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February 10, 2025

The House Budget Committee’s Revenue Proposals: What’s on the Table and What’s at Risk

The House Budget Committee recently released a menu of revenue proposals, outlining various tax policy options to fund a reconciliation bill. The key takeaway? Everything is on the table, including well-established tax breaks that could be modified, reduced or eliminated. This means businesses, industries and associations that benefit from these provisions must be proactive in defending their interests.

Key Revenue Proposals to Watch

Health Care Reforms: Reducing Federal Spending

The proposal suggests significant Medicare and Medicaid reforms aimed at cost reduction, including:

Medicare Site Neutrality ($146B in savings) – Equalizing payments across hospital outpatient departments and physician offices.
Eliminating Medicare Bad Debt Coverage ($42B in savings) – Reducing federal reimbursement for unpaid patient costs.
Reforming Graduate Medical Education (GME) Payments ($10B in savings) – Adjusting funding for teaching hospitals.
Other Medicaid Adjustments – Including work requirements and subsidy recalculations that could impact provider reimbursements.

Tax Reforms: Major Changes in Deductions and Credits

One of the most sweeping areas of reform includes the potential rollback of key tax credits and deductions, such as:

Repealing Energy Tax Credits ($796B in savings) – This includes subsidies for clean vehicles, energy-efficient buildings, carbon sequestration and sustainable fuels.
Ending the Home Mortgage Interest Deduction ($1T in savings) – This long-standing tax benefit could be eliminated or capped.
Repealing SALT Deduction ($1T in savings) – State and local tax deductions, currently capped at $10,000, could be completely removed.
Eliminating Business SALT Deductions ($310B in savings) – A direct impact on corporate tax filings.

Corporate and Individual Tax Adjustments

Lowering the Corporate Tax Rate – Options include reducing it to 15% ($522B cost) or 20% ($73B cost).
Eliminating the Death Tax ($370B cost) – A total repeal of estate taxes on wealth transfers.
Border Adjustment Tax ($1.2T in revenue) – A new tax model that shifts taxation from production to consumption.
Eliminating the Charitable Contribution Deduction for Health Organizations ($83B in savings).

Trade & Tariffs: New Revenue Streams

Trade policy is also a key component of the revenue strategy, with proposals including:

Codifying and Increasing Section 301 Tariffs on China ($100B in savings).
Implementing a 10% Across-the-Board Tariff on Imports ($1.9T in revenue).
Closing the EV Tax Credit Leasing Loophole ($50B in savings).

Energy & Environmental Changes

Energy-related proposals target tax credits and incentives, potentially impacting the clean energy sector:

Repealing IRA's Clean Energy Provisions – Including wind, solar and electric vehicle incentives.
Selling Oil from the Strategic Petroleum Reserve – A strategy to raise revenue as needed.
Expanding Federal Land Sales – Could generate billions in new revenue.

Education & Student Loan Changes

Proposed reforms aim to reduce student loan subsidies and restructure repayment programs, including:

Repealing Biden’s “SAVE” Loan Forgiveness Plan ($127B in savings).
Capping Pell Grants Based on Median College Costs.
Eliminating In-School Student Loan Interest Subsidies.

Welfare & Social Programs: New Restrictions

Mandating Work for Medicaid & SNAP ($100B in savings).
Implementing a Sliding Scale for SSI Benefits ($5B in savings).
Denying SSI for Individuals with Felony Arrest Warrants ($3B in savings).

Federal Workforce & Spending Cuts

Several proposals target federal employment costs, such as:

Increasing Employee Retirement Contributions ($44B in savings).
Shifting Federal Employees to At-Will Employment.
Reducing Federal Employee Benefits.

What This Means for Businesses & Industries

These proposals signal a major shift in federal revenue generation. For businesses, associations and industries that rely on tax incentives or government programs, this is a crucial time for advocacy and engagement. The policies outlined could:

Increase corporate and individual tax burdens.
Reduce or eliminate tax deductions and incentives across multiple sectors.
Reshape healthcare, energy and trade policies in ways that could impact costs and operations.

Final Thoughts

The reconciliation bill’s revenue options present both risks and opportunities for businesses and industries across the United States. The broad scope of these proposals underscores the importance of proactive advocacy. With tax breaks, deductions and federal spending on the line, now is the time to engage, strategize and protect the provisions that matter most.