Howdy folks. Congress is barreling toward a “one-big-beautiful” reconciliation bill, so Danny and I go through the good, the bad, and the missing from the House and Senate versions. President Trump swears no one is leaving D.C. until the bill is done by July 4. We just want to know how to plan our tax bills for the year.
The House version voted to keep nearly all of the 2017 Tax Cuts and Jobs Act in place, sprinkled in some spending cuts to Medicaid, and shipped H.R. 1 to the upper chamber. The Senate promptly ripped out every HSA tweak, sweetened the pot with permanent full expensing for business investment, and punted the rest back across the rotunda. Meanwhile the CBO’s dynamic score says the package raises debt more once growth and higher interest rates are both tallied, meaning it doesn’t come close to paying for itself.
What looks good?
Medicaid provider-tax cap: the House’s 6 % limit and the Senate’s tougher 3.5 % version would finally crack down on states’ favorite Medicaid gimmick.
Full expensing: letting firms deduct new equipment upfront is one of the few truly pro-growth ideas.
HSA/ACA fix & direct-primary-care clause in the House version: solves a regulatory glitch so exchange customers with sky-high deductibles can finally open HSAs, and lets everyone use HSA dollars for a DPC membership.
What doesn’t?
“No tax on tips,” “no tax on overtime,” and a grab-bag of new credits look great in press releases but blow holes in the base and lead to marginal-rate cliffs.
We also talk about the “16 million people will lose coverage” estimate going around. Roughly 5 million are able-bodied adults who would rather skip 80 hours a month of job-search or training, another 1½ million are undocumented enrollees that some states currently finance, and the rest fail new eligibility or verification checks. That’s a far cry from mass expulsions of vulnerable patients.
What’s missing?
We discuss a handful of Medicare changes that are omitted but will need to be addressed eventually.
Medicare site-neutral payments.
Medicare Advantage “up-coding” reforms and a bigger bite of Part B & D premiums for high-earners.
Small but important changes to federal-worker pension contributions, SNAP sanity checks, and other small entitlements that quietly add up.
Veto of the Week: Grover Cleveland’s 1886 veto of a special pension boost for Civil War veteran John Taylor, because not every benefit needs an increase. A neat parallel to today’s senior programs that have quietly become very generous.
What’s in the Episode
[02:06] - House vs. Senate: Key Differences in the Bill
[05:59] - Economic Implications of Tax Cuts
[09:56] - Spending Cuts and Medicaid Reforms
[12:48] - Medicaid Provider Tax Cap
[19:30] - How Many People Will Lose Health Insurance?
[24:45] - Discussing HSA Changes - Expand Enrollment
[27:30] - Direct Primary Care and Health Savings Accounts
[31:00] - No Tax on Tips, No Tax on Overtime
[35:07] - Addressing Medicare and Missing Spending Cuts
[42:45] - Non-Medicare Spending Cuts
[45:53] - Veto of the Week: "The rate he was receiving was commensurate with the degree of his disability, a board of surgeons having reported that he was receiving a liberal rating."
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