• HOUSE: With the House now in recess for the month of August, House Democrats are working to reconcile differences among the three versions of the "tri-committee" health reform bill passed by the Ways & Means, Education & Labor, and Energy & Commerce Committees.
  
  
  • The Ways & Means Committee passed health reform legislation on July 17.
  
  
  • The Education & Labor Committee passed health reform legislation on July 17.
  
  
  • The Energy & Commerce Committee reported a partial bill on July 31 (by a vote of 31-28), and will resume its health reform mark-up in September to consider 55-60 amendments still pending.
  
  
  • The House Rules Committee will have to meld the three committee bills together, along with any further amendments adopted by the Energy and Commerce Committee.


• SENATE: The Finance Committee "Gang of Six" --Democrats Max Baucus (MT), Kent Conrad (ND), and Jeff Bingaman (NM), and Republicans Chuck Grassley (IA), Mike Enzi (WY), and Olympia Snowe (ME)--are continuing to negotiate during the August recess in an attempt to develop a bipartisan bill by September 15. While Republicans in the group reject a September 15 deadline, Baucus needs to aim for mid-September to leave sufficient time to develop a "budget reconciliation" bill in case the bipartisan effort fails. To achieve success, the negotiators need to develop a plan that will garner 60 votes in the Senate, to overcome an expected filibuster by bill opponents. Democrats have 60 votes in the Senate--when independents Joe Lieberman (CT) and Bernie Sanders (VT) are counted--but Senators Ted Kennedy (MA) and Robert Byrd (WV) may not be able to be present for key votes due to illness.
  
  
  • If the Finance Committe Gang of Six can reach closure on its lengthy negotiations, it will still face major hurdles in passing the bill out of committee and, later on, "merging" its bipartisan plan with the (Kennedy-Dodd) plan passed by the Senate HELP (Health, Education, Labor, and Pensions) Committee on July 15.


• The Reconciliation Fallback : Looming ever-closer is the October 15, 2009 deadline for congressional committees to utilize the budget reconciliation process that would allow them to fast-track a filibuster-proof health care reform bill through Congress. Four scenarios could lead to the use of budget reconciliation: (1) House Democrats are unable to successfully merge the 3 bills reported by Ways & Means, Energy & Commerce, and Education & Labor; (2) The Senate Finance Committee bipartisan "Gang of Six" is unable to reach consensus; a (3) Senate Democrats are unable to merge the product of the Finance Committee Gang of Six and the HELP Committee bill; or (4) House Progressive Caucus Democrats are unable to sign on to a bipartisan bill agreed to in the Senate. If the Reconciliation mechanism is used, health reform will become a Democrats-only bill with leadership struggling to achieve 218 votes in the House and 50 votes in the Senate (similar to the Budget Reconciliation bill of 1993).
  
  
  • In general, the advantages of Reconciliation are its immunity from filibuster and an effective prohibition on deficit spending during the "budget window" and in the "outyears." (The reconciliation instructions require the bill to save money during the budget window; and the "Byrd Rule" strictly prohibits provisions that would cause deficits beyond the budget window.)
  
  
  • The chief disadvantage of Reconciliation is that bill opponents could use the "Byrd Rule" to strip out all "non-budgetary" policy provisions, even if they are aimed at cost savings but lack a definitive budgetary "score."

• Outyear Deficits for House Health Reform Bill? Senate Budget Committee Republican staff have released an estimate for the House Tri-Committee health reform bill projecting $1.2 trillion in additional deficits for the second 10 years (2020-2029). This follows a CBO letter on July 26 stating that "relative to current law, the (House Tri-Committee health reform bill) would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window." (emphasis added) If these estimates are correct, this is a matter of great concern. Projected budget deficits are already posing tremendous risks for the health and stability of the U.S. economy. Congress and the Administration must not make a bad situation worse. Policymakers should carefully examine the CBO and Senate Budget Committee projections. Senate Budget Committee Republican staff projections
  
  


• Keeping the Debate Focused and Fact-Based: As the health reform debate continues, it is vital that the debate remain focused on reducing the unsustainable growth in health care spending and improving cost effective access to health care. These objectives have been muddled in recent days by widespread hyperbole and misinformation. USA Today ran an editorial--worth reading--entitled "Misinformation, mayhem mar debate on health care." The Concord Coalition will do our part to keep the debate sharply focused on bringing health care expenditures under control.

Prior to adjourning for the August recess, eight Senate Democrats, led by Senators Claire McCaskill (D-MO) and Michael Bennet (D-CO), introduced legislation to re-establish a statutory PAYGO requirment.

Similar to the bill that passed the House on July 22, 2009 (HR 2920) the Senate bill would require that legislation creating or expanding mandatory spending (entitlement) programs or reducing revenues must be fully offset with spending cuts or revenue increases.

However, unlike the House bill, the new Senate bill would not exempt four costly items from the PAYGO requirement: (1) extending the middle class tax cuts scheduled to expire in 2010; (2) keeping the AMT from impacting middle class taxpayers; (3) holding the estate tax at its current (2009) rate; and (4) preventing scheduled cuts in Medicare payments to physicians. Senate Budget Chairman Kent Conrad has withheld endorsement of the House bill due to the exemptions.

