New CBO Estimates Intensify Debates in Congress Over Budget Bill
On Wednesday, June 4, the nonpartisan Congressional Budget Office (CBO) released new estimates of the impact of the 2026 budget bill passed by the U.S. House of Representatives passed in the early-morning hours of Thursday, May 22, and the office’s new estimates are further intensifying the partisan-political debate in Congress, as the U.S. Senate takes up the bill and senators consider what changes, if any, to make to the bill.
Today, the CBO found that the House bill in its current form, if passed in that form through the Senate, would increase by 10.9 million the number of people without insurance by 2034. It would also “lower gross benchmark premiums, on average, in marketplace plans established by the Affordable Care Act by an estimated 12.2 percent in 2034.”
The bill would also add $2.4 trillion to the national deficit over the next decade, the CBO announced on Wednesday; that very high figure is fueling a debate inside the Senate Republican caucus that is leading to splits in the caucus, with some Republican senators calling for deeper cuts to Medicaid, as well as new cuts to Medicare, in order to try to lower the deficit impact of the House bill.
On Wednesday, The Hill’s Aris Folley and Tobias Burns wrote that “President Trump’s “big, beautiful bill” would add $2.4 trillion to the nation’s deficit over roughly the next decade, a new cost estimate from the Congressional Budget Office (CBO) shows. The agency estimated the proposed tax cuts in the plan — which seek to lock in expiring provisions in Trump signature 2017 tax law, along with a host of other add-ons — would decrease revenues by more than $3.6 trillion over that time frame. Meanwhile, accompanying measures to cut federal spending, including reforms to Medicaid and Supplemental Nutrition Assistance Program, would reduce outlays by $1.2 trillion over the same period, the CBO estimated.”
Folley and Burns reported that “House Republicans have been shooting for a minimum goal of $1.5 trillion for spending cuts to ride alongside the tax component of the plan. Wednesday’s analysis includes more than $174 billion in other deficit additions due to interactive effects of different parts of the legislation that previous estimates hadn’t accounted for. “The estimate comes as Trump and other Republicans have ramped up attacks on the nonpartisan budget scorekeeper, while claiming the proposed tax cuts are costless.” They quoted House Ways and Means Committee Chair Jason Smith (R-Mo.) as stating that “I would love for CBO to put out a report showing how they were off by $1.7 trillion on the 2017 tax cuts,” referring to the tax cuts that are central to the House’s plan, which was passed with only Republican votes, and with all Democrats voting against it on May 22. “But the accounting criticisms haven’t stopped fiscal hawks from raising questions about the cost of the package, while pressing for more aggressive cuts to spending. Some have suggested the scope of the tax portion of the bill could be narrowed in the Senate to reduce the package’s costs,” they noted.
The announcement of the new estimates by the CBO on Wednesday has now triggered further dissent in the Republican ranks in Congress. “Senate Republicans on Wednesday discussed the need to cut out waste, fraud and abuse in Medicare to achieve more deficit reduction in President Trump’s landmark bill to extend the 2017 tax cuts, provide new tax relief, secure the border and boost defense spending,” The Hill’s Alexander Bolton reported late on Wednesday afternoon. The House-passed bill would cut more than $800 billion from Medicaid and the Children’s Health Insurance Program, but some GOP lawmakers argue that other mandatory spending programs, such as Medicare, should also be reviewed for ‘waste’ to further reduce the cost of the bill,” he wrote.
Indeed, Bolton reported, “Sen. Kevin Cramer (R-N.D.) told reporters after the meeting that there is ‘a legitimate debate’ within the Senate Republican Conference about whether bigger cuts can be made to federal Medicaid spending and whether federal Medicare spending needs to be reviewed as well. And he quoted Cramer as saying, after meeting with colleagues to discuss the bill, that “There’s a legitimate debate about, ‘Can we do more with Medicaid? Are we doing too much with Medicaid? How much waste, fraud and abuse is there in Medicare? Why don’t we go after that?’ I think we should. Some people are afraid of the topics. I’m not. In my view, this is our moment as Republicans in control of all three branches, and we ought to be going after more fiscal responsibility.” Further, he quote Cramer as saying that “Some people are making that case, other people are wringing their hands,” referencing the debate in the GOP conference. And Bolton reported that “Senate conservatives led by Sens. Ron Johnson (R-Wis.) and Rand Paul (R-Ky.) say they will vote against the bill because it will add trillions of dollars to the national debt. They are pushing for bigger deficit-reduction measures.”
