Alaska Sens. Dan Sullivan and Lisa Murkowski joined 48 other Republicans in the U.S. Senate on Tuesday to pass a major budget bill that cuts federal assistance programs in order to partially pay for the extension of large tax cuts, weighted toward the wealthy.
Even with those cuts, the bill is expected to increase the national debt by more than $3.2 trillion over the next 10 years.
The final vote was 51-50, with Vice President JD Vance casting the tiebreaker. Republicans hold 53 seats in the Senate, but three Republicans joined all of the Senate’s Democrats in voting against the bill, requiring Vance’s tiebreaking act.
The U.S. House may vote on the Senate bill as soon as Wednesday. If it approves the bill, it would go to President Donald Trump, who supports it. If the House votes down the Senate proposal, lawmakers would have to craft a compromise between the Senate bill and one passed earlier by the House.
Murkowski had been considered a deciding vote on the Senate version of the bill. By phone, she said an “accumulation of different initiatives” caused her to vote for it.
She wanted to see the continuation of tax cuts, enacted in 2017 during the first term of President Donald Trump.
“I wanted to see those continued. That’s significant,” she said, emphasizing that the cuts affect all income levels.
She cited as an example an extension of the child tax credit, which lowers taxes for families with children, and no taxes on overtime or tips. Both of those items made it into the bill.
“The challenge was — and we saw it on the House side and we saw it here in the Senate — the challenge was, where do you pay for those?” Murkowski said.
Health care bound for cuts, but Alaska could be shielded
For senators, Medicaid cuts were a partial answer.
Roughly 1 in 3 Alaskans receives health care through Medicaid, a federal-state program for people with low incomes, as well as the primary payer for most nursing home residents. The Center on Budget and Policy Priorities, a progressive think tank opposed to the big bill, estimated that 35,000 Alaskans would lose health insurance if the bill becomes law, both from Medicaid and from a scaling-back in tax credits to pay for individual health insurance.
Sullivan said he believes estimates of the cuts’ effect are inaccurate when it comes to Alaska.
For example, one change would effectively lower payments to providers by reducing a tax on providers that is reimbursed by the federal government.
“We are the only state that doesn’t use provider taxes or state directed payments, so the Medicaid programs and federal funds that the state receives are not impacted by the provided tax reforms in this bill, because we don’t do that,” he said.
Murkowski and Sullivan sought more than $6 billion in Alaska-specific Medicaid funding to offset any remaining consequences here, but those provisions were rejected by the Senate’s parliamentarian as violations of the rules, known as Byrd rules after the senator who sponsored them.
“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,” Murkowski said.
Sullivan said he repeatedly tried to get approval for an amendment that would increase the federally paid portion of Alaska’s Medicaid program, but Democratic senators objected to that idea, causing the parliamentarian to review and reject it.
“I had a little bit of a dark night of the soul when that happened,” Sullivan said.
In the end, Alaska will share a $50 billion rural hospital fund. Murkowski said that and other funding in the bill would result in about $300 million per year to the state, partially offsetting the cuts in the bill.
Sullivan suggested the figure may be closer to $200 million.
That money could prevent five Alaska hospitals — in Valdez, Seward, Kodiak, Cordova and Ketchikan — from closing because of the cuts within the bill. All five were among 338 nationwide considered to be at risk if the bill becomes law.
Adult Alaskans who receive Medicaid will be required to work, volunteer or undergo job training for at least 20 hours per week unless they are sick, have children or care for older people.
Sullivan said he supports that requirement and noted that Alaska Natives are exempt, as are people who live in places with high unemployment, have mental health problems or are pregnant.
New limits on food aid for poorer Alaskans
The bill imposes work requirements for the Supplemental Nutrition Assistance Program, better known as food stamps, and it requires states to partially fund the program.
Alaska will be exempted from that state cost share for two years, Murkowski said, and if the state continues to reduce the number of applications flagged for errors — the highest in the country — that pause could be extended.
“I worked my butt off to make sure that Alaskans were not going to be penalized and were not going to be harmed,” she said.
The Center on Budget and Policy Priorities estimated that without the pause, Alaska would have to pay $37 million per year to keep food aid steady.
The federal government already mandates that “able-bodied adults” work in order to receive food aid, and the new bill extends that requirement to people as old as 64, up from the current age-54 limit.
Parents with children under 14 are exempt, as are pregnant people, Alaska Natives and people “medically certified as physically or mentally unfit for employment.”
Other Alaska additions
Parts of the bill add a new tax exemption for Community Development Quota fishing groups and increase a federal tax deduction for whaling captains.
