New Year Numbers: 2025, 119th Congress, 2 Reconciliations?

Author: Patti Boozang
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tl;dr 

Happy New Year. I hope you enjoyed time with family and friends ringing in 2025. With just two weeks until the inauguration of President-elect Trump, we provide a short update in this week’s post on what’s happening as the 119^th Congress gets underway related to HHS leadership appointments and the budget reconciliation process, and what it might mean for the Medicaid program.   

The 119^th Congress Gets Underway  

On Friday, January 3, members of the 119th Congress were sworn in, with House Speaker Mike Johnson (R-LA) keeping his speakership. Republicans have the coveted single party “trifecta” controlling the Executive branch and both chambers in Congress but have a very slim majority in the House leaving little room for defection. Last week’s intraparty conflict over Speaker Johnson’s leadership (with two Republicans holding out their support until the last minute) could be a harbinger of a fractured caucus that could have potential impacts on passing a budget reconciliation bill and advancing the Administration's agenda (more on this below).  

Key HHS Leadership Appointments  

As Senate Republicans begin the process of confirming Trump health leadership positions, several key nominees are pending; the list is reflected below. Also pending is an announcement of the person slated to take on the role of Deputy Administrator and Director of Center for Medicaid and CHIP services at the Center for Medicare and Medicaid Services (CMS), the role held by Daniel Tsai in the Biden Administration. Rumors abound as to the “short-list” for the position. Our hope is that the next CMS leader of the Medicaid program will have prior experience as a state Medicaid Director, bringing expertise and operational experience that can only come from the trenches of running a Medicaid program, especially important given the lack of deep Medicaid experience among HHS leadership nominees to date.

 Budget Reconciliation 

As my Manatt colleagues explain in a recent webinar, Budget Reconciliation and Other Tools to Implement Health Policy in the 119th Congress and New Administration, the budget reconciliation process is used to fast-track certain legislation related to budgetary changes because it bypasses the Senate filibuster, requiring only a simple majority for passage. There are a number of complex and somewhat arcane parameters that dictate this process. At the most basic level, Congress passes a budget resolution which includes reconciliation instructions for committees. The Budget Act permits these instructions to only be general in nature -- directing committees to report legislation that achieves the resolution’s fiscal goals, but with no specificity as to policy content. In practice, revenue and direct spending are often combined into a single reconciliation bill—either a tax and spending bill or a spending-only bill. 

There has been much debate about whether Republicans will pursue a single reconciliation bill or take a two-bill approach, with Senate Republicans expressing preference for two reconciliation bills: one on immigration that could presumably be passed quickly given broad consensus on those policies and another later in the year on taxes, Medicaid and other health care issues. The only time that Congress has successfully enacted two reconciliation bills in a single calendar year was in 2006. More recently, however, Congress has passed multiple budget resolutions with reconciliation instructions in a single year and enacted multiple reconciliation bills over the course of a two-year session of Congress. Congress can pass a budget resolution at any point during the fiscal year so long as a budget resolution for that fiscal year has not already passed; the subsequent reconciliation vehicle must be passed before the end of the year of the resolution that originated the instructions. For instance, in 2017, Congress passed budget resolutions for both fiscal years (FYs) 2017 (the fiscal year already underway) and 2018 (the fiscal year slated to begin on October 1, 2017), both of which contained reconciliation instructions. The reconciliation instructions in the FY 2017 budget resolution were used (unsuccessfully) to attempt repeal of the Affordable Care Act; the FY 2018 reconciliation instructions were leveraged to enact the Tax Cuts and Jobs Act (TCJA). Similarly, in 2021, Congress enacted a FY2021 budget resolution with reconciliation instructions shortly after inauguration, setting up passage of the American Rescue Plan Act via budget reconciliation in March of that year. Congress then turned to an FY 2022 budget resolution (also with reconciliation instructions) to set up passage of the Inflation Reduction Act during FY 2022.  

All that said, the reconciliation process is starting in the House, and it would appear that House Republicans are pivoting toward having a single reconciliation bill at President-elect Trump’s behest. The President has indicated a preference for a single bill that includes an extension of the 2017 TCJA tax cuts, debt ceiling, and immigration and border security, among other priorities. We noted in our December 3^rd post Cutting Federal Medicaid Funding: 8 Key Consequences That Everyone Should be Talking About that cuts to federal Medicaid funding that could exceed hundreds of billions of dollars are being discussed as part of reconciliation legislation drafting.  

Speaker Johnson (R-LA) outlined a possible timeline for the reconciliation bill. He’s hoping for the House to pass the bill during the first week of April and have it delivered to the President’s desk by the end of April, but he acknowledged that this timeline could slip into May. 

The Bottom Line 

As the new Administration takes office and legislative activity in Congress picks up pace, we’ll post on new Medicaid leadership appointments, the evolving reconciliation process, emerging Medicaid administrative and legislative changes and what it all means for The 80 Million. Stay tuned and stay in touch.  

Welcome to 2025, 
Patti Boozang and The 80 Million Team