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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 represent.
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 years.
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 Capitol Hill.
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, as noted in a previous BenefitMall blog, 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 PPACA implementation.
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:
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. For additional information, see this BenefitMall blog.
H.R. 1206: Access to Professional Health Insurance Advisors Act of 2011
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. For additional information, see this BenefitMall blog.
Other bills we have covered in previous BenefitMall blogs include legislation supporting:
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.
Please visit www.BenefitMall.com to view past Legislative Alerts. Or, you may visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources.
The views expressed in this Legislative Alert do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.
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