Alliance Alert: The Congressional Budget Office (CBO) has confirmed that Medicare will face nearly $491 billion in automatic cuts over the next decade under sequestration rules triggered by President Trump’s so-called “One Big Beautiful” tax law. These cuts — starting at $45 billion in 2026 and growing each year — would devastate access to services for millions of older adults and people with disabilities nationwide.
For our community, this threat to Medicare is inseparable from the parallel Medicaid cuts already looming, which would pull billions from state programs and strip resources from essential community-based mental health and substance use services. At a time when people across New York and the nation are waiting months for housing, peer support, and voluntary recovery programs, these cuts would deepen existing gaps, leaving even more individuals without the services and supports they desperately need.
The Alliance will not stand by as access to services is dismantled. At our upcoming Annual Conference in September, we will hold several workshops on Medicaid, federal policy, and strategies to support people in a tough fiscal environment. Together, we will strategize on how best to protect services and fight back against these dangerous cuts.
Unbreakable! Harnessing Our Power, Building Our Resilience, Inspiring Hope and Courage
Alliance for Rights and Recovery 43rd Annual Conference
Villa Roma Resort and Conference Center | September 29-October 1, 2025
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But we cannot do this alone. It will take action from individuals, the State of New York as well as others, and Congress to stop these cuts from becoming reality. We need to make our voices heard — to ensure that Medicaid and Medicare remain strong and continue to fund the vital services that millions of Americans depend on.
Now is the time to stand united and protect the programs that safeguard health, recovery, and dignity for all.
Medicare Faces $491 Billion Cut Under ‘Big Beautiful Bill’: CBO
By Michael McAuliff | Modern Healthcare | August 18, 2025
Unless Congress acts, Medicare will face $491 billion in automatic cuts over the next 10 years to counter deficit spending in President Donald Trump’s “One Big Beautiful” tax-cut law, according to the Congressional Budget Office.
Deficit projections from the sweeping measure have swelled to $3.4 trillion over the next decade since Congress’ nonpartisan budget analysts warned in May an earlier version of the bill would set up Medicare cuts. The law, which Trump signed in July, is set to trigger sequestration cuts under what is known as the Statutory Pay-as-You-Go Act of 2010, or PAYGO.
The cuts would start at $45 billion in 2026 and rise to $76 billion in 2034, for a total of $491 billion, the CBO estimated in a letter released Friday to ranking Democrats on the House and Senate budget committees, Sen. Jeff Merkley (D-Ore.) and Rep. Brendan Boyle (D-Pa.), as well as Senate Finance Committee ranking Democrat Ron Wyden and Sen. Sheldon Whitehouse (D-R.I.).
Related: How the $1T Medicaid cuts law is also a $500B Medicare cuts law
Under PAYGO, if new legislation adds to the deficit, the White House’s Office of Management and Budget must carry out offsetting sequestration cuts.
Congress exempted Social Security and some programs for low-income Americans from sequestration. But the law set Medicare cuts at 4% —in part to dissuade lawmakers from passing deficit-busting bills.
Congress has passed laws in the past to let themselves off the hook,erasing PAYGO cuts tied to Trump’s Tax Cuts and Jobs Act of 2017 and former President Joe Biden’s American Rescue Plan Act of 2021.
Generally, the minority party has gone along with waiving the rules to avoid cutting Medicare.
Democrats’ intentions this time remain unclear. None of them voted for the GOP tax cut bill that will cause the Medicare cuts, and voters back home roundly criticized Democratic senators in the spring for going along with a GOP spending bill that prevented a government shutdown. Their course may depend onconstituents’ reactions when they become more aware of the pending Medicare cuts.
While House Republicans could pass a waiver on their own, at least seven Democrats would have to assist the GOP in the Senate, where 60 votes would be required, and Republicans hold a 53-47 seat majority.
Republicans, who would have to take the lead on any waivers, did not have a plan for dealing with the sequestration cuts when asked before the recess.
Medicare faces $491B in automatic cuts due to tax law: CBO – Modern Healthcare