Insights^

The debt ceiling, appropriations, infrastructure, reconciliation – Congress has a lot on its plate right now.  On top of that, Congress has another item to address that health care stakeholders have been watching closely: an automatic 4% cut to Medicare starting on January 1, 2022.

What’s going on?  In March, the $1.9 trillion American Rescue Plan Act passed and raised the deficit. This triggered automatic PAYGO cuts to Medicare and other programs because of a law signed in 2010, the Pay-As-You-Go (PAYGO) Act, which prohibited new legislation from increasing the federal budget deficit.

What’s Congress doing?  Congress has always acted to waive PAYGO cuts, but not in March of 2021 when lawmakers failed to reach an agreement. At the time, the House overwhelmingly voted to waive PAYGO, but a similar proposal in the Senate failed to garner enough votes to override a filibuster.  So far, there has been little word from lawmakers about the plans to address PAYGO as the end of the year approaches.

Why does it matter?  The American Hospital Association (AHA) estimates that a 4% reduction in Medicare spending, or about $36 billion, would result in $9.4 billion in cuts to hospitals provider for fee-for-service (FFS) Medicare reimbursement in calendar year 2022.  These losses would come at a time when hospitals and other providers are still grappling with revenue losses related to the COVID-19 pandemic.

It’s not just PAYGO: Health care providers are facing other cuts at the year’s end that, combined with PAYGO, could prove devastating.  These include:

• Medicare sequestration.  Congress passed legislation back in April to extend the moratorium on 2% cuts to Medicare payments, known as sequestration, through the end of 2021.  The 2% cuts were initially postponed by Congress as a part of the CARES Act in 2020 to help providers struggling with the financial burden of the pandemic.
• 2021 Physician Fee Schedule.  Finalized in July, the 2021 Physician Fee Schedule will cut payments to physicians next year by 3.75%.  The cut was initially set to go into effect in 2021, but Congress provided an extra $3 billion in funding in late 2020 to hold on the cuts until the beginning of 2022.

The bottom line: The combination of PAYGO, Medicare sequestration, and the Physician Fee Schedule could mean a 9% reduction in Medicare physician payments next year.

What’s being done?  Leading stakeholder organizations including the AHA and the American Medical Association (AMA) have sent letters to congressional leadership urging action to waive pending PAYGO cuts, as well as the coming Medicare sequester and Physician Fee Schedule cut.  Furthermore, on October 14, 245 bipartisan House members sent a letter to congressional leaders on the aforementioned Medicare cuts.  Congress has provided much assistance to health care providers over the course of the pandemic, and providers are urging Congress to take action once again to help the industry make it through what is hopefully the final stage of the pandemic.

A group of West Virginians had something to say to Sen. Joe Manchin (D-WV) about the $3.5 trillion budget reconciliation bill, so they took their message directly to the Senator’s Washington, DC residence – by kayaking up to his houseboat on the Potomac River.  When legislators are conducting their business in our nation’s capital, just like anyone else, they need a place to stay.  And where members of Congress choose to stay has changed over the years, with potential consequences for how lawmakers do their job.

A Brief History

For much of the 19^th century, members of Congress lived in boarding homes in the Capitol Hill neighborhood.  Senators and Representatives usually chose which house they lived in based on their political affiliation or state.  Known as “messes,” these groupings often included one or two members from a different state or party, allowing lawmakers the chance to build relationships across state or party lines.

As the US entered the 20^th century, a growing federal government required members of Congress to be present more regularly in Washington.  Soon, it became the norm for legislators to have their homes and their families in the Washington, DC area.  By living in the same metropolitan area for most of the year, Representatives and Senators hailing from different political affiliations naturally found ways to form connections outside of legislative business through activities and institutions like schools, playgrounds, sporting events, and places of worship.

1995 marked a major turning point, when then-Speaker Newt Gingrich (R-GA) reduced the workweek in the House from five to three days in order to allow more days for members of his caucus to engage in fundraising.  As Congress entered the new millennium, it became increasingly rare for members to spend their time outside of the halls of Congress in DC.   Instead, many lawmakers now head right to the airport or hit the road once the workweek ends or recess begins to make the journey back to their home states or districts, where they meet with constituents and fend off potential challengers.

With so many legislators going back and forth, what kind of places do they call home when they’re in Washington?

