Senate Republicans are racing the clock, trying to meet President Trump's demand that they pass his domestic agenda bill by July 4th as they work to resolve major sticking points inside the GOP conference.
While Senate committee leaders have made several significant changes to the bill in recent days, the issue of funding for rural hospitals has emerged as a major roadblock.
Senate GOP leaders are also waiting to learn if major tax provisions in the bill meet strict Senate rules for what can be included in the bill and still pass with a simple majority vote. The Senate parliamentarian — a non-partisan member of the body's professional staff — is still reviewing those elements to make sure each has a direct impact on the budget, among other regulations. Several provisions in the House version, such as one barring nationwide judicial injunctions, have already been cut in that review.
Senate leaders initially hoped to release their bill early this week. But the debate over hospitals, taxes and other issues are threatening to undermine Senate Majority Leader John Thune's goal of passing the bill before the week is done.
Thune can only afford to lose three GOP votes in order to pass the bill.
The fight over Medicaid and rural hospitals
Medicaid — which provides health coverage to low-income people and is one of the largest payers for health care in the United States — has been among the most difficult provisions in the bill. At issue is a directive that states cut the tax they impose on Medicaid providers from 6% down to 3%. Critics say that tax is an important part of the funding equation in many states. They say the change will result in major challenges for rural hospitals that rely on that money. It is part of a complex formula that determines how much federal funding is received as part of the joint program run with states.
Mehmet Oz, Trump's director of the agency overseeing the Medicaid program, met with Senate Republicans last week and defended the need to crack down on how states finance Medicaid. He called the bill "the most ambitious health reform bill ever in our history."
He argued the changes will curb the growth of the program and add new work requirements that will preserve the program for the most vulnerable.
But Sen. Josh Hawley, R-Mo., has argued that President Trump negotiated the House bill and the changes would force the Senate to enter into drawn-out negotiations with the House.
Hawley noted that his legislation to provide health care to those impacted by exposure to radiation from the testing of atomic weapons was included in the package. "But they have to have a hospital to go to," he added. "So it's a problem."
In an effort to win over Republicans like Hawley, the Senate Finance Committee on Wednesday put out a new compromise to set up a stabilization fund to help rural hospitals. The plan would direct $15 billion over a 5-year period to states in need. However, that falls short of what other senators say is needed.
Maine Republican Sen. Susan Collins has said the fund needs to be closer to $100 billion. She told reporters in the Capitol on Wednesday that provisions that "are far more draconian than the House are problematic" and said leaders should work this out carefully rather than rushing towards a vote this week.
"Well, I would prefer that we take more time and try to sort through these extremely complicated issues," she said.
Sen. Thom Tillis, R-N.C. has also warned that adequately addressing the issue would be very costly.
"I think if you examine it further, you're probably going to have to go much more than what people are anticipating if you really want to preserve rural access," Tillis told reporters earlier this week.
Tillis, who is running for reelection in 2026, served in the state house in his home state before coming to Congress and warned states wouldn't be able to make up the gap in funding due to cuts in the bill. "If you got a $38.9 billion cut estimated in North Carolina over 10 years, you're going to have to repeal expansion and do a number of other things to get the books in order. I'm just saying, people need to just go in with their eyes open."
Majority Leader Thune acknowledged Republicans needed to find a way to address concerns from several Senators. He said the discussions have been underway for several days to "ensure that the impact on rural hospitals be lessened — be mitigated."
Other divisions remain
Other Republicans are concerned about the overall impact of changes to Medicaid resulting in major cuts in the rolls in their states — which would mean shifting costs to states to cover those low-income, elderly and disabled patients who rely on the program.
Sen. Rick Scott, R-Fla., is one of a group of conservatives who are pressing for deeper spending cuts in the bill and told reporters he met with the president recently. He said he wants to pass a bill, but "we've got to have to have fiscal sanity."
Sen. Ron Johnson, R-Wisc., continues to say Congress needs to roll back spending levels to pre-pandemic levels, and that the legislation adds to the deficit.
Fiscal hawks in the Senate have also raised concerns about the fate of energy tax credits. Republicans chose to roll back or end many of the credits included in the Inflation Reduction Act that was passed under President Biden in order to find more cost savings. But that plan has frustrated even some in their own party who say constituents and businesses are already using those credits and would be negatively affected if they are eliminated.
Even if Thune is able to resolve all of the issues in his chamber, several different factions of House Republicans are warning they will oppose the latest bill that's emerging from the Senate.
The tax debate also includes a side negotiation with House GOP lawmakers who represent districts in New York and California who insist the Senate needs to preserve a state and local tax break, known as SALT, that was negotiated with House Speaker Mike Johnson, R-La., for their constituents who pay high state and local taxes.
They have threatened to vote against the bill if it clears the Senate without the break intact.
Most Senate Republicans have ignored their threats, and the issue isn't a priority with no Senate Republican representing the blue states that are affected."
Referring to the so-called "SALT caucus" in the House, Sen. Jon Hoeven, R-N.D., told reporters the Senate will come up with the bill they believe is the best deal.
"They're still going to decide whether they agree or not. I think there'll be a lot of pressure because, look, will produce a good product for them to just go ahead. But they get to make that call."
On Tuesday afternoon, Sen. Markwayne Mullin, R-Okla., said he had spoken with nearly all of SALT caucus, and that while they were getting closer to a deal, he speculated that it's unlikely "we're going to get to a place that everybody loves … But we're going to get someplace that may be palatable for people."
He added that once lawmakers reach an agreement on SALT and changes to Medicaid, they will be "good to go."
"All of us have some concerns with the bill," Mullin said. "But that's what happens when you're negotiating the bill in here and you get 535 opinions."
Thune has repeatedly called the president the "closer" when it comes to rallying support for the massive legislation, and by moving ahead with the timetable Trump has set, he believes political pressure will, in the end, force Republicans on both sides of the Capitol to back the package.
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