Today, the House voted overwhelmingly to provide $36.5 billion in disaster relief for victims of recent hurricanes and wildfires, as well as emergency credit to help Puerto Rico keep its government functioning. The spending bill, known as a supplemental appropriations measure, now moves to the Senate for consideration next week.
Category: Pure Politics
More Disaster Relief; Tax Reform Slowly, Slowly
It’s getting expensive to deal with disaster relief.
Going first, the House is scheduled to vote this week on the second installment of hurricane relief aid. While the Trump administration requested $29.3 billion, lawmakers have been busy trying to add to the total.
Texas lawmakers want an extra $18.7 billion for victims of Hurricane Harvey, which devastated coastal Houston. The Governor of Puerto Rico asked for another $4.6 billion to help the territory deal with the aftermath of Hurricane Maria. Florida lawmakers have asked for an additional $26.9 billion for victims of Hurricane Irma.
If all those requests were honored, the total aid package would balloon to $79.5 billion. Also, House Armed Services Chairman Mac Thornberry (R-TX) has lobbied the White House for extra money for missile defense to combat the threats from North Korea.
Disaster aid is considered emergency funding that is exempt from discretionary spending limits imposed by the Sequester. However, with the ultimate damage assessment from three recent hurricanes projected to reach a few hundred billion dollars, some conservatives are beginning push to pay for long-term rebuilding costs by cutting other programs, which is a nonstarter with Democrats.
This second installment does not even consider how the US is approaching federal disaster preparedness and recover. For example, the Administration’s request includes $16 billion to cancel debt owed by the National Flood Insurance Program, which has faced mountains of red ink since Hurricane Katrina in 2005. The FEMA-run program literally can not pay claims.
…and Congress and the Administration haven’t started talking about wildfires yet…
Meanwhile, House and Senate leadership are slowly trying to fill in the Administration’s framework for tax overhaul. Generally, lawmakers have said the cost of tax rate cuts would be offset by eliminating most of deductions and credits in the tax code. However, the few ideas floated publicly have run into stiff resistance.
The idea to include a border-adjustment tax, that would have raised $1.2 trillion over 10 years, has been dropped after business lobbies complained that it would raise prices for consumers. Also, the idea to eliminate the state and local tax deduction has unleashed a huge volume of complaints to tax writers. Plans to completely eliminate the “death tax” have also been sidelined as it becomes more clear that reducing of changing existing taxes will be more politically manageable than outright repealing them.
House Passes AHCA, the ACA Repeal
By a vote of 217-213, the House passed a bill that would repeal parts of the 2010 health care law and change Medicaid from an open-ended entitlement system to one that limits states’ federal funding.
Passage fulfills a core Republican campaign promise of the past seven years. The measure, HR 1628, moves to the Senate, where supporters will face major challenges in passing it.
The legislation would replace the income- and cost-based subsidies for insurance in the health care law with an age-based tax credit beginning in 2020. It would effectively end the law’s expansion of Medicaid in 2020. It would block federal funding for Planned Parenthood for one year.
The bill would result in the loss of medical coverage for 24 million people by 2026, under a March Congressional Budget Office projection that did not take into consideration recent amendments. That analysis has not been updated. The Senate will not take up the measure until a new projection is released.
The bill would repeal taxes in the 2010 law for wealthier people with investment income, medical device manufacturers, health insurers and others. The CBO estimated the bill would reduce deficits by almost $337 billion over 10 years, under the earlier projection in March.
The House modified the original version by adding three amendments. One, by Rep. Tom MacArthur (R-NJ) would let states get waivers so they could exempt insurers from Obamacare minimum benefit rules and a ban on charging sick people higher prices. Another, by Rep. Fred Upton (R-MI) would provide $8 billion over five years to help people with medical conditions whose insurance premiums rose after a state got a waiver. The third, by Reps. Gary Palmer (R-AL) and David Schweikert (R-AZ) would create a $15 billion federal program to help cover the costs of high medical claims.
