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July 31, 2007 SCHIP--President Threatens Veto BUDGET PROCESS STEP-BY-STEP™ Link to WBR's Appropriations Status Chart Tues, July 31:
Wednesday, August 1:
Thurs, August 2:
August 6:
October 1:
NUSSLE OMB NOMINATION ON HOLD The nomination of former Representative Jim Nussle (R-IA) to be Director of the Office of Management and Budget is on hold pending a meeting between Congressional leaders and President Bush on Wednesday, August 1 to discuss moving forward with the FY 2008 appropriations process. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid requested the meeting with President Bush in a July 20 letter, referring to their differences as "minor." Statements from Senate Homeland Security/Government Affairs Committee nomination hearing: Statements from Senate Budget Committee nomination hearing:
SCHIP / MEDICARE PAYMENT LEGISLATION: Context: SCHIP, the State Children's Health Insurance Program, was established in 1997 and is due to expire on September 30, 2007. The program provides health coverage to children in families whose incomes are low, but somewhat higher than Medicaid's very tight income eligibility limits. This year's FY 2008 Budget Resolution called for reauthorizing and expanding the State Children's Health Insurance Program (SCHIP) to cover children who are eligible but not enrolled. However, the Budget Resolution did not provide funding for an expansion, nor did it provide funding to cover growing costs for existing enrollees. (The "Reserve Fund" mechanism included in the Budget Resolution did not actually provide any funding. It is a procedural mechanism that allows for Budget Resolution spending levels to be increased to accommodate SCHIP reauthorization and expansion, but makes those increases contingent on new spending being fully offset by tax increases or spending cuts. In practical terms this means that any increases above the baseline level of $5 billion per year-which will cover fewer and fewer children as health costs increase-must be offset.) SENATE: On July 19, the Senate Finance Committee approved a $35 billion expansion of SCHIP that would be would be offset by increasing Federal taxes on cigarettes to $1 per pack, a 61 cent per pack increase. On Monday July 30 the Senate began consideration of the bill, S. 1893, and the Administration issued a "high level" veto threat. (A "high level" veto threat states without ambiguity that the President "would veto the bill" rather than his "advisers would recommend a veto.") In the OMB Statement of Administration Policy (SAP), the veto threat stakes out ideological opposition to expansion of SCHIP because it would "federalize" health care leading to "lower quality, longer lines, and fewer options for patients and their doctors." Since each State uses SCHIP funds--much like Medicaid funds--to design its own children's health coverage program, it is unclear why the Administration views the State administered SCHIP program as a "federalization." Also notable, is that the Administration announced the veto intention despite release last week of a bipartisan letter from 43 governors endorsing the Senate bill for its increased funding and "state flexibility." The Finance Committee bill enjoys bipartisan support in the Senate, although it is unclear whether it has the necessary 67 votes to override a veto.
HOUSE: Last Thursday, July 26, the House Ways and Means committee approved its SCHIP reauthorization bill, the Children's Health and Medicare Protection (CHAMP) Act, by a vote of 24-17 (Committee Release). The legislation, HR 3162, would expand SCHIP by $47.8 billion over the next five years. It would also provide $30 billion to avoid a scheduled cut in the Medicare reimbursement rate for physicians, and $10 billion for other Medicare provisions including increased reimbursement rates for rural health providers. The costs of the $90 billion bill would be partially offset by a tobacco tax increase of 45 cent per pack, a smaller increase than the Senate Finance Committee bill, as well as cutting funds for Medicare Advantage, which is Medicare's private sector managed care alternative (which has come under fire because it is costing significantly more per beneficiary than traditional Medicare). However, the bill as reported by the Ways & Means Committee does not yet fully comply with the new House PAYGO Rule; changes can be expected in the bill before it is brought to the House Floor later this week. The House Energy & Commerce Committee (which shares jurisdiction over the bill) began considering the legislation immediately following the Ways & Means Committee action, however the bill ran into a partisan divide and the Committee adjourned Friday afternoon without a vote. The bill is expected to come to the House Floor at the end of this week, under a self-executing Rule that would discharge the bill from Energy & Commerce once it has been adopted by the House. (Committee Press Release) House Minority Leader Boehner's office has indicated he strongly opposes the tobacco tax increase and the proposed Medicare Advantage cuts. He indicated the President would veto the bill and House Republicans would sustain the veto. (Statement from Minority Leader Boehner) DEMOCRATS UNVEIL NEW EARMARK REFORMS House and Senate Democratic leaders unveiled revised lobbying/ethics reform legislation on Monday that would allow Senators to make points of order against conference reports aimed at eliminating earmarks. While conference reports are generally not open to amendment, the provision is similar to the Senate's Byrd Rule that allows points of order to strike provisions in a Budget Reconciliation conference report and then sends the amended bill back to the House for another vote. Under the proposed reform measure, earmarks in conference reports would have to be made public 48 hours prior to a Senate vote. APPROPRIATIONS HEADED TOWARD OCTOBER TRAIN WRECK Context: As reflected in WBR's Appropriations Status Chart when Congress adjourns for its summer recess at the end of this week, the House will have passed all 12 of its appropriations bills, and the Senate will have passed just Homeland Security. Thus far, the President has threatened to veto 7 House bills and the Senate Homeland Security bill because they exceed the President's requests. It appears inevitable that appropriations are heading towards a train wreck: bills will be sent to the President, followed by vetoes and continuing resolutions. Ultimately, congressional Democrats and Administration officials are likely to negotiate an omnibus appropriations bill to fund the government, but this could extend into December after a series of vetoes and, possibly, government shutdowns. The extent of the current impasse between congressional Democrats and the White House rivals the appropriations "train wreck" of 1995 that led to the longest government shutdown in U.S. history. House Passes Transportation-HUD Last week, on July 24, the House passed its FY 2008 Transportation-HUD appropriations bill. The $50.7 billion in discretionary spending is $2.8 billion above the President's request and 6.7% above FY 2007 spending levels. The Administration has threatened to veto the bill for exceeding the President's request. See our July 18 WBR for a summary of the committee reported bill.
