Congress Considers Budget Cuts to Medicaid, Other Social Services

Congress is working to finalize a budget plan for the coming federal fiscal year (FY 2026), which begins October 1. Although the details have not yet been finalized, the plan could include significant cuts in Medicaid, TANF, and other social services.

The House passed its version of the budget resolution (H.Con. Res 14) on February 25. The House plan includes $880 billion in spending cuts over ten years for programs under the jurisdiction of the Energy and Commerce Committee, which includes Medicaid. The Congressional Budget Office estimates that Medicaid is likely to suffer large cuts if the plan is enacted. Such cuts could substantially impact foster and adoptive children and families. 

TANF and the SSBG program are also in jeopardy. Voice for Adoption is among hundreds of organizations that have communicated their support for these programs in a joint letter to congressional leaders.

The Senate is hoping to pass its version of the budget resolution in final form later this week. Conservative members of the House have warned the Senate not to loosen the tight budget caps set on the House side or they will oppose final passage. The House is narrowly divided, with Republicans now holding a slim 220 to 213 majority, once the results of this week’s special elections are accounted for, so the threats from hard-liners could block the legislation.

The budget resolution is the first step for Congress in the annual budget process. It sets overall spending targets for the appropriations committees and other committees that are tasked with developing tax legislation and changes to mandatory (entitlement) programs. Tax and entitlement bills provided for within the resolution (called reconciliation instructions) receive privileged consideration in the Senate, where they are exempt from filibuster. Inclusion in the budget resolution does not guarantee final enactment, however.

In most cases, the budget process is not completed until well after the start of the fiscal year. The budget package for the current fiscal year (FY 2025) was not finalized until March 14, more than 6 months after the fiscal year began.

VFA will report on the details of the final 2026 budget resolution once it has been passed.