House Committees Advance Key Portions of Republicans’ Reconciliation Package

This week, House Republicans cleared a key procedural hurdle in their effort to advance a sweeping budget reconciliation bill, which seeks to extend expiring tax cuts while increasing investments in border security and defense. After a series of marathon sessions, the House Ways and Means, Energy and Commerce, and Agriculture Committees each narrowly approved their portions of the package along party-line votes – setting the stage for a potential floor vote next week.

In the House Agriculture Committee, lawmakers approved $300 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP/CalFresh), surpassing their original $230 billion deficit reduction target. The deeper cuts, which would take place over the next decade, are intended to offset the cost of a newly added $60 billion “skinny” farm bill package.

The proposed savings would largely come from a new cost-share structure that ties state contributions to SNAP payment error rates. States with the highest error rates – including California – would be required to cover up to 25 percent of benefit costs (which are currently fully funded by the federal government). In addition, all states would see their share of SNAP administrative costs rise from 50 to 75 percent and be subject to a zero-tolerance threshold for payment errors and associated penalties.

The bulk of the SNAP savings, however, would stem from stricter eligibility rules, particularly new work and reporting requirements for so-called “able-bodied” adults. Specifically, the proposal would raise the age at which a person no longer has to meet these requirements (from 54 to 64). It also would lower the age at which caring for a child exempts an individual from work requirements (from 18 to 7).

In a positive development for California’s public lands counties, the Agriculture title includes a continuation of the Secure Rural Schools (SRS) program. Under the proposal, SRS would be extended through 2027.

In the Energy and Commerce Committee, lawmakers advanced sweeping changes to Medicaid (Medi-Cal) and the Affordable Care Act (ACA), which, taken together, would generate over $700 billion in savings over the next ten years. According to the Congressional Budget Office, the measure would result in 8.6 million people losing health coverage. For their part, Democrats warn that the impact could be even greater, noting that the legislation fails to extend the ACA’s enhanced premium tax credits, which are set to expire in December. Unless they are renewed, the number of uninsured individuals could climb to 13.7 million over the next ten years.

Key Medicaid provisions include the imposition of work requirements on able-bodied adults starting in 2029, more frequent eligibility redeterminations by states, and the repeal of federal regulations that had previously streamlined access and enrollment. The measure also would prohibit states from implementing or modifying provider taxes – a key financing mechanism for the Medicaid program – and penalize states like California that use state funds to cover undocumented individuals by reducing the federal match for their Medicaid expansion populations from 90 to 80 percent.

Notably, the Ways and Means Committee advanced its portion of the reconciliation package without making cuts to key safety net programs such as the Temporary Assistance for Needy Families (TANF) program or the Social Services Block Grant (SSBG). Instead, the bill identifies savings by repealing key subsidies for electric vehicles and phasing out a range of other clean energy tax incentives.

Additionally, the measure would preserve the tax-exempt status of municipal bonds.

The legislation also would expand the Child Tax Credit from $2,000 to $2,500 per child for four years. However, it would exclude nearly 4.5 million U.S. citizen children living in mixed-status immigrant households. Other measures aimed at boosting the working class – such as a temporary moratorium on taxing tips – are also included, but would sunset after 2029.

One unresolved issue is how to handle the State and Local Tax (SALT) deduction cap. The current draft would raise the cap to $30,000 for most filers earning under $400,000. However, members of the bipartisan SALT Caucus have charged that the change is inadequate. That provision could still be revised later in the legislative process, though any expansion risks pushback from fiscal conservatives.

Looking ahead, House Speaker Mike Johnson (R-LA) must now work to unify his conference as the full measure heads to the Budget Committee for a Friday morning markup, followed by a potential Rules Committee meeting next Monday. While Johnson is aiming for a floor vote next week, divisions within the GOP – particularly between moderates and fiscal hardliners – are already threatening to upend both the timeline and the legislation itself. To secure the votes for passage, House GOP leaders will likely need to make additional revisions. If House Republicans can hold together, the package could reach the Senate as early as late next week. However, once in the upper chamber, the measure is expected to face significant changes, further complicating final passage.