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Federal Budget Watch, April 10

Posted April 10, 2017 by Carol Hedges
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binoculars-954021_1280The two-week Easter/Passover recess is upon us and members are leaving town with only one legislative work-week left before the current continuing resolution (CR) expires on April 28. What does this mean for House Republicans budget and health care plans? Let’s get right into this week’s Federal Budget Watch.

Policymakers will either need to negotiate a final FY17 appropriations measure or, as we understand, they may extend the April 28 deadline by another week or so to give them time to negotiate a compromise.

Constructive bipartisan bicameral negotiations are underway that cover both funding levels and policy riders. The ability of negotiators to reach a bipartisan deal depends more on the outcome of the policy riders than it does on funding levels. Based on press reports, it appears the president’s request for extra FY17 money for defense and preliminary funding for the border wall will not be included in this measure.

Along with health care work looming, we expect Congress to spend the next month wrapping up spending bills for the rest of FY17. We understand that President Trump’s complete budget will be released in mid-May and congressional leaders will begin working on a budget resolution for FY18 with reconciliation instructions expected for tax reform. That said, some Republicans are already expressing some skepticism about whether House and Senate Republicans can come to an agreement on an FY18 budget. If they are unable to reach agreement on a conference report, then they will not be able to use reconciliation to advance tax reform/tax cut.

Both House and Senate discussions on tax reform are heating up. A top priority for the administration and Republicans leaders is a proposal advanced by President Trump during his campaign, which is a much lower top rate for “pass-through” business income. We expect this proposal, often mistakenly described as a tax cut for small business, to be considered. Here’s a new fact sheet from the Center on Budget and Policy Priorities, the first in a forthcoming series of short two-pagers on various tax-reform proposals.

Health Care Roller Coaster

After a whirlwind week of negotiations among House Republicans on their proposal to repeal and replace the ACA, it’s clear that Congress will leave town for the Easter/Passover two-week recess period without any further legislative movement on health proposals. Notwithstanding intense pressure from the Trump Administration, House Republican leaders were unable to forge a compromise between the conservative Freedom Caucus and the moderate Republican so-called “Tuesday group.”

Not to say there wasn’t a little excitement: early Thursday morning, the House made plans for an emergency session of the House Rules Committee to consider a proposal to provide $15 billion for a new Federal Invisible Risk Sharing Program to help insurers with the high-cost patients who have certain health conditions.

This blog from Edwin Park explains why this proposal would have a very modest impact. Moreover, this proposal was designed as an amendment to the original American Health Care Act (AHCA) health reconciliation that Republicans leaders were unable to move on the House floor in late March – meaning there is no improvement in Medicaid or the other flawed aspects of the bill that led to strong opposition to the measure.

Bottom line: we are still talking about the same very harmful bill with deep Medicaid cuts.

So, the outlook for action in the House remains uncertain – and yet it’s clear that Republican leaders have not given up trying to secure agreement on a plan that can pass the House floor which underscore the importance of continued work over recess when members are back home.

It’s still possible that a modified health reconciliation bill will be brought to the House floor in May if the Republican caucus can agree to a plan. As long as a core group of House Republicans remain opposed to the plan given its harsh treatment of Medicaid and the significant loss of health care coverage for millions of Americans, there is a strong chance of continued success in blocking this.

As we have noted in the past, if the House Republicans do rally around one plan and manage to pass it, there will be tremendous pressure on the Senate to take up the measure as long as it comports with the Senate’s strict rules for a reconciliation bill.

If the House fails to reach agreement and can’t pass a comprehensive health repeal and replace reconciliation measure, this does NOT mean the health care battles are over. To the contrary. Last week’s news about the health plans pulling out of Iowa have only served to deepen policymakers concerns about “market stability,” and we could see discrete proposals to address this when Congress returns in late April.

Assuming the House doesn’t pass a bill, the dynamic in the Senate appears to be shifting already to focusing to smaller proposals and whether any bipartisan agreement is feasible.  For example, Senators Alexander and Corker are working to build bipartisan support for their bill, S.761 (Health Care Options Act of 2017), which would allow people in areas without a plan in the marketplace to use premium tax credits for plans outside the marketplace even if the plans don’t meet current requirements for coverage. The bill would not help most people now in the marketplace because the premium credits wouldn’t be payable in advance and there wouldn’t be any cost-sharing subsidies.

There is very little question that the House and Senate will take up at some point other legislation that revises the Affordable Care Act, or will attempt to change the ACA – and possibly Medicaid – on other health measures.

The Senate will consider bipartisan legislation to extend FDA’s user fees this spring, and we are hopeful that ACA-related amendments to the bill will be soundly rejected. Later this year, the House and Senate must act to extend CHIP funding as well as some expiring health provisions. Hence the need for continued strong efforts to protect and preserve the ACA and Medicaid back in members’ home districts.

Contact info for Colorado congressional delegation:

Sen. Cory Gardner – 303-391-5777 Email here.
Sen. Michael Bennet – 303-455-7600 / 866-455-9866 Email here.
Rep. Diana DeGette (CO District 1) – 303-844-4988 Email here.
Rep. Jared Polis (CO District 2- 303-484-9596 ) Email here.
Rep. Scott Tipton (CO District 3)- 970-241-2499 Email here.
Rep. Ken Buck (CO District 4)- 970-702-2136 Email here.
Rep. Doug Lamborn (CO District 5)- 719-520-0055 Email here.
Rep. Mike Coffman (CO District 6)- 720-748-7514 Email here.
Rep. Ed Perlmutter (CO District 7) – 303-274-7944 Email here.

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