Senate parliamentarian nixes GOP Medicaid tax proposal
June 26 (UPI) -- Senate Parliamentarian Elizabeth MacDonough on Thursday rejected limiting states' use of healthcare provider taxes to obtain more funding for Medicaid services, along with other provisions in the 2026 budget bill.
The proposal would have limited the use of healthcare provider taxes in states that expanded Medicaid coverage and in states that did not increase Medicaid under the provisions of the Affordable Care Act, The Hill reported.
The provision was projected to save the federal government potentially hundreds of billions of dollars in Medicaid costs, which would have required states to either generate more tax dollars or reduce the scope of their respective Medicaid services programs.
MacDonough's ruling against it means the Senate will have to rework its proposed reconciliation bill to fund the federal government for the 2026 fiscal year that starts on Oct. 1.
The Senate parliamentarian also overruled provisions that would stop states from providing Medicaid Children's Health Insurance Program benefits for "illegal immigrants" or gender transitions.
President Donald Trump wants the Senate and House to approve a single bill to fund the federal government while reducing government spending, but MacDonough said the Medicaid-related provision and several others violate Senate rules without saying how.
Trump wants Congress to approve the budget bill by July 4, but the setback makes it less likely that federal lawmakers will meet that deadline.
MacDonough also is reviewing other provisions and might announce other objections to proposals in the budget bill.
Her rulings have caused some Senate Republicans to call for MacDonough's firing.
MacDonough "has been in office since 2012, appointed by [former Senate Majority Leader] Harry Reid," Sen. Roger Marshall, R-Kan., told Fox News.
"It's 2025 during reconciliation, and we need to again fire the Senate parliamentarian," he said.
MacDonough's rulings could eliminate up to $500 billion in reduced federal spending and wipe out a proposed $2 trillion in cost-cutting measures over the next decade, Marshall said.
The Senate parliamentarian is an unelected position with no term limits and is appointed by the Senate majority leader.
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