Weekly Wonk: Cuts, Consequences, & Costs
Bipartisan former agency directors' read on reconciliation
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Cuts, Consequences, & the Costs of Standing Still
Big bills get the headlines. But buried in budget reconciliation are policy decisions that ripple through state budgets, service delivery, and family stability.
This week, we break down what’s shifting and who’s positioned to shape it in final negotiations during this fast-track simple-majority legislative process.
Here’s the big choices under pressure, with major child and family policy implications.
Crunch Time: Who Gets Cut & Who Gets Counted in the One Big Beautiful Bill
By Doug Steiger, Child Welfare Wonk Senior Contributor
The Senate is considering a reconciliation bill that would upend the negotiated balance that the House barely cleared 215-214.
Complex ongoing negotiations with implications for Medicaid and other child and family programs will determine whether Senate Republicans pass a bill that can also pass the House.
Ticking in the background is the debt limit clock; the bill would lift the debt ceiling, which we will breach without action at some point in August. Here’s what to watch.
One Big Beautiful Bill 2.0
The emerging Senate bill has important differences from the House bill. These include: larger Medicaid cuts, in particular through stricter limits on “provider taxes1,” a key funding source for Medicaid programs.
The Senate version also makes more people subject to Medicaid work requirements, in particular parents of children over 14.
These savings align with longstanding GOP goals for structural changes to Medicaid. They also free up funds for bigger tax cuts, and a slower phase-out of clean energy tax credits that split GOP Senators along regional rather than political lines.
The Senate version also applies SNAP work requirements to fewer families.
BUT, the bill drops the exemption to work requirements for young people who have aged out of foster care.
In a bill of this size, changes like this can easily slip through unnoticed.
Provisions– like the exclusion of the House’s SALT2 deduction increase and a slower phase-out of clean energy tax credits are active points of negotiation.
They play along complex regional lines that add further tensions to the pathway to a majority vote. With talks ongoing, the final shape of the bill remains in flux.
What’s still being negotiated
There are 53 Senate Republicans. At least 50 have to vote for the bill.
Finding those votes involves balancing the desire of some conservatives to reduce Medicaid and SNAP spending with the concerns those cuts raise with other Senators.
It also requires finding the right mix of tax provisions, given different priorities among the provisions affecting industries, investors, and families.
Who counts in the Senate and why
With just a few votes to spare, Senate Republicans must reconcile competing priorities—tax cuts, structural safety net reforms, and debt and deficit reduction.
None of this maps neatly; it reflects complex realities back home. These are the players shaping what makes it into the final bill—and what gets cut to get there.
Senate and Committee Leaders
Majority Leader John Thune (R-SD), responsible for lining up the votes for final passage.
Finance Committee Chairman Mike Crapo (R-ID), who oversees the tax and Medicaid provisions.
Agriculture Committee Chairman John Boozman (R-AR), who oversees the SNAP provisions.
Conservative Medicaid Defenders
Senators Josh Hawley (R-MO) and Jim Justice (R-WV), who convey their support for Medicaid in MAGA framing about impacts on working class voters and rural hospitals
Senator Justice has also expressed concern about the impact of SNAP cuts in his state.
Centrist Medicaid Defenders
Senators Lisa Murkowski (R-AK) and Susan Collins (R-ME), concerned about the impact on their states, such as on rural hospital finances.
Deficit & Debt Detractors
Senator Johnson (R-WI), seeking deeper spending cuts than the bill contains.
Senator Paul (R-KY), opposed to the provision increasing the debt ceiling, which is necessary to avoid a separate debt ceiling negotiation with Democrats.
Who counts in the House
Once the Senate passes its version of the bill, the House will be pressured to pass it “as is” so that the President can quickly sign it.
However, there are House Republicans committed to the increased SALT deduction the Senate has dropped.
If they hold firm, they could prevent the Senate version from passing the House.
House conservatives remain committed to substantial Medicaid and SNAP cuts. If Senate negotiations result in smaller cuts, they could insist on changes too.
Yet House moderates could object to the deeper cuts the House conservatives are seeking. At each stage, negotiation is fraught and multi-dimensional.
It’ll probably come down to the President
President Trump’s power over Republicans will likely force a bill through, deciding whose concerns count and whose get cut.
What counts in the clutch
In the short term, the action is in the Senate, particularly with those Senators listed above.
Congressional Republicans are under significant pressure to pass something, which makes broad opposition less impactful.
The messenger matters as much as the message– and what breaks through are constituent-specific consequences. In a message-saturated environment members tune out “vote yes” and “vote no” outreach.
What gets attention is clear, localized impacts, especially when they scale across a district or state. That’s why niche policy like the SALT deduction makes national noise.
It is possible the bill could be voted down, even more than once. Sometimes, the pressure of a failed vote is what forces recalcitrant members to accept difficult compromises.
In the coming days, what rises to Members inboxes will help determine what makes the bill, and what hits the cutting room floor.
Child Welfare Director Perspectives
Our new series, Child Welfare Director Perspectives, invites insights from bipartisan former state child welfare leaders on the biggest ideas shaping the field today.
This new series surfaces how former state child welfare leaders think through high-stakes policy moments.
