U.S. Sen. Lisa Murkowski took questions from Alaska reporters in a 25-minute phone news conference on Tuesday addressing her “Yes” vote for the controversial budget bill – dubbed the “One Big Beautiful Bill” – which the U.S. Senate narrowly passed, 51-50, with Vice President JD Vance casting the tie-breaking vote. It now goes back to the U.S. House of Representatives for consideration and a final vote, in order to become law.
The following transcript of the news conference has been lightly edited to improve readability:
Becky Bohrer, Associated Press: Senator, there was a lot of attention and eyes on you. What was it that ultimately secured your vote on this bill?
Sen. Lisa Murkowski: Well, it was an accumulation of different initiatives that we’ve been working on for a long time. I’ve been really focused on making sure that the most vulnerable in our communities are not made more vulnerable by the provisions in this bill. There’s a lot of good things in the bill, we recognize that. I wanted to get the tax cuts; I wanted to see those continued. That’s significant. There’s some good provisions on the tax side, everything from the child tax credit to some of the things with no tax on overtime, some of those things — the Coast Guard and many of the initiatives.
But the challenge was — and we saw it on the House side, and we saw it here in the Senate — the challenge is where you pay for those. And so the instruction to look to Medicaid was hard for us in Alaska — is hard for us in Alaska (with a) high Medicaid population, and high SNAP (Supplemental Nutrition Assistance Program) population. But a reality (is) that those numbers are increasing, and so how can we make some fair and reasonable reforms. I happen to think that work requirements are not something that we should shy from. But we needed time to make them work, and it doesn’t make sense to have penalties for not complying when you’re doing everything you can do to try to make that happen. So I spent a lot of time in these areas. And we made some, I think, good headway on these. It took a lot of time, and literally, we were in the quote “Byrd bath,” where you argue matters before the parliamentarian through the middle of the night, literally going through these provisions. We had been fighting to get a significant increase in the FMAP (Federal Medical Assistance Percentage). We fought very hard, and the provision that we had written did not comply with the Byrd test, and so we had to go back and rewrite it, not once, not twice, but I think maybe three, maybe it was four times, I don’t know. Anyway, it is important to make sure that the higher cost of living in Alaska is recognized, that the cost of health care delivery is high, and that these drive up our Medicaid costs compared to the national average.
So what we ended up with early this morning, or I don’t remember when it was, some hours ago, was a provision that is not a full FMAP fix, but it is through the Rural Health Transformation Education Program, which we just call the Rural Hospital Program, we were able to “plus up” that program by doubling it. So it is now a $50 billion fund. The state of Alaska, well, all states will receive a base minimum from that fund to help their smaller hospitals. … I’m trying to read this legislative text that is all scribbled and scrawled out, so bear with me as I try to get my numbers right. But what Alaska will receive from that program is quite considerable. That, along with the opportunity for the state to receive direct support through this grant funding program under the same section there, we estimate will yield the state close to $300 million a year for the next five years. This is going to be important to us.
We’ve got a (Supplemental Nutrition Assistance Program) system, an IT system that we know is flawed. In fact, it has failed our state. I think it’s very unfortunate that the state has not chosen to invest in that, I think that there were some decisions made with staffing by the governor that they really kind of knocked us behind, and we’re paying for that now with a very high error rate that’s causing penalties. So what we’re trying to do is not be punitive here, but delay the implementation of the cost share for at least two years, and hopefully beyond two years. To give the state time to get the system underway, it would be a two-year delay with an additional two years — until 2030 — if the state is showing good faith efforts along the way. And so this is a commitment that the state is making.
So that’s going to be important, because we need to get that error rate down. I think everyone wants to do that and is committed to doing that. So those are some of the things on the Medicaid side. And then again, on SNAP, it was important to get some recognition for the high cost of — just high cost of living there in Alaska, and so changing some of the formula in terms of the work requirements so that it recognizes that you have areas of the state that are higher cost, not necessarily lower density. It’s definitely not lower density.
