Federal Budget Reconciliation Threatens Tax-Exempt Bonds and Medicaid
(April 15, 2025) Congress has officially begun the budget reconciliation process, and key programs that support aging services are at risk.
On April 10th, the U.S. House of Representatives passed a budget resolution previously approved by the Senate on April 5th. The House's approval of the resolution was initially delayed due to concerns from fiscally conservative Republicans over its modest spending cut targets. These members reportedly secured assurances from Speaker Johnson and Majority Leader Thune that at least $1.5 trillion in cuts will be pursued through the reconciliation process. The resolution passed by a narrow 216-214 vote and does not require presidential approval.
With Congress now aligned, budget reconciliation can begin. While the resolution includes a May 9th deadline for policy recommendations, this date is non-binding, and negotiations could stretch into the summer, or even the fall.
There is a lot at stake in this federal reconciliation process. Below are two specific areas of potential cuts/changes that are concerning to LeadingAge; however, more information can be found in LeadingAge's serial post about budget reconciliation and on their advocacy resources page here.
- Elimination of Tax-Exempt Municipal Bonds: Congress is considering the elimination of tax exemption for interest earned on municipal bonds as a way to help pay for the cost of the budget package. LeadingAge’s non-profit and mission-driven members across the care continuum rely on tax-exempt bond financing for many purposes, including expanding existing senior living campuses to enhance offerings and serve more residents, modernizing and renovating existing buildings, refinancing of existing debt, and developing new projects, including affordable housing. If you are concerned about the elimination of tax-exempt bonds, please click here to send a message to Congress. It only takes a few clicks!
- Cuts/Changes to Medicaid: The budget resolution approved by Congress last week includes federal spending reductions of up to $1.5 trillion. This level of spending reduction would not be mathematically possible without significant cuts to Medicaid (approximately $500-$880 billion). The methods used to attain this level of spending reduction are yet to be determined, but it is critical that we urge Congress to protect Medicaid and do right by older adults in the budget reconciliation process. Click here to send a message to Congress today!
LeadingAge remains deeply concerned that the federal savings being considered cannot be achieved without harming older adults and those who care for them. Funding reductions and administrative changes in affordable housing, Medicaid, and other resources are already being pursued by agencies.
We strongly encourage NY members to join us in federal advocacy!
- Use the LeadingAge Action Center to contact members of Congress with just a few clicks.
- Schedule in-district meetings during the April 14th-25th congressional recess.
- Refer to LeadingAge issue briefs to inform your conversations.
- Tell Congress exactly how federal cuts or changes would affect your organization and the people you serve. Would loss of funding impact your operations, your staff, your quality of services, etc.? Tell them!
Thank you for your advocacy, and please feel free to reach out with any questions.
Contact: Sarah Daly, sdaly@leadingageny.org