Debt ceiling deal takes little away from health programs. It could be much worse.

Policy analysts, Democrats and Republicans alike, were unhappy with the deal: federal health programs dodged a budget bullet in Washington’s showdown over raising the nation’s debt ceiling.

The consensus bill — approved by a bipartisan vote in the House of Representatives Wednesday night and expected to pass the Senate before a June 5 deadline — includes some fixes and caps on health spending for the next two years.

But the deal protects health programs like Medicaid from deep cuts passed by the Republican-led House in April. The bill would freeze the debt ceiling — the federal government’s borrowing limit — until Jan. 1, 2025, after the next presidential election.

The need for Congress to act to eliminate the unprecedented debt deficit and its economic consequences have led House Republicans to extract spending concessions from Democrats. But in the end, the consensus legislation, negotiated mainly by House Speaker Kevin McCarthy and Biden administration officials, would limit health spending to a minimum.

The most conservative Republicans said they were outraged by what they saw as a gift to Democrats. “This is a bad deal,” said Rep. Chip Roy (R-Texas), one of the bill’s staunchest opponents, at a news conference in the Capitol. “No one sent us here to borrow an additional $4 trillion so that we would get nothing at all.”

In addition to the spending caps, the major health-related deal brokered by Democrats is the collapse of nearly $27 billion in funds earmarked for Covid-related programs but not yet used.

Only a fraction of the money coming back from the covid programs is specifically health related. For example, funds from programs that focus on housing and transportation services are being returned to the federal government.

Of the unspent Covid funds, according to the Congressional Budget Office, the biggest single drain is nearly $10 billion from the Public Health and Social Services Emergency Fund. The CDC had to pay back $1.5 billion. But what would be exempted from health-related responses are “priority” efforts, such as funding for research into next-generation Covid vaccines. Long-term covid research; and efforts to improve the drug supply chain.

“The deal appears to have little impact on the health sector,” said Washington-based policy strategy firm Capital Alpha Partners.

That wasn’t the case with House Republicans’ ‘Restrict, Save, Grow Act’, their first proposal to raise the debt ceiling and slow — in some quarters surprisingly — federal spending. That bill reduces the federal deficit by nearly $5 trillion over the next decade, including more than $3 trillion in cuts to domestic discretionary programs, which account for 15 percent of federal spending. About 15 percent of that goes to health programs, including the National Institutes of Health, the Centers for Disease Control and Prevention, and the FDA.

The Republican bill would impose nationwide work requirements on the Medicaid health program, a proposal that has been strongly opposed by Democrats in Congress and the Biden administration.

Democrats have argued that such requirements would not increase jobs, but would instead separate people from health insurance coverage by not completing the required paperwork. That’s happening as states begin cutting packages after the end of the Covid public health emergency, according to a KFF Health News analysis.

The compromise bill, however, would leave the major federal health programs, Medicare and Medicaid, intact — a political victory for Democrats who have prioritized protecting entitlement programs. The agreement does not include any new work requirements for Medicaid.

As it stands, the bill would freeze other health spending for the next fiscal year and allow for a 1% increase next year. Later, it will be up to the House and Senate Administration Committees to determine how exactly to divide the money among the discretionary programs that control their spending levels.

Advocacy groups have argued that even funding would hurt programs that provide essential services to millions of Americans. Sharon Parrott, president of the liberal Center on Budget and Policy Priorities, said the results would still fall short of major national priorities when the real impact of inflation is taken into account.

Less happy are conservatives who hope the debt ceiling fight will give them a chance to take a bigger bite out of federal spending.

“Overall, this deal continues America’s path toward economic destruction and federal control,” Kevin Roberts, president of the conservative Heritage Foundation, said in a statement.