• Congressional offices.  In recent years, dozens of members including former Speaker Paul Ryan (R-WI) and former House Majority Leader Dick Armey (R-TX) have opted to live rent-free in their offices, opting to sleep on sofas or foldable mattresses.  While supporters say office living allows them to focus on their work and ignore the distractions of Washington, DC, detractors say the practice unfairly uses taxpayer-funded housekeeping services.  Members who live in their offices are most likely to travel frequently between Washington and their state/district.
• Group homes or apartments.  Renting a room in a DC rowhouse or apartment isn’t only popular with staffers – members of Congress do it, too.  Similar to congressional offices, apartments are popular with members who travel routinely to and from Washington.  Echoing back to the days where lawmakers lived in boarding homes, some members opt for a group-home style set-up.  A notable example of this is Senate Majority Leader Chuck Schumer (D-NY), Sen. Dick Durbin (D-IL), and former Rep. George Miller (D-CA), who shared a Capitol Hill rowhome until 2014.
• Property ownership in the DC area.  A smaller portion of Senators and Representatives reside on property they own in the Washington, DC area.  This can range from condominiums or rowhomes in the District to single family homes in the suburban communities of Maryland and northern Virginia.  Members in this category generally do not travel as frequently to their home district or state as their fellow legislators, and some even raise their families in the DC area.  Examples of current lawmakers who relocated their families to the DC area following their election to Congress include Sen. Josh Hawley (R-MO) and Rep. Jodey Arrington (R-TX).  A notable exception within this group is lawmakers from Maryland, Virginia, and other jurisdictions in the Mid-Atlantic who already reside withing commuting distance of Washington.

There are several factors that determine where members of Congress choose to live – and how often they travel to and from Washington.

• Cost of living.  Real estate costs have soared in the Washington, DC area over the past decade, with the median price of a rowhouse in the District climbing from $420,000 in 2009 to $760,000 in 2020.
• Competitiveness of seat.  Members who expect to face serious primary or general challenges from an opponent  are incentivized  to return more frequently to their home district or state to campaign or fundraise.  Due to frequent travel, they are more likely to keep their housing footprint in the District limited.  In contrast, members who hold a “safe” seat might opt to spend more time and put down roots in the District.
• Personal preference.  Some members, regardless of their geographic proximity to Washington, choose to bring their families to the Washington, DC area to “keep them grounded” and maintain relationships with children and spouses.  These members more likely own property and spend more time in the National Capitol Region.

Why does a member’s housing situation matter?  The growing polarization in Congress over the last 20-plus years has coincided with the trend of members not putting down roots in the Washington, DC area.  When Representatives and Senators are constantly jetting out of DC, it limits the chances for them to bond, socialize, and see one another as peers.  If more members spent more time living in the DC area, could this shift the current political climate and contribute more to bipartisanship?

On September 19, Democrats’ plans to offer undocumented immigrants a legal pathway to permanent residency was torpedoed when the Senate Parliamentarian ruled against including immigration reform in their $3.5 trillion human infrastructure package.   As Democrats attempt to advance key priorities via budget reconciliation, the role of the Senate Parliamentarian has garnered much attention.

Background: Democrats have long been seeking a way to offer permanent residency to Dreamers, who are undocumented immigrants who were brought to the US at a young age and have lived most of their lives in America. Currently, many Dreamers do not have a clear path to gain legal permanent residence status, which would then allow them to pursue citizenship.

The role: The Senate parliamentarian interprets the Senate’s often complicated rules.  The position of the Senate Parliamentarian is strictly non-partisan, and individuals are traditionally appointed to the role from senior staff in the Parliamentarian office. There have only been six Senate Parliamentarians since the position was created in 1935.  Senate Parliamentarians have no defined term length and serve at the pleasure of the Majority Leader.  The current Parliamentarian is Elizabeth MacDonough, who was appointed by then-Majority Leader Harry Reid (D-NV) as the first woman to hold the position in 2012.

Did you know?  The Senate Parliamentarian’s salary is $171,315 per year, as of 2019.

Some of the things the Senate Parliamentarian might do include:

• Advising the Senate’s presiding officer, or Majority Leader, on the appropriate procedure, statements, and responses of the Senate.
• Offering written guidance on procedural questions.
• Recommending the referral of measures to relevant committees.
• Maintaining and publishing procedural rules.

It’s not just the Senate: The House of Representatives has its own Parliamentarian, too, with a similar salary and responsibilities.  The current House Parliamentarian is Jason Smith (not to be confused with the Missouri Congressman), who was appointed in 2010.

Why the Senate parliamentarian is getting so much attention this year:  The Democratic majority is using the budget reconciliation process to accomplish their policy goals and bypass the need for Republican support. Therefore, enter the Parliamentarian, who decides what can and can’t be included in legislation passed under this process. The Parliamentarian uses the Byrd Rule to analyze legislation and makes a determination on whether a provision produces a change in spending or revenues and does not increase the deficit within a set period.

This isn’t the first time where the Parliamentarian says no to a Democrat policy: Back in March, top Senate Democrats were upset by the Parliamentarian’s decision to not include a minimum wage increase in the American Rescue Plan due to an “incidental” impact on the federal budget.

