The Senate GOP’s proposed budget resolution for 2025 has drawn sharp criticism for prioritizing tax cuts for corporations and high-income individuals while proposing deep cuts to essential programs.
The resolution paves the way for $2.3 trillion in Medicaid cuts over 10 years through policies like block grants and per capita caps, which would cap federal funding regardless of states’ actual costs. This would force states to slash eligibility, benefits, or provider payments, jeopardizing coverage for 72 million low-income Americans, seniors, and people with disabilities.
The plan also proposes ending the enhanced 90% federal match for Medicaid expansion, which 40 states rely on to cover nearly 20 million adults. Combined with new work requirements and restrictions on state financing tools like provider taxes, these changes would shrink access to care.
Tax Cuts for the Wealthy and Corporations
The budget enables extending Trump’s 2017 Tax Cuts and Jobs Act (TCJA), which disproportionately benefits high earners:
- Making corporate tax cuts permanent (reducing rates from 35% to 21%).
- Eliminating the estate tax, which only affects estates over $14 million, costing $370 billion over a decade.
- Proposing new tariffs (25% on imports from Mexico/Canada) to offset revenue losses, which economists warn could raise consumer prices.
- These cuts are projected to add $4 trillion to the deficit, with Republicans seeking to offset costs through spending reductions in social programs.
Spending Cuts with Wide-Ranging Impacts
- Medicare and Social Security: While Trump has vowed to protect these programs, the House GOP’s proposed $2.5 trillion in unspecified cuts to “mandatory spending” could indirectly pressure them, especially if Medicaid and other safety-net cuts prove insufficient.
- Education and Jobs: States facing Medicaid funding shortfalls may cut K-12 education or other services. The House plan also targets clean energy subsidies and food assistance programs, risking jobs in renewable energy and increasing poverty.
- Debt Ceiling: The resolution links debt limit increases to spending cuts, risking a federal default if demands aren’t met—a tactic reminiscent of the 1995 government shutdown.
Divergence Between House and Senate GOP
The Senate’s $340 billion proposal focuses first on border security and defense, delaying tax cuts, while the House pushes a single $4 trillion package combining tax cuts, border funding, and austerity measures. House conservatives demand $2.5 trillion in spending cuts (double leadership’s initial proposal), creating gridlock. Meanwhile, Senate Budget Chair Lindsey Graham is advancing his plan independently, stating the House’s approach is “too complicated.”
Critics argue the GOP’s strategy mirrors the 2017 TCJA playbook: shifting wealth upward while forcing working families to bear the cost through reduced services and economic instability. With Democrats unified in opposition, the outcome hinges on whether Republicans can resolve internal divides over the scale and timing of cuts.