Illustration: Allie Carl / Axios
By increasing the deficit by at least $2.3 trillion, the House reconciliation bill would prompt automatic Medicare cuts under sequestration, according to a CBO analysis prepared for House Budget Committee Ranking Member Brendan Boyle.
Why it matters: Medicare isn't exempt from PAYGO cuts and would sustain a 4% reduction in spending, which translates to almost $500 billion over 10 years unless Congress steps in.
By the numbers: The reduction to Medicare spending under PAYGO is limited to 4%, or an estimated $45 billion for FY26, according to CBO.
- Those Medicare cuts could continue to increase in the succeeding years, to about $75 billion in 2034, and total about $490 billion from 2027 to 2034.
Yes, but: Cuts to Medicare through PAYGO have never been allowed to take effect, because Congress has either excluded those effects from the "scorecard" as part of the underlying legislation or later acted to delay or otherwise mitigate the effects, KFF noted last week.
- That includes during the passage of the Tax Cuts and Jobs Act of 2017 and the American Rescue Plan in 2021, both of which increased the deficit.
- Even if the sequester is waived, the cuts could provide a talking point as the Trump administration looks for ways to cut spending, with discretionary programs being likely targets, said Joe Antos, senior fellow emeritus at the American Enterprise Institute.
The bottom line: Excluding the legislation from PAYGO requirements requires 60 votes in the Senate.
- That could be a tough lift, especially if Democrats aren't inclined to help with the budget math.