House Passes Commerce-Justice-Science Last week, on July 26, the House passed its FY 2008 Commerce-Justice-Science appropriations bill with a total of $53.6 billion in discretionary spending, $2.3 billion above President's request and a 6.4% increase over FY 2007. The Administration has threatened to veto the bill for exceeding the President's request. See our July 18 WBR for a summary of the committee reported bill.
Senate Passes Homeland Security Last week, on July 26, the Senate passed its FY 2008 Homeland Security appropriations bill, with a total of $36.4 billion in discretionary spending, $2.2 billion over the President's request, $185 million over the House-passed version (H.R. 2638), and an 8% increase over FY 2007. Despite an Administration threat to veto the bill for exceeding the President's request, the Senate adopted an amendment offered by Lindsey Graham (R-SC) 89-1 that would provide an additional $3 billion in emergency funding for:
See the June 19 WBR for a summary of committee reported bill.
On a related matter, on July 26 the Senate adopted the conference report on H.R. 1, a bill implementing the recommendations of the 9/11 Commission Report. The following day the House adopted the conference report and President Bush is expected to sign the legislation. (Note that this is an authorizing bill; the actions called for in the bill will require funding by appropriations legislation) The bill:
House Appropriations Reports Defense $459.6 billion - $3.6 billion below President's request - 9.5% increase over FY 2007 On July 25 the House Appropriations Committee approved their FY 2008 Defense appropriations bill which would shift funds away from purchases of big-ticket weapons in the future and towards the more immediate needs of the military, including pay, healthcare, and equipment for the wars in Iraq and Afghanistan. Funding for National Guard and Reserve equipment would total $925 million, an increase of $635 million over FY 2007 that will help the Guard and Reserve meet equipment shortfalls due to lengthy overseas deployments and allow them to better respond to natural disasters in the U.S. Defense healthcare would be funded at $23 billion, an increase of $1.7 billion over FY 2007 and $416 million over the President's request. The President's request had proposed imposing $1.9 billion in fee and premium increases on TRICARE (the U.S. Military health plan) users but the House committee-reported version strikes the fee increase. The bill would provide a 3.5% pay raise for uniformed personnel in contrast to the 3% requested by President Bush. In addition, the bill would allow for the expansion of the Army and the Marines to allow them to reduce the strain of multiple deployments to Iraq and Afghanistan. The Army would receive $4 billion for the addition of 7,000 new soldiers, and the Marine Corps would receive $2 billion for the addition of 5,000 soldiers. Ballistic Missile defense programs would receive $883.4 million less than FY 2007 for a total of $8.498 billion ($298 million below the President's request). The decrease comes amid doubts on the viability of the program and a desire to shift funds towards the military's more immediate needs. HOUSE PASSES FARM BILL Context: A majority of agriculture spending is mandatory (entitlement) spending determined by the multi-year "farm bill" which is up for reauthorization this year. Last Friday, July 27, the House passed H.R. 2419, the 2007 Farm Bill. According to CBO, the bill would provide a $5.8 billion increase in direct spending over the next 5 years (2008-2012), for a total of $286 billion over the same period. The White House has threatened to veto the bill for including expanded Davis-Bacon provisions (pro-labor prevailing wage legislation), providing only minimal reform to commodity payment programs, and using tax increases as offsets for increased spending. Key provisions of the bill would:
The Senate will not consider farm bill legislation until after the August recess, raising the possibility that action will not be completed by September 30, necessitating passage of a short-term extension of current spending authority.
NEW BUDGET DOCS CBO: Effect of the Administration's Tax Deduction Proposal on the Number of Uninsured Children CBO: Testimony on Issues in Reinstating a Statutory Pay-As-You-Go Requirement |
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| Charles S. Konigsberg, President | (202) 587-2984 (ph) | (202) 587-2983 (fax) | ckonigsberg@federalbudgetgroup.com | |
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