Update: The budget amendment authored by Houston Democrat Garnet Coleman that would have expanded Medicaid to provide health insurance to more than a million uninsured Texans failed to pass on a 68–80 vote. A bill that was languishing in a House committee that also would expand Medicaid had nine Republican coauthors; all but one of them—San Antonio’s Lyle Larson—voted against Coleman’s amendment.

In every Texas Lege session, the House’s budget hearing features some of the most high-strung debate, with the competing interests of various Texans fought out in full public view. In 2003, when Republicans had seized their first Texas House majority since Reconstruction and faced a $10 billion shortfall that had to be closed with spending cuts or higher taxes, debate on the budget lasted days. Democrats asked what Jesus might do if faced with cuts to programs for the neediest, while Republicans portrayed themselves as protecting hardworking Texans from higher taxes. Eventually, the GOP won out and House members killed most of the proposed 486 amendments to the budget before concluding their work just before midnight on the third day of debate.  

On Thursday, the House is set to take up its version of this year’s spending bill, during another revenue shortfall. The legislation the chamber passes, which will allocate around $250 billion in state and federal funds, will move to a House/Senate conference committee that will hammer out a final budget. Because the allocations touch on every aspect of state government, in every session the House spending bill is what lawmakers call a Christmas tree, a piece of legislation to which any policy can be attached, like an ornament, so long as there is money involved. The 2021 bill and its amendments set for floor debate Thursday seem trimmed with one audience in mind: the Republican primary voters of 2022.

The 245 amendments filed in preparation for the debate this year fall, more or less, into three categories: policy, pork, and politics. In the first category, Austin Democrat Vikki Goodwin wants electric-vehicle charging stations installed at the Capitol, while Fort Worth Republican Stephanie Klick, a registered nurse, wants to take $30 million out of Governor Greg Abbott’s economic development funds and spend it on in-patient psychiatric beds and mental health community hospitals in urban areas. In the category of bringing home the bacon, Odessa Republican Brooks Landgraf wants $499,195 to restore funding that had been cut last year at the University of Texas Permian Basin. Houston Republican Dan Huberty is asking for $50 million to dredge the San Jacinto River, a major source of flooding in the Kingwood area during Hurricane Harvey.

Red-meat issues, aimed at stirring the passions of GOP primary voters, are dominating the political category. Several amendments seek to deny state funding for any organization that takes “adverse action” in opposition to “election integrity” bills the Lege is debating, which are widely viewed as attempts to suppress voting, especially among racial minority groups and the urban poor. Another would cut off grants or state advertisements from statewide periodicals or web-based news sites, while a third amendment would block spending at any organization promoting the New York Times’ “1619 Project,” which focuses on the origins and legacy of slavery in America.

While Republican politicians will campaign in the next election on those red-meat amendments, buried among them are two serious proposals that stand to influence the budget, and state politics, far more than others. The first is Houston Democrat Garnet Coleman’s amendment to expand Medicaid coverage in Texas. Republicans have been fighting against expanding the health-care program since 2012, when the federal government offered to pay the majority of the cost of expansion as a carrot to lure states into embracing the Affordable Care Act. Accepting a deal today, when the feds would pay a higher percentage of the cost (90 percent, versus 60 percent nine years ago), would allow Texas to access $16 billion in federal funding to cover health care for the working poor.

Giving new urgency to the debate, President Joe Biden’s Centers for Medicare & Medicaid Services revoked a ten-year waiver President Donald Trump had given Texas for funding uncompensated care at hospitals. The program provides about $11 billion a year in federal funds to Texas medical facilities to cover care for indigent patients who are uninsured. Hospitals in the state will continue to receive federal uncompensated care money through September 2022, but Texas must now renegotiate the program with the federal government. A study by the Episcopal Health Foundation found that Medicaid expansion would reduce the state’s share of uncompensated care for hospitals by enough money to pay for the expansion.

A Medicaid expansion bill authored by Farmers Branch Democrat Julie Johnson has been languishing without a hearing in the House Human Services Committee under GOP leadership. But, as of Wednesday, it has enough cosponsors to indicate that Coleman’s similar amendment on the budget has a high probability of passing during debate. Whether it would then pass Lieutenant Governor Dan Patrick’s Republican-dominated Senate or whether Abbott would abstain from vetoing it are different questions. Patrick has publicly opposed expansion, and in 2015 Abbott called it “wrong for Texas,” arguing that Medicaid was “already broken and bloated.” (Meanwhile, Attorney General Ken Paxton is leading a twenty-state lawsuit asking the U.S. Supreme Court to repeal the Affordable Care Act.)

But now pressure is building on state government to expand the program, not just because it might be good for Texans’ health care toward the end of the pandemic, but also because it would help the economy. Texas 2036, a think tank headed by former Republican gubernatorial candidate Tom Luce of Dallas and Margaret Spellings, the former secretary of education under George W. Bush, is just one of the groups pushing for expansion. On Monday, more than 180 medical professionals, chambers of commerce, and local governments sent the legislative leadership a letter urging expansion.  

The second big-ticket item tucked in among all the red-meat amendments would free up billions of dollars in federal aid for schools and also involves an impasse between Abbott and the federal government. The Abbott administration and education commissioner Mike Morath have said Texas cannot meet a federal requirement to obtain COVID-19 relief funds for public schools and institutions of higher education potentially totaling more than $22.7 billion. Under a current interpretation of the rules, Texas would have to restore at least $1 billion of the $3.5 billion it is cutting from higher education to obtain the federal money. Christy Rome, executive director of the Texas School Coalition, told me school districts need the funds so they can plan for summer school and the fall semester with a special emphasis on providing smaller classes and remedial learning for many students who have fallen behind because of the pandemic.

So far, more than two dozen North Texas chambers of commerce have asked Abbott to do whatever it takes to obtain the federal funds. The governor, in turn, wrote a letter on February 22 asking U.S. Education Secretary Miguel Cardona to waive the higher education spending requirement. But many Democrats and public school officials and supporters are concerned that a waiver would allow Abbott to spend the COVID money, intended for schools, on something else. They say that’s exactly what happened last year when Texas received $1.3 billion in relief funds for the state’s schools. Abbott and Morath sent the money to the schools but at the same time withheld state dollars that otherwise would have gone to them. The diverted dollars were then used to cover shortfalls in other parts of the state budget.

A bipartisan group of House members have an amendment planned for the budget debate Thursday that would forbid any federal COVID-19 relief money from being spent on any state program without a legislative appropriation. If the amendment is adopted and the impasse between Abbott and the federal government is not settled by the end of the legislative session, on May 31, the governor would have to call a special session to allocate the money to schools when it comes in.

The decisions on Medicaid and COVID relief for schools affect a combined $38 billion in federal funding. That’s a big chunk of money this year, as the COVID-19 pandemic has seriously hit the state economy and the tax and fee revenue it produces for the government. While the Lege has always been parsimonious, even when Democrats control it, lawmakers will have to hunt for more spending cuts than usual. The Legislative Budget Board estimates that the House version of the budget will deplete  spending by $18 billion from the appropriations bill lawmakers passed in 2019. The Senate version would cut spending by $14 billion. With all of those cuts pending, the education and Medicaid funds from the federal government should be a bird in the hand for the state’s Republican leaders—if only they are willing to put sound policy ahead of politics.