitals that need the help the most,” he said.

Mr. Hawley said he’s offered various suggestions to GOP leaders, like a carve-out for rural hospitals or a separate fund to keep them afloat, that could help earn his support. Mr. Scott supports the rural hospital fund idea, and Mr. Thune said a solution “to help smooth the rural hospital issue” is in the works.

Sen. Jim Justice, West Virginia Republican, is also opposed to the Senate proposal to lower the safe harbor limit and said he’d prefer the House’s approach in freezing provider tax rates.

Yet he wouldn’t go as far as to say he would vote against the legislation if the provision remains unchanged. He suggested he and other Republicans will ultimately have to compromise and accept some policies they don’t love to secure their larger priorities, like sweeping tax cuts.

“You may have to hold your nose on some things that you just absolutely don’t like, because we can’t like everything,” he said.

Mr. Scott wants more Medicaid reforms, specifically an end to the 90% share the federal government must contribute to states that expanded Obamacare. He would give states two years to adjust before the change takes effect.

Other senators are largely pleased with the way the bill is shaping up but are still pushing key tweaks.

Sen. Tommy Tuberville, Alabama Republican, wants further changes to a proposal that would require states to contribute a share of food benefit costs under the Supplemental Nutrition Assistance Program if they have high rates of erroneous payments.

And Sen. Mike Rounds, South Dakota Republican, is pushing to tighten language letting government-owned spectrum be sold at auction for commercial use. He wants to ensure certain bands of spectrum are set aside solely for Defense Department use and said there’s a provision in the bill “which makes that questionable.”

Mr. Trump warned on Wednesday that any senator who votes against his signature bill will “be finished in politics.”

Mr. Johnson said he’s not worried, noting, “I’d be happy to be done with politics.”