These aren’t endorsements; they’re strategic intelligence.
We share them because in moments like this, understanding how different leaders actually think is more useful than hearing what other people think they should do.
By looking at leadership across political and geographic contexts, you get to see the kind of thinking that shapes decisions before they’re public.
Different states, different politics, & different mental models- same stakes.
First up: the One Big Beautiful Bill Act — a sweeping proposal with major implications for child welfare systems across the country. How would and could leaders prepare?
Perspective #1: Resisting Scarcity Thinking: A Call for Smarter Policy
By Rebecca Jones Gaston
Former Commissioner, U.S. Administration on Children, Youth and Families
Former Director, Child Welfare, Department of Human Services, Oregon
As a former state child welfare director and federal commissioner, hearing about sizable cuts to Medicaid and state budgets sets off a familiar alarm.
It’s never welcome news—especially when you’re leading system transformation with a focus on well-being and equitable outcomes.
In budget crunches, resist scarcity thinking. Anchor to mission.
Leadership is navigating uncertainty with clarity and purpose, not fear. Resist the reflex to retreat into scarcity thinking and instead sharpen focus on the mission: strengthening families and preventing unnecessary system involvement.
When budget reductions are imminent, the first step is anchoring to a clear, guiding vision. For me, that has always been about keeping children safely with their families.
Start with a clear vision—and hard data.
In tough budget moments, systems tend to revert to muscle memory—leaning more heavily on Title IV-E foster care funding because it feels more predictable.
But removing children from their families is not only a relational loss; it’s expensive and does not necessarily improve safety.
Prevention offers real return on investment, both in human outcomes and fiscal terms.
My first move would be to gather my senior leadership team and dive into the data. We’d need to map out where we’re most vulnerable, but also where we have flexibility.
I’d ask:
What programs are delivering the most impact per dollar?
What services are duplicative or underutilized?
Are there opportunities to braid funding or shift services upstream?
These questions are less about cutting and more about optimizing and protecting what works.
Know your funding systems—or lose leverage.
Equally critical is understanding Medicaid and Temporary Assistance for Needy Families (TANF) not just as funding streams, but as policy levers. State-level decisions around eligibility, coverage, and match rates can dramatically alter what's possible.
As a director, I made it a priority to really know the fiscal landscape myself—not just rely on what others told me. If you can't speak the language of budgets and financing, you're not driving the deliberations.
To cabinet leaders and legislators: prevention isn’t optional—it’s protective.
To cabinet leadership and legislators, I would convey this message: cutting upstream supports guarantees downstream costs.
When families lose access to behavioral health care, substance use treatment, housing supports, or child care, we will see them instead enter our child welfare and juvenile justice systems.
Cutting prevention when budgets are tight doesn’t avoid costs; it delays and shifts them to less effective and efficient approaches. Preserving prevention maintains the flexibility that supports agile systems that deliver safe, stable, thriving families.
Ultimately, under pressure it’s important to lead with purpose and discipline—never forgetting that every dollar cut is felt most acutely by the families we serve.
Rebecca Jones Gaston served as Commissioner of ACYF from 2022 to 2025. She served as Oregon’s child welfare director from 2019 to 2022. She is the Founder and Chief Strategist of RJG Consulting, LLC.
Perspective #2: The Hidden Costs of Implementation: What State Leaders Need to Know
By Tom Rawlings
Former Director, Georgia State Division of Family and Children Services
Starting conversations on cost shifting
In anticipation of budget cuts from the One Big Beautiful Bill Act, state agency leaders should be discussing with legislative and gubernatorial budget staff the need for significant funding increases to cover expected federal reductions—particularly in Medicaid and SNAP.
Prepare for bottlenecks, a short runway
Increased work requirements and more frequent redeterminations will require more staffing and significant increases in payments to the handful of large national contractors who build and maintain state Medicaid and SNAP eligibility systems.
With a likely December 2026 implementation for new requirements, state leaders really don’t have much time.
Contracting for and making significant changes to complex eligibility IT systems requires a long runway.
That includes determining how to track the additional work requirements, how many additional hours will be required to make the changes, and getting those changes implemented in time.
Legislators will be looking more closely at the agency’s per-case administrative costs. Leaders will need to reduce those costs with a workforce already challenged by recruiting and retention issues.
Anticipate multi-system impact
Medicaid changes are also likely to impact child welfare services indirectly.
Nationally, around two-thirds of children whose families become involved with child welfare are on Medicaid.
Medicaid-reimbursable services for parents such as mental health and substance abuse treatment and in-home counseling services keep children out of the foster care system.
While exempting parents of younger children from the work requirements will soften the blow, families most in need of these services are most likely to be headed by the parents likely to go without coverage as a result of the Medicaid work requirements.
State dollars will have to fill the gap.
Tom Rawlings led the Georgia child welfare agency from 2018 to 2021. He served the state of Georgia for over 30 years as an attorney, family court judge, and child rights ombudsman. He is the President and CEO of Child Welfare and Justice
The state and local tax (SALT) deduction is a key issue because it disproportionately applies to states that lean Democratic, but where GOP inroads built the current Congressional majority, like New York