Every other year, CBO releases a budget options book that includes a broad array of deficit reduction options. For this publication cycle, CBO released the options in two volumes: (1) last December, CBO released a 221-page options book on Health Care Options; and (2) last week, CBO released a 284-page Budget Options "Volume 2" including other (non-health) spending and revenue options.

Following is a sampling of deficit reduction options included in the new volume (presented for informational purposes and not intended to indicate an endorsement):

Note: Unless otherwise noted, all numbers refer to budget savings over fiscal years 2010-19

• Cancel the Army's Future Combat Systems program saving $25 billion
• Scale back the Defense Department's F-35 Joint Strike Fighter program which has a 2010-2034 estimated cost of $254 billion for 2400 planes
• Scale back long-term development of ballistic missile defense systems saving $49 billion
• Delay the NASA lunar missions by 5 years, saving $25 billion
• Eliminate DOE applied research on fossil fuels, saving $9 billion
• Sell a portion of the TVA's Electric Power Assets, saving $16 billion
• Increase fees for permits issued by the Army Corps of Engineers, generating $461 million
• Eliminate subsidies for timber sales, saving $587 million
• Impose new limits on payments for certain agricultural commodities, saving $1.5 billion
• Eliminate the Internat'l Trade Administration's trade promotion activities, saving $3.5 billion
• Limit the federal subsidy for Amtrak, saving $2.1 billion
• Eliminate air service subsidies to remote communities, saving $1.3 billion
• Increase fees to cover a larger portion of aviation security expenditures, generating $19.5 billion
• Prohibit universities from using federal funds to pay for student aid admin. costs, saving $1.9 billion
• Change inflation adjustment formula for federal, military, veterans' pensions, saving $23 billion
• Link initial Social Security benefits to the growth in prices instead of wages, saving $195 billion
• Use an alternative inflation adjustment formula for Social Security benefits, saving $108 billion
• Raise the 33 and 35 percent income tax rates by 1%, generating $99 billion
• Use an alternative measure of inflation to index tax rates, generating $90 billion
• Reduce the maximum mortgage interest deduction from $1.1 million to $500,000, generating $41 billion
• Tax employer-provided disability insurance, generating $226 billion
• Tax employer-provided life insurance, generating $25 billion
• Tax income earned abroad by U.S. citizens, generating $71 billion
• Treat income for investment management services as ordinary (instead of capital gains) income, generating $25 billion
• End current-year expensing of oil, gas and mineral industry costs, generating $45 billion
• Extend the "lifetime" of equipment for purposes of tax depreciation, generating $268 billion
• Tax all income earned by foreign subsidiaries of U.S. companies, generating $65 billion

Currently pending are three major health reform measures at various stages of development:

1. A tri-committee House plan (Ways & Means/Rangel, Energy & Commerce/Waxman, and Education and Labor/Miller).
   • CBO Cost Estimate JCT Revenue Estimate
   • Ways & Means Committee CBO Letter to Ranking Member
   • Education & Labor Committee
   • Energy & Commerce Committee
   
   
2. A Senate HELP Committee Democratic plan (Kennedy-Dodd) was voted out of committee on July 15, 2009. HELP Committee Summary


3. A Senate Finance Committee bipartisan plan (Baucus/Grassley) is under development. Other participants in the "Gang of Six" are Democratic Senators Kent Conrad (who also chairs the Budget Committee) and Jeff Bingaman; and Republican Senators Olympia Snowe and Mike Enzi (who is ranking Republican on the HELP Committee).

Click here for a Concord Coalition side-by-side comparison of the three major plans

REVISED House Subcommittee (302(b) Allocations

Senate Subcommittee (302(b) Allocations

**Click on the dates below for links to bill summaries**

	House			Senate
Bill	Sub.	Comm	Floor	Sub.	Comm	Floor
Agriculture	6/11	6/18	7/9	*	7/7	8/4
CJS	6/4	6/9	6/18	6/24	6/25
Defense	7/16	7/22	7/30
Energy-Water	6/25	7/8	7/17	7/8	7/9	7/29
Financial	6/25	7/7	7/16	7/8	7/9
Homeland	6/8	6/12	6/24	6/17	6/18	7/9
Interior-Env	6/10	6/18	6/26	6/23	6/25
Labor-HHS	7/10	7/17	7/24	7/28	7/30
Legislative	6/9	6/12	6/19	*	6/18	7/6
Mil Con-VA	6/16	6/23	7/10	7/6	7/7
State-For Op	6/17	6/23	7/9	*	7/9
Transp-HUD	7/13	7/17	7/23	7/29	7/30

*polled out (no formal subcommittee vote)

 

IN GENERAL.--House Republicans had been attempting to "filibuster by amendment" due to concerns about excessive spending levels, but House Democrats have adopted "modified closed rules" that strictly limit amendments.

