Good morning from Washington as we embark on a New Year filled with resolutions, hopes, and a return to a Congress challenged with budget deadlines, supplemental war funding, and border security reform. As Congress returns to Washington next week, this week we look examine some of the upcoming challenges for 2024 from an electoral and policy perspective. Many of us make resolutions for the New Year, we can only hope Congress will resolve to remove its mark in this second session as one of the least productive legislative bodies in history. Welcome to the Week Ahead!
The Administration
Surely the biggest storyline in 2024 will be President Biden’s quest for reelection. He will have to overcome concerns about his polling numbers, as well as his age. In recent days, Democrats have rallied behind President Biden arguing the nation has beaten back COVID, the economy is strong, and so is our nation’s standing. Many Americans have yet to give Biden credit for avoiding a recession and having low unemployment numbers which defy expectations. President Biden and his team have dismissed low polling numbers as not being relevant 10 months away from any real election. One thing which is real, is the President never has been popular with high polling numbers. If anything, Biden’s career has been one with consistent low comeback numbers, but one thing can be said: he previously beat the expected Republican challenger, Donald Trump.
For 2024, Health and Human Services will continue to drive home its work on lowering drug costs through Inflation Reduction Act. As discussed last year, the administration will continue to work on drug pricing, mental health, and reproductive health as some of its top priorities for 2024. Key administration officials will continue to discuss the IRA’s impact on Medicare drug pricing, as President Biden’s campaign works to influence seniors prior to the election. Additionally, the agency will have to form an artificial intelligence task force by the end of the month per President Biden’s Executive Order.
In the meantime, officials from the Biden administration will continue to be involved In budget talks and pushing for war funding for our allies – both of which are tied to border security. With looming deadlines in January and February, President Biden’s team will have to walk a tightline between needed border reforms and not upsetting his Democrat colleagues on the issue.
The Senate
As we approach the 2024 election, it remains clear maintaining control of the Senate is a challenge for Democrats. Incumbent Democrats are defending seats in red states like Montana and Ohio, while West Virginia flips due to the retirement of Joe Manchin. One of the biggest mysteries remains in Arizona since Senator Sinema has yet to announce if she is running again.
The Senate is in session next week kicking off 2024 with a major role in pending deadlines. Senate appropriators want to take the lead in the funding process – but you know… partisan issues prevail between the two bodies. Senate negotiators have been engaged in border security talks for weeks along with folks from team Biden. The Rubik’s Cube of negotiations ties border security to additional funding for Ukraine. Majority Leader Schumer has tied Ukraine to additional funding for Israel and Taiwan. To make the negotiations even more complex, Speaker Johnson only wants the House bill H.R. 2 to be the only discussion on border security, even though it is a nonstarter in the Senate. Are you tired yet? The New Year is upon us!
The House
Speaker Johnson is going to have his work cut out for him to hang on to a narrow two-seat majority for this Presidential election year. The Speaker is tasked with funding the government in 16 days, producing a plan for the border, Ukraine, Israel, and Taiwan. All while trying to sell the American people on increasing the Republican majority and selling another term for the likely presidential candidate Trump.
The funding fight is still a battle where the Speaker will likely need Democratic support. Does Speaker Johnson keep the same deal as the McCarthy cut or does he try and negotiate something new to keep the far right of the party happy? Does he just vote on a clean Continuing Resolution to keep the government running? All questions that we in DC want to answer.
What we do know is the Speaker still would like to finish all twelve appropriations bills this year. The likelihood of this happening is slim to none because of divisions in the party and narrow voting margins. We are predicting the outcome in February will be a year-long continuing resolution to fund the government at current levels through Fiscal Year 2024.
Health
While the House remains in recess, things are expected to pick up quickly next week when the House reconvenes. The House will only have eight legislative days before the first tranche of government funding expires on January 19, and then the House will only have an additional four legislative days before the second government funding deadline hits on February 2. With the limited timeframe to fund government operations for Fiscal Year 2024, there has also been speculation that the House could extend the appropriations bills set to expire on January 19 to February 2.
With multiple health extender deadlines hitting on either January 19 or 20, whatever package is passed to fund the government past January 19 will include at least some health provisions. Among expiring provisions in need of extension are payments under the Medicaid Disproportionate Share Hospitals (DSH) Program, the Work Geographic Practice Cost Index (GPCI) Floor, and funding for Teaching Health Center Graduate Medical Education (THC GME), Community Health Centers (CHCs), and the National Health Service Corps (NHSC). What remains to be determined in the coming days is what additional health measures might catch a ride with the must-pass January package. With a flurry of activity on health legislation before the House adjourned for 2023, provisions included in both the Support for Patients and Communities Reauthorization Act and the Lower Costs, More Transparency Act could be in play for being attached to government funding legislation in either January or February.
Physicians and much of the provider community will also continue their push for relief from the 3.37% cut in Medicare physician payments that took effect on January 1. While Congress is not expected to provide full relief from the cuts, provisions to provide partial relief, along with an extension of incentive payments for alternative payment models, retroactive to January 1, could be included with the January government funding measure. Should Congress provide some relief from the cuts, it is expected that the relief would closely align with 1.25% offset of 3.37% cut that was passed by the Senate Finance Committee and by the House Energy and Commerce Committee and in separate measures in November and December, respectively.
Create a great week!
