On Jan. 16, 2025, a 51-page document attributed to the House Budget Committee was released with policy options and associated budgetary impacts for congressional committees to consider as they work through the reconciliation process. While the document provides important insight into what may be included in upcoming budget discussions, it is not yet clear which of the options are being seriously considered by committees.
Several proposals listed in the document are likely to generate significant interest from stakeholders. The highlights include:
Healthcare
- Limit federal health program eligibility on citizenship status (up to $35 billion in 10-years savings)
- Medicaid per capita caps (Up to $900 billion in 10-year savings)
- Reverse regulations that expanded state-directed payments in Medicaid (up to $25 billion in 10-year savings)
- Lower Medicaid matching rate floor (up to $387 billion in 10-year savings)
- Limit Medicaid provider taxes ($175 billion in 10-year savings)
- Equalize FMAP for ACA expansion population (up to $551 billion in 10-year savings)
- Establish Medicaid work requirements ($100 billion in 10-year savings)
- Other reforms to Obamacare subsidies (up to $5 billion in 10-year savings)
- Eliminate Medicare bad debt (up to $42billion in 10-year savings)
- Medicare site neutrality (up to $146 billion in 10-year savings)
- Reform IRA’s drug policies (up to $20 billion in 10-year costs)
- Reform Medicare physician costs (up to $10 billion in 10-year costs)
- Repeal CMS nursing home minimum staffing final rule (up to $22 billion in 10-year savings)
- Ban telehealth and facility fees ($2.3 billion in 10-year savings)
Energy
- Repeal Title I of IRA (excluding 45Q Carbon Sequestration 45U Nuclear Power, 45Z Clean Fuels, and EV Tax Credit) ($404.7 billion in 10-year savings)
- Close the EV credit leasing loophole ($50 billion in 10-year savings)
- Repeal EPA tailpipe emissions rule and CAFE standards ($111.3 billion in 10-year savings)
- Electromagnetic spectrum auction ($70 billion in 10-year savings)
Tax
- Repeal green energy tax credits (up to $796 billion in 10-year savings)
- End Employee Retention Tax Credit (between $70-75 billion in 10-year savings)
- Expand the endowment tax to 14% ($10 billion in 10-year savings)
- Increase applicability of endowment tax ($275 million in 10-year savings)
- Repeal SALT deduction ($1.0 trillion in 10-year savings, relative to TCJA extension)
- Eliminate business SALT deduction ($310 billion in 10-year savings)
- Eliminate the home mortgage interest deduction ($1 trillion in 10-year savings)
- Eliminate nonprofit status for hospitals ($260 billion in 10-year savings)
- Eliminate exclusion of interest on state and local bonds ($250 billion in 10-year savings)
- Eliminate exemption of credit union income ($30 billion in 10-year savings)
- Border adjustment tax ($1.2 trillion in 10-year savings)
- Repeal the corporate alternative minimum tax ($222 billion in 10-year costs)
- Cancel amortization of R&D expenses ($169 billion in 10-year costs)
Trade
- Codify and increase 301 tariffs on China ($100 billion in 10-year savings)
- 10% across-the-board tariff ($1.9 trillion in 10-year savings)
- Require de minimus shipments to pay existing 301 tariffs ($24 billion in 10-year savings)
Agriculture
- Reform 2021 revaluation of the Thrifty Food Plan (up to $274 billion in 10-year savings)
- SNAP work requirements ($5 billion in 10-year savings)
Higher Education
- Repeal President Biden’s SAVE Plan; streamline income-driven repayment plans ($127.3 billion in 10-year savings)
Financial Services
- Eliminate mandatory funding for the Consumer Financial Protection Bureau ($9 billion in 10-year savings)
- Repeal Orderly Liquidation Authority ($3 billion in 10-year savings)
- Eliminate all NFIP subsidies ($11 billion in 10-year savings)
Natural Resources
- Expand offshore oil and natural gas leasing ($4.2 billion in 10-year savings)
- Reopen ANWR and require new lease sales ($45 million in 10-year savings)
- Onshore oil and gas leasing ($500 million in 10-year savings)
- Increase geothermal leasing ($20 million in 10-year savings)
Customs Enforcement and Border
- Extend and increase customs user fees ($25 billion in 10-year savings)
- Add border wall appropriations ($18 billion)
- Hire additional border security personnel ($12.6 billion in 10-year costs)
Transportation and Infrastructure
- Redirect Oil Spill Liability Trust Fund to deficit reduction ($5 billion in 10-year savings)
Many of the proposed changes, particularly those eliminating tax credits, significant cuts in safety net programs or conditioning access to federal benefits like SNAP, are likely to be controversial. With a one-seat majority in the House, and a public commitment from Minority Leader Hakeem Jeffries that Republicans could expect no Democrat votes for the package, Speaker Mike Johnson will face the unique political task of crafting a package with enough votes to pass the House.