What Could Senate Democrats Do? The Senate Majority Leader does have the authority to fire the Senate Parliamentarian.  This last happened in 2001, when then-Majority Leader Trent Lott (R-MS) fired then-Parliamentarian Robert Dover after he interpreted Senate rules in way that would have made it difficult to pass then-President George W. Bush’s tax cut proposal through budget reconciliation.

However, MacDonough’s job seems safe for now.  While Majority Leader Chuck Schumer (D-NY) has expressed disappointment with her recent rulings, he has yet to call for the Parliamentarian to be replaced.  Senate Majority Whip Dick Durbin (D-IL) has similarly indicated he doesn’t think MacDonough should be dismissed.  Instead, Senate Democrats have expressed a willingness to advance immigration reform and other priorities that can’t be included in budget reconciliation through regular order, even if the chances of doing so are slim to none.

Senate Democrats could also overrule MacDonough’s ruling with the support of all 50 Senate Democrats and Vice President Harris, but this won’t be happening, either.  Both Sens. Joe Manchin (D-WV) and Kyrsten Sinema  (D-AZ) have previously stated they won’t overrule the parliamentarian, while Sens. Dick Durbin (D-IL) and Bob Menendez (D-NJ) have thrown cold water on the idea.

Lawmakers are facing a September like no other.  With only a dozen or days scheduled to be in person in DC, Members of Congress must address a $3.5 trillion “human infrastructure” package, a $1 trillion bipartisan infrastructure bill, last month’s expiration of the debt ceiling, and appropriations for Fiscal Year (FY) 2022.  Each of these major bills carries several steps of their own, including committee hearings, markups, and behind-the-scenes negotiation.  How will lawmakers on Capitol Hill make it through such a complicated month?

Calendar At-A-Glance

Here’s how the calendar sets up.

Okay, Let’s Break it Down

Reconciliation

So, the House committees are meeting to mark-up the $3.5 trillion human infrastructure bill, also known as the reconciliation bill.  Speaker Nancy Pelosi (D-CA) has expressed a desire to pass the entire reconciliation bill by October 1, punting her version over to the Senate.

But what about the Senate?  The Senate is out till September 13. Even though their version of the reconciliation bill is due September 15, the Senate has yet to schedule any committee hearings.  Remember too that the Senate committees are a 50:50 split, meaning it’s harder to pass partisan legislation like this out of committee.  This all leads us to believe that the Senate may only release concepts or principles around what will be included in the legislation to meet the deadline.

We expect that when the House passes their bill, the Senate substitute the bill with their own changes. The Senate floor process includes debate and likely another all-night vote-a-rama session.  With any changes the Senate makes to the bill, the House will have to vote again, meaning the reconciliation bill has a way to go before it reaches President Biden’s desk.

Bipartisan Infrastructure Bill

Speaker Pelosi issued a September 27 deadline for the House to vote on the bill as the Senate approved it by a 69-30 vote on August 10.  If the bill doesn’t get passed in time, the House will have to vote to extend the Highway Trust Fund, which is estimated to become insolvent by October 1.

Debt Ceiling

Oh yeah, and Congress will need to raise or suspend the debt ceiling to avoid the US from defaulting on its loans. Usually, lawmakers generally agree in a bipartisan manner to increase the debt limit, but Republicans have publicly stated they will not support raising the debt limit and could force Democrats to raise the debt limit in a partisan way and without any Republican support.

Appropriations

Even though the House has passed 9 out of 12 appropriations bills, the work has just begun in the Senate.  This signals the likelihood that Congress will need to pass a continuing resolution before September 30^th to keep the government funded past September.

How Will Things Play Out?

Between a packed schedule, partisan differences in key legislation, and divisions among some Democrats, September is shaping up to be an unpredictable month for Congress.  Below are some key items to watch for.

Will the House pass the bipartisan infrastructure bill by September 27?

Speaker Pelosi announced the September 27 deadline per an agreement with a group of moderate House Democrats who didn’t want to vote on the $3.5 trillion reconciliation bill without voting on the bipartisan infrastructure bill first.  Many moderate Democrats are holding firm on this agreement to pass this bill, even if the Senate is not finished with their reconciliation bill. Therefore, the divide between moderates and progressives on how to move forward with the legislation could create more problems for the Speaker.

Will Sinema and Manchin demand a lower dollar amount for reconciliation?

However, the main question that is still on everyone’s mind is will the Democrats unanimously support $3.5 trillion in new spending as moderates in both chambers have concerns around this high price tag.

Even though Senate Democrats unanimously approved the budget resolution, two key moderate Democrats have signaled an unwillingness to approve $3.5 trillion in new spending, thus raising doubts about the bill’s future.  In a statement issued after the budget resolution’s passage, Sen. Joe Manchin (D-WV) expressed “serious concerns about the grave consequences” facing Americans if Congress decides to spend an additional $3.5 trillion.  On August 23, a spokesperson for Sen. Kyrsten Sinema (D-AZ) said the Senator would simply not back a $3.5 trillion bill. As the next couple of weeks unfold, all eyes will be on both Senators as the negotiations are ongoing around the reconciliation bill.

