Saturday, October 29, 2011
BUDGET CHALLENGES AND THE SUPER COMMITTEE
Budget Control Act of 2011
As the Presidential primaries continue to heat up, Congressional lawmakers face an
extensive list of legislative priorities requiring attention before the holiday
recess. While many of the pressing issues revolve around the sluggish economy,
health care is still on the radar.
Continuing Budget Challenges and the Super Committee
Due to the failure of Congress to pass a budget for both fiscal year 2011 and 2012,
the federal government has had to operate on a series of continuing budget
resolutions. At the time of this update, the U.S. House of Representatives has
only passed six of the 12 appropriations bills and the U.S. Senate has only
passed one of the 12 appropriations bills necessary to keep the wheels of
government turning. This budgetary impasse is having a negative effect on the
nation’s economy. In order to attempt to bridge this gap, both houses approved
legislation called The Budget Control Act of 2011 (the Act) that created a temporary joint
committee, called the Joint Select Committee on Deficit Reduction, to hammer
out a grand budget compromise.
The legislation authorized the ranking majority member of each house respectively
to appoint six members each to what has come to be called, the “Super
Committee.” The members of the Committee can be found here. As you might expect, the Republican House appointees are not interested in many defense cuts or new taxes, and the
Democrat Senate members of the Committee are generally opposed to any cuts to
the welfare/entitlement programs and are actively seeking new tax revenues.
Each side appears to represent a microcosm of the two houses they
The Act amends the 2012 budget resolution. The House and Senate Appropriations
Committees are tasked with finding an additional $24 billion in cuts to the
existing 2012 continuing budget resolution. In order to attempt to protect the
current fragile economy, the compromise will seek limited reductions in FY 2012
and 2013, and will significantly increase the reductions in the latter
The total federal budget amount that will have to be cut is $1.5 trillion over the
next 10 fiscal years. The Super Committee must vote on an initial
recommendation to cut spending no later than November 23. To see a more
detailed listing of the deficit reduction timelines, click here.
If by January 2, 2012, both houses of Congress have not adopted the Super
Committee’s report to reduce the deficit by at least $1.5 trillion, the Act
implements automatic spending cuts to both defense and non-exempt domestic
programs. If spending levels remain as projected, the anticipated cuts to
defense spending will be around 8.4% and the cut to non-exempt, domestic
programs (other than Medicare) will be around 6.7%.
By the end of this calendar year, the Act also requires that both houses vote on a
Balanced Budget Amendment to the U.S. Constitution.
Members of the Republican leadership have gone on record as saying that the
recommendations of the Super Committee may be the best possible outcome they
will find in 2012. Majority Whip McCarty (R-CA) has already started rounding up
support for the anticipated recommendations. The Democrat side is reserving its
options for now, but has stated that it expects to raise new tax revenues. We
will report further developments to you as this process unfolds.
Beyond Deficit Reduction
While the Super Committee is grabbing all the headlines, it’s important to keep
an eye on the other legislative activities – including Patient Protection and
Affordable Care Act (PPACA).
When the Senate majority isn’t focused on the Super Committee and the impending
impact on the budgets, they are focused on the economy and jobs. The Senate
refused to approve the President’s job proposal and is now moving to address
many of the elements of the job proposal piece-by-piece. Of the 10 issues
highlighted by Senate Majority Leader Reid at the beginning of this legislative
session, jobs and the deficit are consuming most of the oxygen on that side of
The Democrat majority in the Senate is in a tough spot. The Washington Post recently reported:
“House Republicans have the energy. President Obama has the
spotlight. And thus (the Senate has) become the third wheel of democracy — with
a lesser role in Washington’s broader debates, and without the votes to
overcome Republican filibusters in their own chamber.
"In response, Senate Democrats have adopted a minimalist
agenda. They have blocked bills from the GOP-led House but proposed few broad
ideas of their own — hoping to keep vulnerable incumbents from having to make
controversial decisions before the 2012 elections.”
