Good morning from Washington where a Sunday bipartisan deal was announced of $1.7 trillion to fund the government through September 30th with $886 billion to defense and $773 to non-defense amounts. Both parties are spinning wins to their members. We remember the good old days when billions were enough to fund the government. We also remember the Fiscal Responsibility Act, last year’s deal between President Biden and then Speaker McCarthy which angered Freedom Caucus members and others and helped propel McCarthy out of his leadership post. The deal announced yesterday adheres largely to the Fiscal Responsibility Act with minor revisions. Will Republicans in the House make Speaker Johnson pay for this agreement? We know with the small two vote margin the Speaker currently enjoys; it is likely bipartisanship (Dem support) will be needed to get this through the House. With the difficulties presented by the right on this deal, coupled with impeachment season – can Majority Leader Schumer and Speaker Johnson navigate this topline budget number through their respective legislative bodies? Or will partisanship rear its ugly head once more in this incredibly unproductive 118th Congress? In this Week Ahead, we tackle both houses together as we examine the ramifications of the upcoming funding deadlines.
The Administration
The President and his negotiators continue to push for a war supplemental for Ukraine and Israel, and as previously reported, the request is being tied into border security reforms. The bipartisan group working on a border security deal, including Secretary of Homeland Security Mayorkas, said they made progress over the weekend and hope to have language later this week. Of course, Secretary Mayorkas is going to be impeached shortly by House Republicans, and it appears the impeachment will be successful in the House, and he will be acquitted in the Senate. Any border negotiation language comes at a time with congressional elections around the corner, and some vulnerable House Democrats may be interested in supporting any reform language.
Congress
The House is back this week after recess. As mentioned, yesterday evening Speaker Johnson, Leader Schumer, and the White House struck a deal for the 2024 Budget topline numbers. Speaker Johnson worked an additional $16 billion worth of cuts beyond the initial McCarthy / Biden 2023 deal, but it will not be enough to appease the far right of his party. The Budget is just the framework for the overall government spending. Speaker Johnson has a narrow majority, and the House Freedom Caucus is surely going to oppose this measure leading the Speaker to rely on Democrat support to get across the finish line.
When members return, they are going to have to work quickly to ensure the departments of Agriculture, Transportation, Energy, Veterans Affairs, and more are funded by January 19th. Then on February 2nd, Department of State and other important agencies will also need to be funded before they run out of money. With the MLK holiday and less than eleven days before the first deadline, a shutdown could still happen. Rumors are swirling from short-term extensions to a longer funding mechanism that ensures both parties do not have to vote on these measures respectively over the next several months. At this point it is only a guessing game of what the government funding solution will be. The Senate wants the House to work with Senate passed appropriations bills, but it is unlikely the House will concur.
Congress will be also examining the border, Ukraine, Israel, and Taiwan funding, which are thorny political issues with both parties. Who says a Presidential election cycle is quiet? There will not be a shortage of fireworks as we kick off this Presidential election year with what Congress needs to accomplish.
Health
Even though much attention will be paid to the progress of deliberations to fund the government and address certain health policy issues, there will be other work on Capitol Hill as well. On Thursday, the House Committee on Veterans Affairs’ will hold a hearing titled: “Rural Access: Is VA Meeting All Veterans Where They Live?”
While an agreement was reached on topline spending numbers over the weekend, uncertainty around what Congress will agree on funding measures extends to health care as well. Multiple health extender deadlines are coming on either January 19 or 20, and questions remain as to what agreement can be reached on any of these expiring programs. Expiring provisions include 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). In addition, authorization for the Pandemic and All Hazards Preparedness Act (PAHPA) also expires, and the House and Senate still seem to be a way off from reconciling their differences, which includes opposing views on whether to include measure to address drug shortages.
In addition, while the House acted on both the Support for Patients and Communities Reauthorization Act and the Lower Costs, More Transparency Act before adjourning in December, it also remains to be determined if these measures might be in play for inclusion in one of the funding bills that Congress must pass in the coming weeks. The Senate remains content to work on its own health care package this year more focused on primary care.
Before Congress adjourned in December, there was momentum building for Congress to provide some relief from the 3.37% cut in Medicare payments that hit physicians and other clinicians on January 1. While full relief is not expected, if provided, the partial relief is expected to be retroactive to January 1, and to 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 late last year.
Create a great week!