Stage Set for FY2012 Appropriations

By: Anne Morris

When we last blogged about FY2012 appropriations, the House Labor-Health and Human Services (HHS)-Education Subcommittee had postponed its consideration of the FY2012 Appropriations bill that funds the Health Centers program among other activities.  To date, the House Appropriations Committee has advanced 9 of its 12 bills (all but Labor-HHS-Education, Transportation-Housing and Urban Development, and State-Foreign Operations).  As we’d reported, the House began consideration of the Interior appropriations legislation but had yet to finish when Congress turned its attention to completion of the debt deal and adjourned for the August recess.  Since we last wrote, there have been no further developments with the Senate appropriations process.

Alex Sange’s blog on the debt deal discussed the discretionary limits set in the Budget Control Act.  In FY2012, the discretionary spending limit is $1.043 trillion – roughly $7 billion less than the FY2011-enacted level but $24 billion more than the House-approved Ryan Budget. The House and Senate Appropriations Committees will now be working from the same topline discretionary funding level, and we’ve heard there is an effort underway to coordinate the allocations that each Subcommittee in the House and Senate will have.  Congressional staff estimate that Labor-HHS-Education programs would be facing at least a $2 billion reduction relative to FY2011 funding levels.

Since there’s now a topline discretionary funding level that’s been agreed upon by both chambers, we expect to see Labor-HHS-Education appropriations bills move through the House and Senate Appropriations Committees in September.   With the relatively short window once Congress returns to Washington to complete action on all 12 appropriations bills before the beginning of FY2012, it is entirely possible that there will be at least one Continuing Resolution to keep the government running.

Of course we’ll continue to track appropriations activity in both chambers and any Super Committee proposal that puts forward further reductions in discretionary spending that would take effect in FY2012.  There will be plenty of discussion at the CHI about what Health Center advocates can and should be doing on this front – especially for those of you with Members on the House and Senate Appropriations Committees.  Stay tuned!

Super Committee Named to Broker Next Debt Deal

by Alex Sange, MPP

When we last blogged about the debt deal, or the Budget Control Act of 2011, we generally outlined the pieces of the new law. The first piece of the law makes $900 billion in discretionary spending cuts over the next ten years in order to increase the debt limit for the next few months, which will be split between security and non-security spending. These funding reductions are accomplished by setting discretionary spending limits for appropriation in FY2012 and the next 9 fiscal years and including an enforcement mechanism if these limits are exceeded.  The second piece of the deal requires a new bipartisan, bicameral Joint Select Committee on Deficit Reduction (now commonly referred to as the ‘Super Committee’) to identify and recommend savings of at least $1.2 trillion, which could be spending reductions and/or revenue enhancements, which both Chambers of Congress must pass and the President must sign into law before the debt limit can be increased again.  If the Super Committee can’t meet their goal, automatic cuts totaling whatever portion of the $1.2 trillion mark has yet to be reached (with some exemptions for low-income programs like Medicaid) will go into effect in FY2013 (these cuts would include defense spending).

Strongly incentivized to avoid significant across-the-board reductions, the 12 members of the new Super Committee have a daunting task ahead of them: to craft and advance a policy proposal this fall that finds the required savings and which can pass both Chambers and be accepted by the President.  Last week, House and Senate Leadership selected their Super Committee picks, so here’s the line-up:

HOUSE

Rep. Jeb Hensarling (R-TX-5)*
Rep. Fred Upton (R-MI-6)
Rep. David Camp (R-MI-4)
Rep. James E. Clyburn (D-SC-6)
Rep. Xavier Becerra (D-CA-31)
Rep. Chris Van Hollen (D-MD-8)

SENATE

Sen. Patty Murray (D-WA)*
Sen. Max Baucus (D-MT)
Sen. John F. Kerry (D-MA)
Sen. Pat Toomey (R-PA)
Sen. Jon Kyl (R-AZ)
Sen. Rob Portman (R-OH)

* Committee Co-Chair

Individual House and Senate Committees, including House Energy and Commerce, Senate Health, Education Labor and Pensions (HELP) and Senate Finance Committees, will also have a role weighing in with the Super Committee. Committees of jurisdiction may send over their own set of policy proposals for the Super Committee’s consideration as they craft recommendations.  Several of the Super Committee members are already strong Health Center supporters, and we are working hard to make sure each member of the Committee, and all Members of Congress understand the importance of the Medicaid PPS and funding for the Health Centers program (both discretionary and mandatory).  However, this deal will be a big one, as nothing is off-limits to the Super Committee, and it will be brokered over the next few months.  Stay tuned to the blog and our advocacy alerts to make sure you’re plugged in and ready to speak up for Health Centers when the time comes.

Deal Reached to Reduce Spending, Raise Debt Ceiling

By Alex Sange, MPP

After weeks of deal brokering, and just hours before the U.S. Treasury’s predicted default deadline, the President and House and Senate Leadership have agreed on a compromise to increase the debt limit and reduce spending.  The deal was announced Sunday and the legislation was passed by the House with support of Democrats by a vote of 269-161 on Monday.  The Senate is expected to vote today, sending a bill to the President before the predicted default deadline tonight at midnight.  The package all parties have agreed to will yield a two-stage increase of the debt ceiling.

First, an increase in the debt ceiling now in exchange for about $900 billion in cuts to discretionary spending over ten years, split between security and non-security spending.  There are no revenue increases in this round of deficit reduction and savings are achieved by capping discretionary spending. For FY2012, the cap does produce a real decrease in discretionary spending as compared to FY2011. The reduction, however, is far less than the reduction proposed in the previously-passed House budget, meaning additional resources should be available for non-defense discretionary spending, including the Labor-Health and Human Services bill that funds the Health Centers program.

Second, by January next year the President can request an increase in the debt ceiling for an additional $1.5 trillion (to raise the debt limit past the 2012 election) in exchange for an additional $1.5 trillion in deficit reduction made by a newly appointed super-committee of 12 members from both parties and both chambers.  The new committee would have to recommend savings of at least $1.2 trillion by November 23, and Congress would have to pass the recommendations by December 23. Everything- including taxes, discretionary spending, entitlements such as Social Security, Medicare, and Medicaid are on the table for super-committee consideration. If the Congress doesn’t pass the reductions the super-committee proposes (or they don’t propose enough savings), spending would be subject to across the board reductions (called sequestrations) similar to those in Gramm-Rudman-Hollings, the oft-cited budget act passed in 1985.  Like Gramm-Rudman-Hollings, certain programs including Medicaid are exempted from these automatic sequestrations, should they come into effect.

This far-reaching deal will impact both discretionary and mandatory program funding, and could impact both the Health Centers Program and Medicaid directly either now or in a few months.  While NACHC continues to analyze details of the deal closely for the health center-specific impact, it’s important to note that this bill will move much of the decision-making to the newly created congressional super-committee.  With a directive to act before November 23, this yet-to-be-selected group of Senators and Representatives will have a pivotal role in the next round of spending reductions, which could impact both mandatory and discretionary spending in the very near future.

Stay tuned for specifics on the impact to health center funding, and for more updates as Congress and the President finally approve a deal to raise the debt ceiling and the next round of spending reductions gets underway.