What will the early months of a new Trump term mean for healthcare?
President-elect Donald Trump is scheduled to take office on January 20 after coming back from the political dead. Trump will become just the second president to serve non-consecutive terms. For the politically curious, the first was Grover Cleveland in 1885 and then again in 1893. Cleveland beat Republican James Blaine in 1884, winning both the electoral and popular votes. He lost to Republican Benjamin Harrison in 1888. Harrison won the electoral vote, but Cleveland won the popular vote. Cleveland came back to beat Harrison in 1892, getting both the electoral and popular vote.
A now more government-savvy Trump has come out fast to put together his agenda and personnel for his second term, a major difference than what occurred in 2017 when Trump looked flat-footed during the transition. Trump already has almost all of his nominees picked and ready for Senate confirmation. He has intervened to help save Mike Johnson as Speaker. He has announced priorities and communicated his overall budget desires to GOP leaders in Congress, who now control both chambers.
So, what will Trump’s first 100 days (or so) look like? Let’s break this down into activities.
Confirmations
Trump will fight for confirmation of his nominees. His initial pick for Attorney General, Matt Gaetz, already has dropped out after allegations of sexual impropriety and drug abuse. So far, his other nominees are holding their own. While the president has called for recess appointments, the Senate leaders have wisely pushed back given their commitment to constitutional checks and balances. While the Democrats likely will seek to hold up some confirmations, the Senate GOP will move forward and get these folks confirmed through the usual advice-and-consent process. My take is that virtually all of his high-profile nominees will make it through the confirmation process. The ones that look the most vulnerable, though, are Defense Secretary nominee Pete Hegseth and Director of National Intelligence nominee Tulsi Gabbard.
While Robert F. Kennedy, Jr. holds controversial views on vaccines and in other areas, he, too, is likely to make it as Secretary of Health and Human Services. The GOP senators have largely kept their powder dry on Kennedy. As well, some Democratic senators have signaled support or at least openness on his nomination. His maverick views on food have intrigued lawmakers.
Dr. Mehmet Oz, who is slated to be Administrator of the Centers for Medicare and Medicaid Services (CMS), is somewhat controversial but will make it as well. I think the same is true of other prominent healthcare agency nominees. I am particularly looking forward to seeing Dr. Marty Makary lead the Food and Drug Administration (FDA). Makary will bring clinical and policy expertise to the FDA’s operations. The FDA has become a cesspool over the years. There is a virtual revolving door between the agency and Big Pharma companies. The FDA is not protecting the health of the nation but lining the pockets of brand drug makers. Makary will bring common sense to drug and food regulation and reform the agency.
Funding the government after March 14
Funding for the government runs out as of March 2025 and the GOP leaders of Congress need to find a way to fund federal fiscal year (FFY) 2025 through September 30. The big question is: “Will the GOP be ready to execute on its broader budget reconciliation process in time?” If not, the GOP might be forced to pass another continuing resolution (CR) roughly at existing levels of government spending through the end of FFY 2025. That spending level can then be changed in part via the budget reconciliation process I outline below.
Debt limit
The suspension of the debt ceiling technically ended on January 1, 2025. The government now must use all sorts of extraordinary efforts to not impinge on the debt ceiling and yet still borrow to fund government. During the December crisis over passing a CR through March 14, 2025, a group of conservative Republicans in the House obtained a future commitment from House Speaker Mike Johnson that any movement of the debt ceiling will be tied to major spending cuts ($2 to $2.5 trillion over a spending horizon). Trump wanted a clean two-year extension lifting the debt limit before he took office. But the House conservatives pushed back.
Trump and the conservative lawmakers actually have the same goals, but different approaches. Trump is happy to extend the debt limit and push his spending reduction agenda in different ways. He, too, is worried that no extension complicates his effort to extend his 2017 tax cuts. On the other hand, the conservative lawmakers believe the only way to guarantee spending cuts and control of future debt and deficits is to tie them to the increase in the debt limit.
How long the debt limit hike can wait and how it will be addressed are two key points. Would conservatives bow to Trump and waive the debt limit for several years outside of the reconciliation outlined below? Or would they demand that the debt limit conundrum be solved within a broader reconciliation bill that has major spending cuts?
Budget reconciliation
The Senate filibuster or cloture rule creates major impediments to passage of legislation in the upper chamber unless there is a strong majority on measures. The rule requires at least 60 votes to pass a bill because any one senator could attempt to filibuster a bill and it takes at least 6 votes to end debate. Most have championed the filibuster rule as a good check on excess.
But there is the budget reconciliation process that allows budget-related bills to pass with just a simple majority under Senate rules. This process is often used to pass major budget and other related bills. They must include revenue, spending or debt limit topics. Reconciliation can be used to make changes in mandatory spending, but not Social Security. Reconciliation cannot be used to change discretionary spending or annual appropriations. The inclusions also cannot increase the federal deficit outside of the traditional window (typically ten years). Provisions with no or limited budgetary effect cannot be included. Without getting too far into the weeds, the process has some other limits on what can be passed or included. These are called the Byrd rules. The Senate parliamentarian rules on whether a given issue can be included and the law requires 60 votes to overrule the parliamentarian.
The reconciliation process often lowers overall deficits, but sometimes is used to increase spending. These are generally limited to one per year, but the Congress has yet to act formally on FFY 2025. This opens up the possibility of using reconciliation three times in the next 9 plus months – one tied to FFY 2025 as of now, one for FFY 2026 very soon, and one for FFY 2027 (after October 1, 2025).