Congressional appropriators also face the task of reconciling the President's FY 2010 discretionary funding requests that total $9 billion more than the amount allowed by the FY 2010 congressional budget resolution (see April 30, 2009 WBR). Appropriators will also have to decide whether to accept the $17 billion in program reductions and terminations proposed by the Administration (see May 11, 2009 WBR). Obama Administration's proposed "Terminations, Reductions, and Savings"

3. DEFENSE ($631.9 / P-$640.1 / H-636.3) not including military construction and housing which are funded in the Mil Con-VA bill -- Major issues include terminating the F-22 fighter program which has been plagued with operational problems and cost over-runs; funding for a 2d engine for the F-35 Joint Strike Figher program; funding for the C-17 transport plane, the VH-71 presidential helicopter and the Missile Defense Agency's Kinetic Energy Interceptor--all of which the Administration wants to end; proposed cuts in the Army's Future Combat Systems; and rising personnel costs. (Note: the Administration has threatened to veto the Defense Authorization bills if they authorize further funds for the F-22 or disrupt the F-35 program.) House Bill Summary

4. ENERGY-WATER ($33.2 / P-$34.4 / H-$33.3 / S-$34.3) -- Major issues include how to fund the backlog of Army Corps water infrastructure projects; Defense environmental clean-up; funding for the Administration's "Re-Energyse" proposal (energy innovation centers); how to continue the big boost in renewable energy research after the stimulus bill's funds run out; funds to dispose of weapons grade plutonium under a new agreement with Russia; streamlining approval of new nuclear reactors; and the President's proposal to cut funding for the proposed nuclear waste facility at Yucca Mountain. House Bill Summary Senate Bill Summary

5. FINANCIAL SERVICES-GENERAL GOVT ($22.6 / P-$24.2 / H-$24.15 / S-$24.4) -- Major issues include U.S. policy toward Cuba; education vouchers in the District of Columbia; IRS funding; funding for states to upgrade voting equipment; and a provision requiring GM and Chrysler to reinstitute agreements with certain auto dealerships. Summary Table House Bill Summary Senate Bill Summary

6. HOMELAND SECURITY ($40.0 / P-$42.8 / H-$42.6 / S-$42.9) -- Major issues include funding efforts to find and deport illegal immigrants; whether to further fortify the fence being built along 700 miles of the U.S.-Mexico border; whether to bar release of photos of terrorism detainees; allowing Gitmo detainees into the U.S.; whether the proposal to cut the DHS budget starting in 2012 is realistic; the system for providing federal disaster relief; reorganizing the Federal Protective Service; continuing an "antiquated" Coast Guard navigation system; and increased funding for road and rail security. House Bill Summary Senate Bill Summary

7. INTERIOR-ENVIRONMENT ($27.6 / P-$32.3 / H-$32.3 / S-$32.1) -- Major issues include boosting EPA funding; earmarks for water projects; eliminating a program to clean up diesel engines in California; adequacy of wildfire funding; drilling in federal lands and waters; and new taxes and fees on the oil and gas industry. House Summary Table House Bill Summary Senate Bill Summary

8. LABOR-HHS-EDUCATION ($155 / P-$160.7 / H-$160.6 / S-$163.1) -- Major issues include rejecting the Administration's request to target NIH money at specific diseases; modifications and funding increases for the Pell Grant program; funding for school construction; increased funding for OSHA and LIHEAP; lifting a prohibition on federal funds for needle exchange; and eliminating abstinence-only sex education programs. Summary Table House Bill Summary Senate Bill Summary

9. LEGISLATIVE BRANCH ($4.3 / H-$4.9 / S-$4.5) -- Major issues include creating a fund to pay for renovation of the Capitol and House and Senate office building; and requests for more staffing at CBO and GAO. House Bill Summary Senate Bill Summary

10. MILITARY CONSTRUCTION - VA ($72.9 / P-$77.7 / $H-77.9 / S-$76.7) -- Major issues include advance appropriating FY 2011 funds for VA health care; BRAC funding; housing for trainees; more funds for VA health care for treatment that is not service-connected; and funding for Guard and Reserve initiatives. (Since Jan. 2007, Congress will have increased the baseline for the VA by $20 b, a 58% increase.) House Bill Summary House Summary Table Senate Bill Summary

11. STATE-FOREIGN OPERATIONS ($50.0 / P-$52.0 / H-$48.8 / S-$48.7) -- Major issues include the President's proposed 9% increase for the State Dept. and foreign aid programs; conditions attached to funds for the World Bank and IMF; dropping the "Mexico City" policy that prohibited use of international family planning funds for abortion; funding for Millennium Challenge Corporation (aimed at countries that adopt democratic and free-market policies); and funding for the U.N. Population Fund (which is strongly opposed by anti-abortion groups). House Bill Summary Senate Bill Summary

12. TRANSPORTATION-HUD ($55.0 / P-$108.3 / H-68.8) -- Major issues include how to make up the shortfall in gasoline tax revenues flowing into the highway trust fund; funding for high speed passenger rail and a national infrastructure bank; funding for a new air traffic control system; additional funding for low-income housing rental vouchers; increasing loan guarantees through the FHA; and capital and safety improvements to Washington's metrorail system. House Bill Summary Senate Bill Summary