Republicans are under pressure to make significant cuts to the federal budget to offset the cost of tax reductions they’re determined to enact. These cuts are crucial, as the proposed package includes incentives aimed at rebalancing trade, stimulating economic growth, and fulfilling a core Trump campaign pledge. The outcome may ultimately hinge on Medicaid.

Over at The American Prospect, David Dayen reported on a draft of the GOP budget proposal. Dayen noted that “the most potentially explosive item” is a proposal that would mean “Medicaid recipients making at or above the federal poverty level, which is $15,650 for a single individual and $21,150 for a two-person household, would have to pay some money for coverage—either in premiums, co-payments for hospital visits and other treatment, or other fees.” Dayen, not inaccurately, describes this as “making poor people pay more for health care.”

Trump, you may remember, said in a 19 February interview on Fox News that “Medicare, Medicaid — none of that stuff is going to be touched” as Republicans look to downsize the budget. Inevitably, though, members of the GOP conference keep coming back to it, as it comprises a significant portion of spending. According to the Peter G. Peterson Foundation, Medicaid is the third-largest mandatory programme in the federal budget, accounting for 9% of federal spending in 2022.

Here’s how Politico puts it: “The House Energy and Commerce Committee has been tasked with reducing the deficit by $880 billion, and Republican leaders are eyeing changes to Medicaid to achieve a large portion of that total amount. Many Republicans have argued that the program needs to be streamlined to be more sustainable in the long term and focus on the neediest enrollees.”

But what does that mean? Not long ago, Steve Bannon, Trump’s premier populist warrior, cautioned the Right: “A lot of MAGA is on Medicaid. If you don’t think so, you are dead wrong. You can’t just take a meat axe to it.” Bannon’s criticism sprung from the same well as Trump’s pledge on Fox: MAGA is a working-class movement, and the working-class is defensive of these benefits because many people rely on them.

The GOP’s budget dilemma reveals a deeper ideological and political tension within the party: how to reconcile fiscal conservatism with the populist, working-class base that propelled Trump to power. Slashing Medicaid may satisfy deficit hawks and help fund tax incentives, but it risks alienating a core segment of the Trump coalition — voters who are economically precarious yet fiercely loyal.

As Bannon pointed out, many in the MAGA base rely on Medicaid and view it not as a handout, but as a necessary support in an economy that has often left them behind. The contradiction is stark: Republicans seek to fund policies meant to bolster that very economy by cutting into a program their voters depend on. That makes Medicaid not just a budget line item, but a potential political tripwire. Cutting Medicaid to fund tax breaks, then, isn’t just bad optics — it’s a direct hit to the very voters Republicans claim to champion.

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Emily Jashinsky is UnHerd‘s Washington correspondent.

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