How to Buy Your Way to Medicaid Cuts

So just how did Mike Johnson get Republicans supposedly skeptical of Medicaid cuts to vote for them anyway. The answer is some good old fashioned greed.

In the end, hard-liners got almost everything they wanted, and moderates folded. As I have previously reported, the reconciliation package is lined with provisions that would do terrific damage to Medicaid. Indeed, Republicans added a slew of last-minute changes making it even worse. For instance, Medicaid work requirements will become effective at the end of next year instead of starting on January 1, 2029, and previous measures targeting marginalized communities—including undocumented immigrants and transgender individuals—have been intensified.

It also includes a separate policy proposal from the House Ways and Means Committee, which focuses on tax policy. That proposal seeks to expand Section 199A, a provision of the federal tax code implemented during the first Trump administration as part of the Tax Cuts and Jobs Act (TCJA) of 2017. The tax section of the GOP mega-bill would raise the percentage of qualifying business income (QBI) filers can deduct from their taxes from 20 percent to 23 percent, widen eligibility for larger deductions, and provide a tax break for investors in business development companies, or BDCs. Section 199A expires at the end of this year, but Republicans are keen to extend it. As the Tax Law Center at New York University points out, extending the pass-through deduction would “make it more generous and more available to higher-income taxpayers.”

Why did the moderates fold? One reason might be their own personal benefit. Among the population of potential beneficiaries to 199A expansion are six House Republicans, all of whom signed the recent letter opposing deep cuts to Medicaid. According to an analysis of annual federal disclosures shared exclusively with the Prospect, six lawmakers—Reps. Rob Bresnahan (R-PA), Rob Wittman (R-VA), Jen Kiggans (R-VA), Young Kim (R-CA), Juan Ciscomani (R-AZ), and Jeff Van Drew (R-NJ)—each reported between $5,000 and $137,000 in income that could benefit from an expansion of the pass-through deduction. Cash in Congress, a research project from the nonpartisan watchdog group Accountable.US, calculated estimates for the amount of income each lawmaker would be able to deduct under Section 199A if the proposal to increase the percentage of qualifying income to 23 percent becomes law. The findings indicate this increase would allow each of the six representatives to deduct more pass-through income from rental properties and certain businesses.

Reps. Bresnahan, Wittman, Kiggans, Kim, Ciscomani, and Van Drew were among the 215 Republicans casting votes in favor of the GOP mega-bill.

“It is the peak of hypocrisy that the loudest and most vocal opponents of Medicaid cuts cowered in a matter of days in favor of a bill that will make the largest cuts to Medicaid in modern history—all to pay for lower taxes for the richest. Even worse, those very members stand to financially gain from those tax cuts, while their own constituents lose their health care,” Tony Carrk, executive director of Accountable.US, told the Prospect.

What is more Republican than this? Nothing, Trump era or before, anytime in my lifetime at least.