| February 7, 2017 |
115TH CONGRESS OUTLOOK ON FY 2017 & FY 2018 BUDGET AND APPROPRIATIONS
Congress faces an April 28th deadline to fund the government after it approved legislation in December to prevent a government shutdown. The negotiations over a spending package could consume valuable time and political capital when Republicans will be eager to move as many policy initiatives as possible before the 100-day mark.
The big question as this deadline approaches is how hard Democrats will work to stand up for the funding parity principle that the discretionary funding community has advocated for in the previous five funding cycles. The NLN supports the funding parity principle which states that for every dollar allocated or cut to defense programs, an equal amount should be allocated or cut for non-defense discretionary programs. With several Senate Democrats up for reelection in 2018 including in eight to 10 from red states, they may not be willing to risk a government shutdown. Funding parity is the only budget mechanism that has saved non-defense discretionary program funding from being cut further than it already has.
FY 2018 will see the return of sequestration, i.e., the spending caps put into place by the Balanced Budget Act. Congress will pass two budgets in 2017: one in January as a vehicle for repealing the health care law and another in the spring to focus on tax reform. In order to use the legislative procedure known as reconciliation, which can’t be filibustered in the Senate, Congress must pass a budget resolution first.
With a repeal of the Affordable Care Act (ACA), the prevention and public health fund (Sec. 4002 of the ACA) will disappear. This fund accounts for about 12 percent or about $1 billion of the Centers for Disease Control and Prevention’s (CDC) budget. This $1 billion funding hole will put further pressure on appropriators to fill this budget gap in the CDC and could complicate the 302(b) allocation (i.e., the programs funded in the Labor, Health and Human Services, and Education (LHHS) appropriations bill) in FY 2018.
Another funding complication in FY 2018 is the possible elimination of the budget gimmicks as well as defunding programs that are appropriated, but not authorized. The NLN Title VIII nursing workforce programs could become a victim of this practice if Congress moves to defund unauthorized programs.
115TH CONGRESS OUTLOOK FOR HEALTH ISSUES
The health issues President Trump and Congress will focus on in the 115th Congress will revolve around repealing the ACA and modifications to entitlement programs including the Medicaid and Medicare programs.
Shortly after the 115th Congress convened, the House and Senate passed a budget reconciliation bill that instructed the House and Senate committees with jurisdiction over the ACA to submit detailed repeal proposals to House and Senate budget committees by January 27. The committees missed the January deadline and are expected to release detailed repeal proposals in February.
Despite how quickly Congress can move on ACA repeal, the effective date could be delayed 18 months to three years to allow Congress time to put together a replacement package. Additionally, Congressional members in both parties have expressed concern about repealing the ACA without a replacement plan in place, slowing the repeal process.
Mental Health Reform and the Opioid Crisis
As you are aware, the NLN supported the 21st Century Cures Act which became law last year. This legislation also included mental health reform legislation that reorganizes and improves accountability for government mental health programs as well as provisions to alleviate the nationwide opioid crisis. Without the ACA’s essential health benefits, insurance plans won’t be required to offer any mental health or substance abuse benefits. This essentially means patients with mental illness as well as substance abuse issues won’t be able to access care.
Congress is also looking at revamping entitlement programs like Medicaid. One possible revamp that could be considered is forcing states to accept reductions in federal funding for their Medicaid programs through either a “per capita cap” or a block grant, both of which would shrink federal funding for state Medicaid programs over time. This would shift significant costs to states and almost certainly lead them to cut Medicaid substantially over time, potentially placing millions of low-income Americans at risk of losing part or all of their health coverage. Additionally, because public health concerns such as epidemics like the Zika virus and natural disasters are not factored into these costs, states could run out of money for their Medicaid programs.
A full repeal of the ACA would undo all of the law’s changes to Medicare and would increase Medicare spending, primarily by restoring higher payments to health care providers and Medicare Advantage plans. The increase in Medicare spending would likely lead to higher Medicare premiums, deductibles, and cost sharing for beneficiaries, and accelerate the insolvency of the Medicare Part A trust fund. It also would eliminate coverage in the “doughnut hole” of the Medicare Part D drug benefit, a coverage gap that is closing by 2020 under the ACA.
115TH CONGRESS OUTLOOK FOR EDUCATION ISSUES
President Trump and Congress will have the opportunity to tackle a host of education issues from funding for disadvantaged and special education students and college access and affordability issues, to student-data privacy and career and technical education.
Higher Education Act Reauthorization
Senate Health, Education, Labor, and Pensions Committee chairman Lamar Alexander (R-TN) has signaled that reauthorizing the Higher Education Act (HEA) is a top priority. In a statement, the senator said education secretary nominee Betsy DeVos' work with Congress would provide "an opportunity to clear out the jungle of red tape that makes it more difficult for students to obtain financial aid and for administrators to manage America's 6,000 colleges and universities." Alexander's omission of school choice in his initial public reaction to DeVos' nomination could mean he's more interested in revamping the higher education law than in pushing a major school choice plan. The HEA is now three years overdue for renewal.
In the House, Representative Virginia Foxx (R-NC) takes over the House Education and Workforce Committee. Foxx would like to see HEA reauthorization focus on increasing transparency, improving the accessibility and affordability of postsecondary education, reforming the accreditation process, and encouraging innovation in the classroom.
In general, for-profit colleges have been criticized by the previous administration for preying on veterans and low-income students, and making false promises about good jobs upon graduation. Some nursing students in their programs have been impacted by being unable to secure needed clinical rotations to complete their degrees. Also, many students at for-profit colleges don't ever finish their degree and make up about 35 percent of all federal student loan defaults. Former President Obama put in place new rules aimed at keeping the schools accountable for students' outcomes by threatening to withhold federal funding. President Trump has not indicated whether or not he would reverse Obama's rules, but has appointed Liberty University president Jerry Falwell, Jr. to lead a task force on higher education issues. Additionally, Congress has been critical of the new regulations, claiming they are too tough on businesses that are trying to offer a career-oriented education to non-traditional students.
The next edition of the Capitol Connection will be published on March 7, 2017.
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