CBO Confirms Trump Budget Law Will Trigger Over $500 Billion in Automatic Medicare Cuts

A report released on Friday confirmed what many Democratic lawmakers have long been warning about: Republicans' massive budget law will trigger significant cuts to Medicare.

The Congressional Budget Office (CBO) released its analysis of the GOP's budget package and acknowledged that it would be required to issue a sequestration, which is essentially a cancellation of budgetary resources.

The sequestration is required under the rules set out by the Statutory Pay‑As‑You‑Go Act of 2010 that requires spending cuts that are equal to a piece of legislation's negative impact on the budget deficit.

The only way to avoid these cuts, said the CBO, would be for Congress to pass "subsequent legislation that would offset the deficit increase, waive the recordation of the bill's effects on the scorecard, or otherwise mitigate or eliminate the statutory requirements."

The CBO said that these cuts could take as much as $45 billion out of Medicare for fiscal year 2026. What's more, the amount cut from Medicare would increase in every subsequent year, resulting in total cuts of as much as $536 billion between 2026 and 2034.

Rep. Brendan Boyle (D-Penn.), the ranking member of the House Budget Committee, excoriated his Republican colleagues for passing a budget that will result in cuts to Medicare, a program that US President Donald Trump repeatedly pledged not to touch during the 2024 presidential campaign.

"For months now, I have been sounding the alarm on the devastating Medicare cuts caused by Trump's Big Ugly Law," he said. "Republicans knew their tax breaks for billionaires would force over half a trillion dollars in Medicare cuts—and they did it anyway. American families simply cannot afford Donald Trump's attacks on Medicare, Medicaid, and Obamacare."

The Republicans' budget package also took a major ax to Medicaid, as it cut spending on the program by an estimated $1 trillion over the next decade. The CBO has already projected that millions of people will lose coverage.

Medicaid cuts are already having a negative impact. Several states have said that they are slashing rates paid to medical providers, which experts have said could result in several hospitals in these states going bankrupt given that many of them were in bad financial shape even before the GOP's budget law passed last month.