I know I sound rummy, and it’s only because I am super rummy. Haven’t slept in a long, long, long, long, long while now. But the amendment that we were able to secure on that was one that was literally presented to the floor — I don’t know what time it is now. It’s 1 o’clock, like at 11 o’clock this morning, before we went to the final passage. So what I did was I worked my butt off to make sure that Alaskans were not going to be penalized, and we’re not going to be harmed.
This is not a perfect bill by any stretch of the imagination. I am not happy with the process. In fact, I’m really very disappointed in the process. When you’re working on major legislation like this, to be dealing with a product that you’re looking at for the first time in the middle of the night is not right. But I needed to make sure that Alaska’s interests were represented. I think I did, I think I did well by the state, in terms of trying to get these accommodations. We’ve got some flexibility working with the departments that we’ve received both from CMS (the Centers for Medicare and Medicaid Services) and from the secretary of agriculture. But I think quite honestly, we’ve got more work to do. I don’t know whether the House is going to accept this, and I don’t know whether the president is going to continue to demand that it be passed before the Fourth of July. I think that’s a mistake. I think there is more work that can be done jointly between the House and the Senate, and I would welcome that and work that, with every effort that I can make.
Joe Plesha, communications director for Sen. Murkowski: Nobody has slept in the last 48 hours, so you have to give us a little leeway here.
Iris Samuels, Anchorage Daily News: Thank you, Senator, for taking the time to speak with us. I wanted to ask you about your support for the tax cuts that are in the bill. We heard from several groups in Alaska, including the leaders in the Alaska House and Senate, who basically criticized that these tax cuts disproportionately go to favor upper-income people across the country, and in Alaska too. I’m curious, why do you support some of the tax cuts in the bill that go towards wealthier Americans?
Sen. Murkowski: Well, what we did, we didn’t pick and choose. We basically took the 2017 tax rates and continued that. And so what we effectively are able to do is ensure that at the end of the year, when those tax cuts — which were put in place in 2017 — when they expire, people around this country at all levels do not see a huge, massive tax increase. Because that’s what would happen if we had not extended these: They all would have gone back up at all levels. So when you say, ‘Well, we’re only, we’re only thinking about the wealthy here,’Sen. (Susan) Collins (R-Maine) had an amendment to increase the highest tax rate, which is 39.5% or, excuse me, 39.6% to increase that back up to what it was prior to 2017, and direct that money to into the Rural Hospital Fund. So I recognize that the wealthiest of the wealthy — and in Sen. Collins’ amendment, she was going to get after those who earn more than $25 million a year — I think if you’re making more than $25 million a year, you’re probably not that bothered by whether you go from 39 to 41 (percent).
And so one of the things that we did try to do, also recognizing more on the lower end of the economic scale, was to advance no tax on tips. You know, when you’re working in a restaurant, you’re not making big money usually. No tax on overtime, you know, if you’re a seasonal employee, you may be making good money during the fishing season, but beyond that, to be able to have that savings is important. There is a provision for those on Social Security to be able to receive a higher deduction. The child tax credit — which, again, I think is important to families — we increased that.
So, you know, when you look just at the tax rates that are out there, that’s one thing. But it was a much, much broader package. I think much of what was advanced for our small businesses, again, is going to be welcome news in Alaska, for our small business owners and their families. So I think it was important to continue the tax cuts from 2017 to avoid really a significant tax hike to everybody.
James Brooks, Alaska Beacon: Senator, it sounded like you were able to also negotiate some changes with regard to both clean energy and North Slope drilling. What were you able to negotiate in the final bill?
Sen. Murkowski: Yeah, thank you, James. Usually I would have led off with some of the energy provisions, because, you know how I like to focus on that. But we were able to deal with some of the, I think, really harsh treatment that we had seen introduced when it came to the energy tax credits that had initially been passed through the IRA (Inflation Reduction Act). For us in Alaska, this has been quite significant. Whether you’re in a small village and you’re putting in some solar or the effort to advance more more wind, whether it’s up in Kotzebue, I mean, these are significant. And quite honestly, I was very concerned about doing any backsliding on these investments. So this was, again, a measure that I’ve been leading, or co-leading for quite some time. We made some progress. It’s not as much as I would like, on wind and solar. Because we know that even though we’re an oil and gas producing state, you’ve got to take advantage of the resources that you have around you. And if it’s wind, and if it’s solar, and it’s battery, you can make a difference in a diesel-powered community.