Meanwhile, also on Wednesday afternoon, USA Today’s Ken Alltucker wrote that “The nonpartisan Congressional Budget Office said about 10.9 million Americans would lose health insurance coverage through 2034 under the bill, including 1.4 million undocumented residents who get coverage through state-funded programs. The legislation that cleared the House would require nondisabled Americans on Medicaid to work at least 80 hours per month or qualify for an exemption, such as being a student or caregiver. The bill also would strip coverage to immigrants who get Medicaid through state-funded programs,” he wrote, adding that “The analysis said the bill would cut federal spending by about $1.3 trillion through 2034. But it would also deliver tax cuts of $3.75 trillion, and the federal deficit would increase nearly $2.4 trillion over the next decade.”
Further, Alltucker wrote, “Health analysts said if the Medicaid changes as well as tweaks to the Affordable Care Act marketplace clear Congress, the effects on health insurance coverage would be significant. The CBO earlier estimated nearly 4 million people would lose health insurance coverage through 2034 if Congress did not extend sweetened COVID-19 pandemic-era tax credits that have made ACA plans more affordable for consumers. Trump's Medicaid overhaul as well as the expiration of the more generous ACA tax credit could jeopardize health insurance coverage for nearly 15 million people, said Kathy Hempstead, a senior policy officer at the Robert Wood Johnson Foundation.” And he quoted her as saying that "We're making a giant U-turn here. Are we really going to be a thriving, productive society if we have a huge share of our population uninsured?" Hempstead noted to him that uninsured individuals might delay care and accrue more medical debt over time, and noted that “hospitals and doctors also will take a financial hit as uncompensated care rises.”
Given all of these elements in the CBO’s analysis, Emily Gee, senior vice president for Inclusive Growth at the Washington, D.C.-based Center for American Progress, released a statement on Wednesday afternoon criticizing the congressional Republicans’ legislation and plans, saying that “Today’s report shows that House Republicans’ historic cuts to Medicaid and the Affordable Care Act, totaling more than $1 trillion, as well as their decision to allow enhanced premium tax credits expire will lead to 16 million people losing health coverage, a substantially higher figure than previously estimated.”
What’s more, Gee stated, “These cuts will squeeze families already struggling with higher prices thanks to Trump’s tariffs. They will put hospitals, especially those in rural communities, at greater risk of closure—making it harder for everyone to access health care when they need it. Worse yet, they will worsen health outcomes, force millions of children to go hungry, and increase the cost of utilities while giving massive tax breaks to billionaires and exploding the debt by at least $2.4 trillion. As the Senate takes up this economically damaging bill, the Senate majority must commit to a deliberative process—including holding public hearings and awaiting a full CBO score—before bringing it to a vote.”
Partisan politics complicating the legislative process
In addition to all the policy elements involved, the partisan politics of the situation are becoming more complex as well. On Wednesday evening, Reuters’ Richard Cowan and David Morgan reported that “Hardline conservative Republicans in the U.S. Senate and billionaire Elon Musk showed no sign of softening opposition to President Donald Trump's tax-cut and spending bill on Wednesday, as they pushed for deeper reductions in government outlays. The nonpartisan Congressional Budget Office on Wednesday estimated the bill -- which would extend Trump's 2017 tax cuts and step up spending for the military and border security -- will add about $2.4 trillion to the $36.2 trillion U.S. debt pile,” they wrote.
Further, Cowan and Morgan reported, “Another nonpartisan forecaster, the Committee for a Responsible Federal Budget said on Wednesday that when taking interest payments into account the bill's cost could rise to $3 trillion over a decade or to $5 trillion if temporary tax cuts were made permanent. Musk, the world's richest person who for several months led the Department of Government Efficiency cost-cutting effort, stepped up his attacks on the measure, joining with Senate Republican deficit hawks who said the version passed by the House of Representatives last month did not sufficiently cut spending.” And they quoted Musk as saying on his social media platform X that "A new spending bill should be drafted that doesn’t massively grow the deficit. America is in the fast lane to debt slavery."