September Is Only the Beginning

With September as thorny as it is, Q4 is shaping up to be the biggest legislative fall in a number of years.  And just when they figure out these massive domestic policy issues, 2022 will be just around the corner, and with it a quick transition to campaign season for the midterm elections.

The Congressional Bourbon Caucus.  The Congressional Peanut Caucus.  The Congressional Rodeo Caucus.  It seems like there’s a congressional caucus for every type of issue or policy.  What exactly are congressional caucuses, and do they have any impact on the policymaking process?

All About Congressional Caucuses

Officially known as congressional member organizations, congressional caucuses are voluntary associations consisting of Representatives and Senators who share specific policy goals or interests.  These groups run the gamut of more serious and powerful organizations, such as the Congressional Black Caucus and the Republican Study Group, to ones with a more offbeat or narrow focus, such as the Congressional Bowhunting and Archery Caucus, and the Congressional Candy Caucus.  Importantly, these congressional member organizations are not to be confused with party caucuses and conferences, which are the House Democratic Caucus, House Republican Conference, Senate Democratic Caucus and Senate Republican Conference.

Congressional caucuses date back to the early 1800s and have grown in number in recent years.  There are currently 460 caucuses in the 117^th Congress, compared to only 100 member organizations in 1993.   Any caucus that includes House members must register with the House Committee on House Administration and follow certain rules, which include the following:

• Caucuses cannot use franking privileges (free mail privileges), although individual members may use official resources for communication related to a caucus.
• At least one officer or chair of a congressional member organization must be a House member.
• Members can use personal funds to support a caucus but are not allowed to accept goods or services from private organizations to support a caucus.

The Senate does not have any separate guidelines or regulations for Senators who participate in caucuses and are just subject to follow the Rules of the Senate and the Senate Code of Official Conduct,

Types of Caucuses

Congressional caucuses can fall into one of three categories depending on their constituency and interests.

• Ideological Caucuses.  Caucuses based around an ideology can represent certain ideological views within a particular party.  In America’s two-party system, each party tends to have a wide ideological spectrum or a “big tent,” meaning there is room within a party for members with more specific ideologies to gather.  All ideological caucuses are in the House, and current examples on the Democratic side include the Blue Dog Coalition, the New Democrat Coalition, and the Congressional Progressive Caucus.  Republican examples of ideological caucuses include the Tuesday Group, the Republican Study Committee, and the Freedom Caucus.  One group, the Problem Solvers Caucus, contains House members of both parties that seek bipartisan collaboration on key issues.
• National Constituency Caucuses.  Some caucuses advocate the interests of specific groups of constituents, such as women, racial or ethnic groups, and veterans.   Examples include the Congressional Black Caucus, the Congressional Hispanic Conference, the Congressional Asian Pacific American Caucus, and the Servicewomen and Women Veterans Caucus.
• Interest Group Caucuses.  The most common caucuses consist of members with a shared policy or interest.  Examples of these generally bipartisan caucuses include the Congressional Bike Caucus, the Congressional Coal Caucus, the Congressional Dairy Farmer Caucus,  Congressional Fire Services Caucus, and the Congressional Cyber Security Caucus.  A number of interest group caucuses focus on medical issues or diseases, such as the Congressional Cystic Fibrosis Caucus, the Congressional Telehealth Caucus, the Congressional Lupus Caucus, and the Rare Disease Caucus.

Do Caucuses Matter?

On paper, caucuses have no real authority.  Unlike committees, caucuses lack the ability to markup bills or hire their own staff, for instance.  However, they do serve a function by providing a way for like-minded Representatives and Senators with mutual interests and goals to get to know one another.  Through these relationships and associations, caucuses members often work together to develop specific ideas that can become legislation.  During the 115^th Congress and 116^th Congress, members of the Problems Solvers Caucus periodically released proposals and legislation on important issues where caucus members believed Democrats and Republicans could find common ground.  For example, some of the Problem Solvers Caucus’s ideas eventually became law, including a proposal to repeal the medical device tax. At the moment, the Problem Solvers Caucus has been active during the 117^th Congress around the bipartisan infrastructure framework.

Additionally, caucuses formed around diseases and medical issues are particularly active on creating health care legislation.  For instance, Reps. Diana DeGette (D-CO) and Tom Reed (R-NY), who co-chair the Congressional Diabetes Caucus, have introduced legislation to address high insulin prices and expand diabetes prevention programs.  Additionally, members of the Congressional Telehealth Caucus have introduced legislation to ensure some telehealth services temporarily expanded under the COVID-19 public health emergency are made permanent.