So we were able to get — they had planned to terminate … the wind and solar credits right away, and we were able to get that pushed back to commence construction, yeah, it’s basically a one-year safe harbor. So I would have liked if it was (extended) to the end of the calendar year, but we did get that one year of safe harbor. So we’ve looked at the Alaska-specific projects, and there are a good number of them that would qualify there. So again, it’s not all we wanted. It could have been worse.
One of the things that I think we did that was significant, literally, the night before we took this up, an excise tax on wind and solar was inserted, literally air-dropped into the bill. Which I didn’t really appreciate, but that was stripped out completely, so at least we don’t have to deal with that. And then on the Alaska-specific issues, we got within the NPR-A (National Petroleum Reserve in Alaska), the coastal plain (of the Arctic National Wildlife Refuge), and Cook Inlet — it was additional leases in these areas. There was some language regarding terms and conditions for acreage. You know that we had been working on a revenue-sharing proposal for the state. It would have been great to have been able to keep 90-10 (split between state and federal revenue) but parts of it were “Byrd-ed” out. So we ended up with a 70-30. Now that’s a perspective going forward, so it wouldn’t come into play until year nine of this bill. So I don’t know what year that is — 2034, OK. And even though it is prospective, this is on all of the, on all of these areas within NPR-A, coastal plain and Cook Inlet that we will have the 70-30 revenue sharing.
James Brooks, Alaska Beacon: Joe, is it possible that you or someone else on staff could get us the language around the SNAP changes for Alaska and any Medicare changes?
Joe Plesha: You bet.
Sen. Murkowski: James, I think what we need to do, because so much of this literally was laid down publicly for the first time within, I mean, just about six hours ago — so there’s a lot of this that folks just don’t have, much less been walked through. And so I think what we need to do is just put together a list for you. I think that that would be helpful, because Alaskans want to know, and I think that we can make that available for you.
James Brooks: That would be great, I’d appreciate that, because I think there’s a lot of uncertainty. I’ve had state legislators texting me and say, “Hey, can you let us know? Because we need to budget for these changes.”
Sen. Murkowski: Yes, and that has been my concern throughout, and that was why it was so important to get the delay. Because if you are looking at, you know, a $40 million hit, and it’s coming next year, that’s attention-getting. And fortunately for us, there is a two-year delay. And then again, if we are making progress towards reducing that (SNAP) error rate and coming into compliance, we can get a delay until 2030. So that gives planning time. And then with a couple hundred, you know, $300 million practically, coming to the state, granted, in different funds and pots. But that’s what we need to be doing – working with the Legislature and getting the commitment from the governor that you’re going to address this, so that we don’t pay because we continue to have a higher penalty due to the error rate. So we got to get that rate down. But that’s going to require people working at the Division of Public Assistance. It’s going to require work by the state to go out in these communities and be effectively a community navigator to help people understand that.
Now you know these are how you have to account for meeting these work requirements. So the more time we can get to this, the better it is. And the more the state will be able to plan. And my hope is that it’s not just delaying a bad price tag, but that we will be able to really get our numbers down, and so we’re not paying for the penalties. We are working to make sure that eligible Alaskans are able to qualify for the benefits that they and their family need.
All: Thank you.
• James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. Corinne Smith started reporting in Alaska in 2020, serving as a radio reporter for several local stations across the state including in Petersburg, Haines, Homer and Dillingham. She spent two summers covering the Bristol Bay fishing season. Originally from Oakland, California, she got her start as a reporter, then morning show producer, at KPFA Radio in Berkeley. This article originally appeared online at alaskabeacon.com. Alaska Beacon, an affiliate of States Newsroom, is an independent, nonpartisan news organization focused on connecting Alaskans to their state government.