This process has been used by both Democrats and Republicans for budgets and policy reforms. Under George H. W. Bush, reconciliation was used to pass a budget in 1990. Under Bill Clinton, a number of budget and tax measures were passed using reconciliation, as was welfare reform. Under George W. Bush, several more budget and tax packages passed under reconciliation. Under Barack Obama, pieces of Obamacare needed a reconciliation bill (although the Affordable Care Act (ACA) proper was not a reconciliation bill). Under Donald Trump 45, his tax cuts passed as a reconciliation measure. Joe Biden was able to get his economic stimulus bill (the American Rescue Plan) passed through reconciliation. And the Inflation Reduction Act (IRA) of 2022 passed as a reconciliation bill as well.
As with previous administrations, Trump is looking to a reconciliation bill to reduce spending and extend his 2017 tax cuts. But with tight GOP vote counts in the House and to some degree in the Senate, crafting a measure or measures will be delicate. First, how many bills will there be? Second, how deep will the spending cuts be?
The current debate is whether one or two reconciliation bills should be passed. Some Republicans, especially in the Senate, support two reconciliation bills. The first would tackle current budget issues, immigration, the border, defense, and some repeals of Democratic policies. The second would encompass the larger tax cut extension and ongoing budget issues. The House is more divided. Some favor a two-bill process, while conservatives in the House Freedom Caucus favor one mega bill. Trump appears to like the one-bill concept as well. Part of the Freedom Caucus members’ views ties to distrust of leadership to keep commitments and deliver on spending reductions.
It is a fair bet that the GOP will get one or more reconciliation bills passed and they will include deep spending cuts. But when this happens and how big these bills will be remain open questions. It is fair to say that one big mega bill would take time and that runs directly into the FFY 2025 shutdown and debt limit timeframes. Further, the bigger a bill on Capitol Hill, the more likely votes will peel off. That doesn’t work wih the current numbers for the GOP.
DOGE – not the Venice palace
Tied to much of the process above is Trump’s proposal for a Department of Government Efficiency (DOGE). It will not be a permanent government agency, but a commission. It will be led by Elon Musk and Vivek Ramaswamy. Some in Congress are suspicious of DOGE and think it could usurp congressional authority. But Republicans are generally supportive of the effort and are looking for ways to tie congressional appropriations decisions with the DOGE process. In some cases, “DOGE committees” will be set up to work collaboratively with the executive branch.
DOGE’s mandate is fairly bold. Trump wants the commission to dismantle bureaucracy, restructure agencies/government, cut wasteful spending, and slash regulations. In essence Trump wants to remake Washington. DOGE wants to hit the ground running and bring huge and expansive lists of cuts to the table. DOGE could rely on proposals from various conservative think tanks, the House Study Committee, the Congressional Budget Office (CBO), congressional advisory panels (such as Medicare advisor MedPAC and Medicaid advisor MACPAC), the president’s proposals, and more.
I see the major problem being that DOGE’s rumored deadline for a report lands in mid-2026 – right before the midterm elections. The GOP will have a hard time passing major changes in an election year. And if you agree on the tax cuts, most spending reductions would be needed well before then.
I will have a blog Thursday on the list of possible healthcare budget cuts.
Regulatory changes
As with most administrations when the party in control changes, Trump will come and immediately freeze or reverse much of what the Biden administration did. Trump can use numerous mechanisms to do so.
- Pending regulations could simply be frozen and never finalized.
- Portions of pending regulations could be purged while other parts are finalized.
- Using the regulatory process to repeal parts or all of given regulations.
There is yet another vehicle that is likely to be used as well since the GOP controls both chambers now. The Congressional Review Act (CRA) provides Congress with fast-track authority to overturn recently issued regulations. While the CRA can be used at any time, the act is most applicable in the “lookback period” following presidential transitions.
The lookback period begins 60 working days before the end of a session of Congress. Regulations issued between that day and the beginning of the subsequent session of Congress are available for review in the new session of Congress. Trump will request the GOP to extinguish certain regulations and Congress can simply expunge them.
Trump thinks he has a great shot to truly rein in agency regulations and such activity, largely due to trends in the courts. At least two major Supreme Court decisions this year restricted the authority of executive agencies to issue regulations. The high court argued the agencies and bureaucracies engaged in huge over-reach. One high court ruling said agencies usurped Congress’ power and struck down the so-called Chevron deference that was precedent of the high court for decades.
Impoundment
On to an ultra-nerdy topic from a former state budget director: One other budget-cutting tool could also come into play. Trump insists that he has the authority to impound funds. He wants to use the interpreted power to restrict certain expenditures and rein in the bureaucracy. Some congressional Republicans are proposing changes to the Impoundment Control Act of 1974 that they say limits the president’s authority to withhold appropriations.
The act was passed in that year specifically to rein in some of Richard Nixon’s impoundment practices. Congress wanted to reassert its right to control appropriation decision-making. What the law does is require a president to submit proposed impoundment lists to Congress for signoff.
The CBO says the 1974 act and process that was established actually allowed impoundment with congressional consent. It says repealing the process will not mean far-ranging authority for the president. Courts seem to have sided with Congress in that Richard Nixon did not have the far-reaching authority to withhold funds.
But Trump could challenge that concept and we could see new litigation. Even more conservative courts are unlikely to side with the president if it comes to that.
#trump #election2024 #2025 #healthcare #congress
— Marc S. Ryan