Cown and Morgan noted that, “With Republicans holding a narrow 53-47 Senate majority, just four ‘no’ votes are enough to scupper any bill that Democrats unite in opposing. The measure named the "big, beautiful bill" faces opposition both from deficit hawks and a handful of rural-state Republicans worried about the scale of cuts to the Medicaid health insurance program for low-income Americans.” And they quoted Republican Senator Rick Scott of Florida, who has in the last week emerged as a major proponent of further domestic-spending cuts, as saying that "We're at $2 trillion in deficits. We're not going to get interest rates down or inflation under control if we don't balance the budget."
Brookings analysis: ACA marketplace benefits, Medicaid, would be hit very hard
Per all this, the Brookings Institution on Wednesday released a new analysis of the House bill. Under the headline “New CBO estimates show 2025 reconciliation bill would have impacts similar in magnitude to 2017 ACA repeal bills,” Brookings’ Christen Linke Young wrote that “The House reconciliation bill would modify the ACA’s [Affordable Care Act’s] limits on annual out-of-pocket spending in private insurance plans by changing how that limit is updated over time. For the 2026 plan year, the bill allows health plans一including for people who have insurance through their jobs一to increase deductibles and other cost-sharing by up to $900 per year beyond the limits under the ACA today. While many private plans have limits on annual out-of-pocket spending below the legal maximum, some enrollees would face higher cost-sharing under this provision.”
Linke Young wrote that “The 2025 House-passed bill includes dozens of provisions that would make the ACA’s Marketplaces less effective at providing access to affordable coverage:
Ø New paperwork barriers: A variety of overlapping provisions would require ACA Marketplace enrollees to submit additional paperwork or take other administrative steps to get coverage or financial assistance. Described as an attempt to prevent fraud, these paperwork burdens are nonetheless likely to result in many eligible enrollees becoming uninsured. Examples include changes that would require 2.5 million additional people to submit paperwork proving their income, eliminating passive reenrollment (so that Marketplace coverage will not automatically renew on January 1), and offering consumers fewer and shorter windows to enroll.
Ø Cutting eligibility: Two groups would lose eligibility for coverage or financial assistance in the ACA Marketplaces: lawfully present immigrants under a variety of visa statuses, and people who are trying to resolve paperwork issues. This latter provision is particularly impactful in light of the large increase in administrative burdens generated by the provisions described above.
Ø Higher net costs: The House bill would make a number of changes to the way financial assistance is provided一so that the people who do not lose coverage will have to pay more for it. The bill increases the percent of income enrollees have to pay in premiums, allows plans to cover a smaller share of health care costs, and makes a financing change to certain federal subsidies that would have the effect of increasing premiums. In addition, the bill would allow higher premiums by failing to extend expiring enhancements to ACA financial assistance.
Taken together, CBO projects that these changes are expected to decrease Marketplace enrollment by about one-third. Thus, while the 2025 bill does not call for outright repeal of the ACA Marketplaces, it makes major changes that would markedly weaken the effectiveness of a program that has served nearly 50 million Americans over the last decade,” she wrote.
Meanwhile, Linke Young wrote in her analysis that “The House-passed bill would cut Medicaid in a number of ways, some of which mirror how the bill cuts the ACA Marketplaces:
Ø New paperwork barriers: Millions of Medicaid enrollees would need to navigate new paperwork requirements to enroll or stay enrolled. This includes a requirement to report hours worked; similar past requirements have cut enrollment among those targeted by more than a third, with most of the coverage loss among those who are, in fact, ineligible, and merely having trouble documenting that fact.
Ø Higher net costs: States would be required to charge new cost-sharing for people with incomes just above the poverty line.
Ø Changes interacting with Medicare: Multiple provisions in the Medicaid sections of the bill affect seniors and other Medicare beneficiaries. It would require additional paperwork for people with Medicare seeking to become dually enrolled in Medicaid, which will reduce enrollment by more than 1 million. It also cuts lawfully present immigrants with certain visa statuses from Medicare. Further, it eliminates new safety protections for people in nursing homes.
Ø Financing changes: The House bill would prevent states from using certain types of “provider tax” arrangements in which states raise revenue by placing taxes on Medicaid-participating providers. This is projected to decrease federal spending, but will require states to cut enrollment, reduce benefits, or increase their own spending.
As above, these provisions are not an outright repeal of the ACA’s changes to Medicaid, but they would seriously weaken both the ACA Medicaid expansion and other components of Medicaid and amount to a very large cut to the program,” she wrote.
