Senate Republicans Push Budget Forward to Comply with Parliamentarian Rulings and Internal GOP Squabbles
Hundreds of billions of federal dollars are at stake for rural America as Republicans update their budget reconciliation draft. The impact of slashing Medicaid on rural hospitals is front and center.
Republican leaders have spent the week updating their proposed budget reconciliation package, President Donald Trump’s priority “One Big Beautiful Bill Act,” in an attempt to comply with Parliamentarian rulings, pacify various sects within the GOP party, and pass the House of Representatives without the need for further negotiations between the two chambers. The budget draft cuts health care and nutrition assistance programs that benefit poor and working class people while radically increasing the federal debt and deficit in order to cut taxes for billionaires, multimillionaires, and wealthy corporations.
The largest spending cut in the Senate reconciliation proposal is for Medicaid, with the Senate draft cutting the low-income health insurance program by approximately $1-1.6 trillion over the next decade. Health care researchers estimate that between 11-16 million people would lose their health coverage if the bill passes the Senate and House.
A main sticking point for some Republicans is the potential impact of these Medicaid cuts on rural hospitals. Medicaid is a major source of revenue for many rural hospitals that are already struggling financially. Among other provisions, the Senate draft would cut the provider tax that states use to pay a large portion of their required Medicaid 10% cost-share.
“Medicaid is a substantial source of federal funds in rural communities across the country. The proposed changes to Medicaid will result in significant coverage losses, reduce access to care for rural patients, and threaten the viability of rural facilities,” said Alan Morgan, CEO of the National Rural Health Association (NRHA), in a statement releasing their report on budget cut impacts on rural hospitals. “It’s very clear that Medicaid cuts will result in rural hospital closures resulting in loss of access to care for those living in rural America.”
The NRHA report, “Estimated Impact on Medicaid Enrollment and Hospital Expenditures in Rural Communities,” finds that: “on average, rural hospitals are slated to lose 21 cents out of every dollar they receive in Medicaid funding. Total cuts in Medicaid reimbursement for rural hospitals—including both federal and state funds—over the ten-year period covered by the bill would reach almost $70 billion for hospitals in rural areas. The Senate bill’s cuts to rural hospitals are more than 15% greater than the already highly damaging $60 billion in cuts under the House bill.” Manatt Health conducted the study for NRHA.
Some Senate leaders are floating a $15 billion “rural hospital fund” to help win the votes of rural-state Senators concerned about rural hospital closures in their states. Notable holdouts include Senators Thom Tillis (R-NC), Josh Hawley (R-MO), and Lisa Murkowski (R-AK). Susan Collins (R-ME), Jerry Moran (R-KS), and Jim Justice (R-WV) have also “expressed concerns.” Collins is calling for a $100 billion rural fund, saying that the $15 billion figure is not enough. Senate Majority Leader John Thune (R-SD) is currently rejecting the $100 billion Collins counter-offer.
Last week, Democrats organized a “Save Our Hospitals Week of Action” highlighting the impact of proposed Medicaid cuts on local hospitals they represent. Many Democrats focused on rural hospitals, including Representative Bennie Thompson (R-MS, 2nd) who toured Greenwood Leflore Hospital in Itta Bena, Ochsner Watkins Hospital in Quitman, Greenwood and Batesville to meet with local officials.
“I have several hospitals that are in bankruptcy. I have another hospital that’s about to close. I have three counties where there’s no hospital at all,” Thompson, whose district includes the vast rural Mississippi Delta, said during a rural health care tour press conference. “So, what some people in other parts of the country take for granted, here in Mississippi, we struggle.”
Advocacy group Protect Our Care also issued a report on the devastating impacts of proposed Medicaid cuts on rural hospitals, finding that hundreds of rural hospitals could either cut back on services or shut down altogether:
“From 2010 to 2022, over 130 rural hospitals have closed. Since 2020 alone, 36 rural hospitals have closed, and as of 2024, over 700 rural hospitals were found to be at risk of closing in the near future, almost all of which were within non-Medicaid expansion states. In Medicaid expansion states, rural hospitals are 62 percent less likely to close, though Republicans are dead set on ripping expansion away from nearly 14 states and stopping 10 states from ever expanding. A 2025 analysis from the University of North Carolina at Chapel Hill found that over 338 rural hospitals are at particular risk of closure, conversion, or service reduction from substantial health care cuts because the hospitals either take a high relative share of Medicaid patients, or have experienced 3 years of negative total margins, or both. Republican cuts will force these hospitals to gravely cut back on services or close entirely, shutting entire communities off from health care.”
In addition to the ongoing Medicaid negotiations, the Senate updated their reconciliation draft to comply with Parliamentarian rulings. The Senate Agriculture Committee tweaked their SNAP (the Supplemental Nutrition Assistance Program formerly known as food stamps) cuts slightly, making some changes to proposed state-cost-share payments based on error rates. Nearly $300 billion in SNAP cuts would likely remain in place, as would a more than $55-$67 billion increase in government payments to commodity rowcrop farmers.
The Senate Environment and Public Works committee also made some changes, dropping their plan to sell off U.S. Forest Service and Bureau of Land Management public land and mandate drilling in the Arctic, at least for now. Public land selloff architect Senator Mike Lee (R-UT) is already pursuing a scaled back plan that the Parliamentarian might allow.
At this point, Majority Leader Thune is trying to begin procedural votes on the Senate budget reconciliation draft Friday, June 27, 2025. In addition to the Medicaid holdouts in his GOP caucus, Thune is also facing pushback from fiscal hawks in the House and Senate that say the cuts are not deep enough, as well as Republicans opposed to clean energy cuts. The size and scope of the state and local tax (SALT) deductions are also an important factor for many Republicans, especially GOP House members whose districts are in Democratic states like New York and California. Blue state Republicans want to raise the SALT deduction from $10,000 to $40,000.
Republican Senate leaders are aiming to pass their budget reconciliation package by the Fourth of July holiday. Numerous amendments will likely change the bill on the Senate floor. Senators hope their final bill will be able to pass the House without changes in order to avoid a lengthy and contentious conference committee between negotiators from both chambers.
All Democrats are expected to vote against the budget bill, as is Senator Rand Paul (R-KY). If three other Republican Senators vote against the reconciliation bill, President Trump and Republican leaders would have to go back to the drawing board.
The Cocklebur covers rural policy and politics from a progressive point-of-view. Our work focuses on a tangled rural political reality of dishonest debate, economic and racial disparities, corporate power over our democracy, and disinformation peddled by conservative media outlets. We aim to use facts, data, and science to inform our point-of-view. We wear our complicated love/WTF relationship with rural America on our sleeve.
Thank you for this analysis. There are many things in here I can use in my correspondence with congressional folks.