OMB Director Mulvaney Pushing for Sanctuary City Language in FY2017
OMB Director Mick Mulvaney is pushing House lawmakers to include language in the FY2017 omnibus appropriations bill to restrict federal funding grants for cities that do not enforce federal immigration policies. The goal is to bring the House Freedom Caucus on board with a government funding bill.
Such a provision, known as a rider, would put the already delicate negotiations under further strain, as Congressional Republicans already struggle to deal with the Administration’s supplemental request to begin building a border wall. A rider prohibiting federal funds from going to sanctuary cities would guarantee zero Democratic support.
Despite recent changes to the Senate rules regarding confirming Supreme Court Justices, the Senate will need 60 votes to move forward with any appropriations bill and Senate Republicans are only 52 votes.
When Congress returns on April 25th from its two-week recess for Passover and Easter, it will have 4 legislative days to pass some vehicle (an omnibus or another CR) for FY2017 funding or risk a shutdown.
Stay tuned.
House Committees Mark Up ACA Repeal
Mark up for both the House Energy and Commerce (E&C) and House Ways and Means (W&M) committees will happen this morning beginning at 10:30 am. Both committees will consider the bills until they’re done and each committee is expecting around 100 amendments per committee. Highlights of the bill are below .
Big Items:
- It would convert federal Medicaid financing to a per capita cap beginning in FY 2020 based on FY2016 enrollment.
- It would reduce eligibility from 138% to 100% of FPL.
- It repeals all ACA taxes except for the Cadillac tax, which is delayed until 2025.
- It repeals Medicaid DSH cuts for non-expansion states beginning in 2018 and for
expansion states in 2020. Expansion states will not absorb cuts for DSH across all states. Rather,
the cuts will be divided across states, and expansion states will absorb only their share in 2018
and 2019. - It would retain coverage requirements like preexisting conditions, dependents up to age 26, preventative coverage, and prohibition on lifetime and annual limits.
- Tax credits to purchase coverage are reduced.
- It would repeal of the individual mandate (but insurers may charge a 30 percent higher premium for one year for individuals returning to the health care market after having been uninsured.
House and Senate Consideration
The House E&C and W&M mark up is today. After that, both parts will have to go to the House Budget Committee to be “married together” and more changes can be made. House Budget consideration could be as soon as Friday depending on when E&C and W&M finish. House Leadership will likely try to put the bill up for full consideration by next week.
From there, it will go to the Senate. The Senate will attempt to pass this via the Senate Budget Reconciliation process, which means that the Senate will consider this via a straight up or down vote — 60 votes are not needed. However, whatever the House passes, the Senate will change to conform to Reconciliation rules, so presumably McConnell can change the legislation enough to pacify some of these Senators and/or pick up Democrats like Senator Joe Manchin (D-WV), who represents a state where Trump is very popular.
There are restrictions in what the Senate can considered via Budget Reconciliation. Namely, there is a restriction called the Byrd Rule, which means, in overly simplistic terms, provisions considered in a budget bill have to be related to cost or spend money; they cannot legislate. Why is this important? There are items in the House draft, such as Section 103 in the E&C draft (the provision defunds Planned Parenthood) that will be struck from the Senate’s version by virtue of the fact that these provisions legislate.
While officially, the Senate should do as the House and send the bill to the companion Senate committees (HELP, Senate Finance, and Senate Budget), there is a push to have McConnell move this straight to the Senate Budget Committee or Senate Floor. Regardless, this legislation will move quickly in each legislative body.
The goal is to have the whole bill passed and signed before Congress leaves for a two-week Easter Recess on April 7th.
In the mean time, the Congressional Joint Committee on Tax has estimated this will cost $500 B over the next 10 years due to all of the ACA taxes repealed — all ACA taxes are repealed but for the the Cadillac Tax, which is delayed until 2025. There still is no CBO score, which would include an accounting of all revenue lost as well as the number of people losing coverage. A CBO score isn’t expected until after the measure is considered by the House.
Politically
Conservative political groups are blasting the measure already. The Club for Growth, Heritage Action, FreedomWorks, and Americans for Prosperity have all been very critical of the measure and have the ear of conservative Members. Other groups, such as AARP, have also come out against the bill.
The Office of Federal Relations will continue to track the legislation and continue to provide updates.