Conservative roadmap targets Medicaid, student loans for Trump's 'big, beautiful' sequel

FIRST ON FOX: A conservative think tank that played a key role in shaping President Donald Trump's "one big, beautiful bill" is circulating a new roadmap of recommendations for Republicans' second act.

The Economic Policy Innovation Center, which styles itself as "EPIC For America," has been circulating a new memo with key congressional GOP figures in recent days, a source familiar with the group's plans told Fox News Digital.

The memo, which was obtained by Fox News Digital, advises lawmakers to broadly push for further Medicaid and regulatory reforms, crack down on federal dollars for government pensions and student loans, and use fiscal policy to extend conservative goals on abortion and transgender treatment.

Passing Trump's massive agenda bill despite razor-thin majorities in the House and Senate was a major victory for Republican leaders. EPIC, which hails the bill as a success, argues that continued reforms are needed for meaningful fiscal reform.

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"Unfortunately, even with the victories for the American people in the OBBB, our work is far from done. We must rebuild an economy that truly works for every American, while protecting the nation's financial foundation to ensure lasting resilience," the memo said.

"The federal government is rapidly running out of fiscal space. Maintaining sufficient fiscal space is critical in order to respond appropriately to a crisis. Without space between the fiscal limit and the current level of debt, elected officials will not have room to maneuver in the event of war, a natural disaster, or a recession."

On Medicaid, the memo advises further cuts to the cost-sharing burden on the federal government - known as the Federal Medical Assistance Percentage (FMAP) - for "large, wealthy states" as well as Washington, D.C.

FMAP refers to the rate at which the federal government matches state Medicaid payments, which is currently 50%.

The memo calls to "end the special Medicaid subsidy FMAP treatment" for D.C., whose minimum is 70%.

Republicans' first budget reconciliation bill reduced certain FMAP expansions permitted under the Affordable Care Act (ACA), including for emergency care for states that provide Medicaid coverage to illegal immigrants.

In turn, EPIC advises lawmakers to enhance personal and employer-based healthcare, like Individual Coverage Health Reimbursement Arrangements (ICHRAs) and Health Savings Accounts (HSAs).

Medicaid cuts were one of the largest sticking points during talks for the initial bill and will likely be just as politically fraught for Republicans in the second round. Meanwhile, Democrats have been using those reforms as a political cudgel, accusing the GOP of trying to take healthcare from millions of Americans. 

But conservatives have viewed Medicaid as fraught with waste, fraud, and abuse - insisting their reforms better protect the program for vulnerable people who truly need it.

The memo also advises congressional Republicans to use the budget reconciliation process to "reform federal bureaucrat compensation and retirement" and "eliminate public sector student loan forgiveness," among other goals.

On the social conservative policy front, EPIC appears to view an extension of the ban on taxpayer funds to abortion providers as critical to a second reconciliation bill.

The first bill was viewed as a victory for pro-life advocates in its ban on Medicaid funds for large healthcare providers that perform abortions, which would affect Planned Parenthood and other similar organizations. But that ban is only effective for a year.

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In a section titled "Protect Life and American Values," EPIC urges lawmakers to "extend the prohibition of taxpayer funding for big abortion providers" as well as block Medicaid funds for gender transition care.

It also calls on lawmakers to "invest in election security" and "impose an excise tax on higher education institutions that allow males to participate in women's sports."

EPIC was founded by Paul Winfree, who served as director of budget policy during the first Trump administration.

The group also has close ties to Capitol Hill, which it flexed during talks for Trump's first agenda bill by both recommending policy initiatives and tailoring its advice through the various steps of the budget reconciliation process.

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Budget reconciliation, which can be used three times during a given congressional term, allows the party in power to enact broad fiscal policy changes while sidelining the opposition - in this case, Democrats - by lowering the Senate's threshold for passage from 60 votes to 51.

Brittany Madni, EPIC executive vice president and a former congressional aide, confirmed the memo's veracity to Fox News Digital. She said the group would use the same "playbook" it did during the first reconciliation process.

She said EPIC is looking to offer "an initial suggestion to lawmakers on what to target, and is readying to work with Republicans through the various steps of the process as details change and evolve."

"Mandatory spending reform is an essential target for actual fiscal change in order to stave off a debt spiral. This is why a second reconciliation bill building on the wins in the OBBB is important," Madni said.

Two sources told Fox News Digital that the group's efforts so far have included a staff-level briefing with the Republican Study Committee (RSC), a 189-member-strong House GOP group that serves as its own de facto think tank for the Republican conference.

Many of the aforementioned proposals were discussed at that meeting, Fox News Digital was told, with EPIC being invited to speak as part of the RSC's new initiative to workshop a second reconciliation bill.

House Speaker Mike Johnson, R-La., has already publicly stated his goal of passing further reconciliation bills. But what a second bill would look like is still unclear.