The thin agenda is not sitting well with Obama’s fellow Democratic senators, but
none were offering alternatives.
The House Agenda
On the other side of the Capitol, the Republicans who control
the U.S. House of Representatives are working on an aggressive economic agenda.
The Republican committee chairs and congressional leadership are focused on key
issues involving deficit reduction, health care reform, job creation and
economic recovery. The House has introduced more than one thousand bills since
the 112th session commenced in January. However, due to the gridlock in
Congress, most if not all will not be approved in the Senate.
Earlier this year, a bill to repeal PPACA passed the House
by a substantial margin, but failed to pass the Senate on a party line vote.
Having failed to repeal PPACA, a new effort surfaced in the House to freeze
House Budget Committee Chairman Paul Ryan (R-WI) is calling for Republicans to
support a comprehensive "replacement" of PPACA. He proposes the
federal government provide limited financial contribution to help Americans
obtain health insurance coverage. In a presentation made at the Hoover Institute at Stanford
University, Rep Ryan recently noted: "While Republicans have advanced many
good ideas on health care, it is my candid opinion that the party as a whole
has yet to coalesce around a complete reform agenda aimed at dealing with the
underlying problem, which is runaway inflation in the cost of health care.”
Health Care Legislative Highlights
OpenCongress is reporting and tracking hundreds of bills that
have been introduced directly impacting health care. Here are some
highlights in terms of subject matter:
General health issues - 565 bills
Health care costs and insurance - 267 bills
Health care quality - 71 bills
Health facilities and institutions - 129 bills
Health information and medical records - 144 bills
Health personnel - 171 bills
Health program administrative and funding - 231 bills
Health promotion and preventive care - 149 bills
Health technology, devices and supplies – 69 bills
Insurance industry and regulation – 29 bills
Medicaid - 97 bills
Medical education – 72 bills
Medical ethics – 22 bills
Medical research – 168 bills
Medical tests and diagnostic methods – 100 bills
Medicare – 201 bills
Here are some highlights relating to several specific bills:
The Freeze and Investigate Affordable Care Act
Rep. Sam Johnson has introduced the Freeze and Investigate Affordable Care Act,
H.R. 3095, which would freeze the provisions of the
health reform law that are not yet in effect until its full impact has been
studied. “This law is not what Americans asked for,” said Johnson. “Already,
insurance premiums have skyrocketed, forcing employers to pass on the financial
burden to their employees. Continuing to implement this ill-advised policy is
harmful to the economic recovery of our nation.”
H.R. 1184: Health Care Waiver Transparency Act
Another bill introduced by Rep. Darrell Issa (R-CA) would mandate transparency
in the waiver process. This bill would “require greater transparency concerning
the criteria used to grant waivers to the job-killing health care law and
ensure that applications for such waivers are treated in a fair and consistent
manner, irrespective of the applicant's political contributions or association
with a labor union, a health plan provided for under a collective bargaining
agreement, or another organized labor group.” No further action has been taken
on this bill.
H.R. 1206: Access to Professional Health Insurance Advisors Act of ...
Introduced by Reps. Mike Rogers (R-MI) and John Barrow (D-GA), this bill would
remove insurance broker fees from the calculation of the Medical Loss Ratio
(MLR) formula. The current MLR formula penalizes insurance companies that pay
commissions to brokers. A committee hearing was held on this bill, but no
further action was taken.
This is only a snapshot of the more than 4,200 bills introduced in the 112th Congress. Both
chambers are beginning to focus on the 2012 elections that are now just over
one year away. As Congress moves closer to that November 6, 2012 date, the
opportunity to find compromise on these issues will continue to shrink. The
bipartisan effort earlier this year to successfully repeal the PPACA 1099 clause has proven to be the rare exception. It appears increasingly clear that substantive amendments to PPACA, if any, will
have to await the 2012 election results.