The bill contains more than $7 billion for Coast Guard icebreakers and $300 million to homeport a newly purchased civilian icebreaker commissioned into Coast Guard service. That ship is expected to be based in Juneau.
The bill mandates four new oil and gas lease sales in the Arctic National Wildlife Refuge, and it requires other sales in Cook Inlet and the National Petroleum Reserve in Alaska.
A growing proportion of the North Slope’s oil production is coming from NPR-A, rather than state-owned land near Prudhoe Bay. Two previous ANWR lease sales have drawn little interest from oil and gas companies.
Seventy percent of rental and royalty payments from NPR-A and ANWR lease sales would go to the state government, starting in 2034. That’s up from 50% currently.
An earlier version of the bill had 90% of the revenue going to the state.
Voice of the Arctic Iñupiat, a North Slope nonprofit that supports oil drilling, praised the new leases, while Sovereign Iñupiat for a Living Arctic, which opposes drilling, denounced them, as did various environmental groups.
The final version of the bill eliminated a Republican proposal to tax new solar and wind power plants, and it allows new clean energy facilities to claim federal tax credits as long as they begin construction in the near future.
“We’ve looked at the Alaska-specific projects, and there are a good number of them that would qualify there,” Murkowski said. “It’s not all we wanted. It could have been worse.”
A prior version of the bill would have ended the tax credit incentives immediately.
Sullivan had doubts, too
While Murkowski has been dubbed the deciding vote on the bill, any other Republican senator could have killed the bill, including Sullivan.
Until senators added the energy provisions and the SNAP and Medicaid carveouts for Alaska, Sullivan was undecided about whether he would vote for the bill, said his spokesperson, Amanda Coyne.
When the Senate failed to adopt his proposal to increase the federally funded share of Alaska’s Medicaid program, Sullivan said he was enormously disappointed.
“I’m not sure it was a moment where I was going to say, ‘I’m not going to do this,’ but it was a moment of enormous disappointment. … I feel very passionate about it, and I was close, and it slipped away from me.”
Planned Parenthood medical services cut
A non-Alaska-specific portion of the bill bans Medicaid from paying for any services at Planned Parenthood.
Rebecca Gibron, CEO of Planned Parenthood Great Northwest, Hawaii, Alaska, Indiana, Kentucky, said by email that the provision puts millions of lives at risk across the country.
“Our health centers save Alaska nearly $5 million each year by preventing unplanned pregnancies, catching cancers early, and controlling the spread of STIs (sexually transmitted infections). Stripping that care away, especially now — amid rural hospital closures, a maternal mortality crisis, and a deepening provider shortage — would push an already broken system past the brink,” she said.
Asked about that section, Sullivan said he thinks Alaskans have other options, such as hospitals and community health centers.
Community health center leaders also have expressed concern about the bill’s effect, citing the loss of Medicaid revenue on their ability to maintain services.
Bill heads to U.S. House next
The Senate’s approval of the big budget bill isn’t the last step in the process. The U.S. House will vote as soon as Wednesday on whether or not to adopt the Senate’s proposal.
If the House votes it down, lawmakers would have to negotiate a compromise between the Senate version of the bill and one passed earlier by the House.
Murkowski said she hopes the House votes down the Senate version, allowing further work.
“I had to look on balance, because the people in my state are the ones that I put first,” Murkowski told reporters on Capitol Hill immediately after her vote. “We do not have a perfect bill by any stretch of the imagination. My hope is that the House is going to look at this and recognize that we’re not there yet.”
That remark drew criticism from Rep. Jim McGovern, D-Massachusetts, during a hearing of the House Rules Committee later in the day. That committee met for a procedural vote to advance the Senate bill toward a vote on the House floor.
“My question to her is, if you really believe that, why the hell did you vote for this bill? It doesn’t make any sense. It’s a dereliction of your duty as a United States senator and a representative of the people of Alaska,” said Rep. Jim McGovern, D-Massachusetts. “When was the last time this current House of Representatives has fixed or solved anything?”
A spokesperson for Rep. Nick Begich III, R-Alaska, said the congressman’s office was still reviewing the Senate’s changes and didn’t have immediate comment.
Begich voted in favor of a prior version of the bill despite a campaign pledge to seek reductions to the federal debt.
In a phone interview afterward, he said he doubted the figures provided by the nonpartisan Congressional Budget Office.
A vote in the House could come this week. Trump has been asking lawmakers to vote before they leave for the Fourth of July holiday.
“To my GOP friends in the House: Stay UNITED, have fun, and Vote “YAY.” GOD BLESS YOU ALL!” Trump said on social media after the Senate voted.
• James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. 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.
