Washington Edition
The health care industry thought senators might ease Medicaid cuts. Instead, they made deeper reductions.
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This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, politics and health care reporter Rachel Cohrs Zhang analyzes the ramifications of what President Donald Trump’s One Big Beautiful Bill will do to Medicaid and its recipients. Sign up here and follow us at @bpolitics. Email our editors here.

Capitol Anxieties

A few weeks ago, hospitals, health insurers and health advocacy groups decried the House of Representatives’ plans to approve major cuts to Medicaid spending, while hoping that the Senate would soften the blow. Instead, senators made the reductions to the health insurance program for low-income and disabled people even deeper as they passed their version of President Donald Trump’s giant tax measure today. 

While the Senate, during more than 24 hours of wrangling, shied away from demands by conservatives to vote on a proposal that would have rolled back the Affordable Care Act’s Medicaid expansion, plenty of politically dicey policies remain. 

Republicans are still planning to implement work requirements for people younger than 65 — set to kick in shortly after the midterm elections — as well as more frequent checks of eligibility for some enrollees. The Senate legislation would hamstring states’ ability to finance their insurance programs by taxing health care providers, blowing holes in budgets across the country. The Senate version also would charge more Medicaid beneficiaries for health care services.

Congressional budget analysts expect 11.8 million people would lose insurance over the next 10 years under the Senate bill, and some of them will undoubtedly be Republican voters. 

The US Capitol early this morning. Photographer: Kent Nishimura/Bloomberg

It’s unclear whether House moderates will find senators’ more restrictive positions politically palatable before next year’s elections, given that Trump promised not to cut Medicaid benefits. Senator Thom Tillis, a North Carolina Republican, who announced earlier this week that he’s not running for reelection, said the Medicaid cuts went further than the president’s promise to eradicate fraud and waste. 

“What do I tell 663,000 people in two years or three years, when President Trump breaks his promise by pushing them off of Medicaid because the funding’s not there anymore, guys?” Tillis said on Sunday. 

While Republicans could have achieved savings by changing billing practices used by large insurance companies and large hospital systems, they instead chose to cut spending in Medicaid — a dream scenario for Democratic politicians eager to exploit any political blowback as states rush to implement complicated new policies on an accelerated timeline. — Rachel Cohrs Zhang

Don’t Miss

Trump’s $3.3 trillion tax and spending cut bill passed the Senate today after a fierce campaign by Republican leaders to persuade party holdouts to back the legislation and present him with a political win. It now goes to the House.

The advancement of the bill presages  plenty of risk for the president and congressional Republicans facing reelection next year. Polling has found the legislation is not especially popular with voters, prompting Democrats to see an opening to weaponize it in midterm contests. 

Federal Reserve Chair Jerome Powell, speaking in Portugal at the European Central Bank’s annual forum, repeated that the US central bank probably would have cut rates further this year absent Trump’s expanded use of tariffs. 

US factory activity contracted in June for a fourth consecutive month as orders and employment shrank at a faster pace, extending the malaise in manufacturing.

In an early morning vote, the Senate killed a provision to prevent states from regulating artificial intelligence, a setback for the Silicon Valley executives who championed the measure.

Trump threatened to withdraw government subsidies from Elon Musk’s companies and examine his immigration status after the Tesla Inc. chief escalated his criticism of the president’s tax bill.

Ukraine says its long-range drones struck a  Russian military plant, 808 miles from the border, that manufactures anti-aircraft systems and attack drones.

The top of the Eiffel Tower will be off limits to visitors over the next two days as Europe endures a heat wave powered by a blast of Saharan air that made last month the hottest June on record.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Charlie Dent, a former Republican congressman from Pennsylvania, on the possible consequences of Trump's tax bill as it heads back to the House. 

On the program at 5 p.m., they talk with Representative Jason Smith, chair of House Ways and Means, on whether the differences between Senate and House versions can be resolved.

On the Odd Lots podcast, Bloomberg’s Tracy Alloway and Joe Weisenthal speak with Vlad Tenev, the chief executive officer of Robinhood, about the company’s latest ventures, including tokenized stock trading. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

2026 Warning for the GOP in a Nebraska District
The Cook Political Report has moved Representative Don Bacon’s Nebraska House district from “toss up” to “leans Democratic” after the five-term Republican congressman said he wouldn’t seek re-election. It’s one of the country’s most closely watched swing districts, sometimes called the “blue dot” because Kamala Harris carried its electoral vote in 2024 even as Democrats lost the House race. His retirement adds to the GOP’s vulnerability: Republicans can afford to lose at most two seats in next year’s midterms before Democrats are in position to reclaim the gavel. Bacon’s retirement is also putting a spotlight on his vote for Trump’s “One Big, Beautiful Bill” — he voted for the House version but has said he’s not an automatic yes on final passage after the Senate made changes. — Gregory Korte

What’s Next

Job cut announcements compiled by Challenger, Gray & Christmas will be reported tomorrow.

Factory orders for May will be released Thursday.

The unemployment rate in June will be released Thursday.

Financial markets in the US will close early on July 3 and won’t be open July 4.

The 90-pause for Trump’s reciprocal tariffs on most counties is scheduled to end next Tuesday.

Data on consumer credit in May will be released next Tuesday.

(Programming note: Washington Edition in on a limited schedule week, publishing today and Thursday. We’ll be back full time July 7.)

Seen Elsewhere

  • Support for Israel has declined among young Republicans as Prime Minister Benjamin Netanyahu’s government continues to pursue the war in Gaza, the Washington Post reports. 
  • The House of Windsor, in a show of fiscal responsibility at a time of economic hardship in the UK, has decided to give up the royal train that took its members on official tours  up and down the country and has bedrooms, a dining room and a study, the Wall Street Journal reports.  
  • Heather Gerken, the dean of Yale Law School who has been chosen to lead the Ford Foundation, says she will use her new position to champion democracy and the rule of law, the New York Times reports

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