This is one of a series of periodic reports from NHeLPs Washington office, reporting
briefly on recent and forthcoming developments relating to federal policy of interest to
NHeLP advocates and friends. We always appreciate your feedback and comments,
which can be sent to Mara Youdelman at youdelman@healthlaw.org.
SUBJECTS COVERED
Budget Resolution Finalized
Tax Cuts
Governors Medicaid Task Force
Judicial Nominations
Resources
Federal Factoid
BUDGET RESOLUTION FINALIZED
On April 11,the House voted 216-211, largely along party lines (with all the Democrats
and 7 Republicans voting no) to approve a $2.27 trillion FY 2004 budget (H.Con.Res.
95). On the same day, the Senate passed the budget (S.Con.Res. 23) when Vice
President Cheney broke a 50-50 tie (Republican Senators Chaffee (RI) and McCain
(AZ) voted with the Democrats and Democratic Senator Miller (GA) voted with the
Republicans). The budget resolution sets general limits on spending and revenue but
does not address specifics and does not, because it is a resolution, have the force of
law.
The budget does not include an earlier considered provision that would have mandated
$265 billion in spending reductions for social and health programs, including $93 billion
to Medicaid and $2 billion to SCHIP. The budget assumes that transitional medical
assistance and the QI 1 program will be extended for 5 years.
Also, the budget has 5 reserve funds containing:
1). $400 billion for Medicare reform, including a prescription drug benefit;
2). $161 million for the uninsured in FY 2004 (and $50 billion over 10 years);
3). Restoration of expiring SCHIP funds for FY 1998-2000;
4). $43 million for the Family Opportunity Act; and,
5). $3.3 billion in 2004 (and $12.7 billion over 10 years) for the Administrations
Medicaid block grant proposal (see Governors Medicaid Task Force, below).
A reserve fund allows a committee to pass legislation even though the cost exceeds
the committees FY 2004 allocation; the overall cost of the new legislation is expected
to be budget neutral either through tax increases or cost savings in the affected or
other programs. For example, the Medicaid reserve fund assumes savings from
enactment of medical liability reform.
Finally, the budget includes a section that orders authorizing Committees (e.g., the
House Energy and Commerce and the Senate Finance committees, which oversee
Medicaid) to report to the Budget Committeefindings of waste, fraud, and abuse in
their programs, sufficient to reduce spending in an amount to be specified by the
Budget Committees. Any findings, however, will not result in mandatory cuts, but will be
used for future budget development. Over the next several months, the framework
from the budget resolution will form the basis for the 13 annual appropriations bills;
whether and how the issues mentioned above are included in these bills remains an
open question.
TAX CUTS
One of the thorniest issues for the House and Senate was the size of any tax cut that
may be enacted. The budget resolution therefore includes highly unusual
reconciliation instructions that contain two different tax cut numbers $550 billion for
the House and $350 billion for the Senate (for FY 2004-2013). Normally, under Senate
rules, a Senator could raise a point-of-order and require 60 votes to pass any Senate-
drafted tax bill higher than $350 billion. But the budget resolution was designed to
exempt any House-Senate agreed upon tax proposal from such a point-of-order, so
that the final negotiated tax bill could be more than $350 billion (up to the House limit of
$550 billion), with only 51 votes needed for it to pass the Senate.
However, to gain support for the budget resolution from certain Republican Senators
opposed tax cuts as large as the House envisions, Senator Grassley (R-IA), chairman
of the Senate Finance Committee, promised on the Senate floor that he would not
permit, under any circumstances, a law this year that reduces taxes by more than $350
billion over 10 years. Consequently, the ultimate outcome of this debate remains
unclear.
GOVERNORS MEDICAID TASK FORCE
The budget resolution includes authority for Medicaid restructuring, including funding
requested by the President to implement his block grant proposal $3.3 billion in 2004
and $12.7 billion over 7 years. However, any Medicaid proposal must be budget
neutral over 10 years, so that state spending could be severely curtailed after year
seven. (See Capitol Communique, March 10th, 2003 and
http://www.healthlaw.org/pubs/200302.medicaidqanda.html.)
In response to the Administrations proposal, the National Governors Association
(NGA) established a Medicaid Task Force to develop its own proposals for reform.
The members of the Task Force are the governors from Connecticut, Florida, Idaho,
Indiana, Iowa, Kentucky, Maryland, Missouri, New Mexico and North Dakota. The
NGA has expressed concern about six issues: spending on dual-eligibles (low-
income enrollees receiving both Medicare and Medicaid who have their Medicare
premiums paid by Medicaid); long term care costs; financing issues (including the
current federal-state partnership and alternative proposals); increased flexibility; private
partnerships (including using premium assistance and other mechanisms using
Medicaid funding to subsidize the enrollment of individuals in private insurance); and
prescription drugs (including co-pays, benefit design, and eligibility). For more
information on the Task Force, see NGAs website:
http://www.nga.org/nga/newsRoom/)
It is expected that if the governors reach an agreement with the Administration,
legislation on this issue might be introduced as early as May 15th in the House Energy
and Commerce Committee by its chairman, Representative Billy Tauzin (R-LA).
Possible Action: Advocates wishing to do so could contact their Governors (especially
those on the Medicaid Task Force, but also others) and urge them to oppose any NGA
proposal that supports a federal cap on funding or eliminates the federal-state
partnership in Medicaid. Advocates, and especially providers, may wish to identify the
financial and public health consequences that a cap could have in terms of limiting the
flexibility and staff needed to respond to newly developing diseases, such as SARS, or
other currently unforeseen events.
JUDICIAL NOMINATIONS
The nomination of Miguel Estrada for the U.S. Court of Appeal, D.C. Circuit, continues
to be on hold under a filibuster. Meanwhile, the Senate Judiciary Committee has
favorably reported to the full Senate two other nominations that have proven every bit
as controversial as Mr. Estradas. Priscilla Owen has been nominated again by the
President for a seat on the 5th Circuit Court of Appeals. Last year, the Senate
Judiciary Committee rejected Judge Owens nomination, due largely to its perception
that her views on important legal issues, including reproductive rights, were well
outside both the American mainstream and established judicial precedent.
Jeffrey Sutton has been nominated for the 6th Circuit Court of Appeals. Mr. Sutton has
sought out cases in which to argue that Congress has very limited power to require
states to follow the same laws that apply to everyone else, with the result being severe
limitations on the ability of people to gain redress against states that have discriminated
against them on the basis of, e.g., their disabilities or national origin. As a result of his
efforts in this area, 70 national groups and over 375 regional, state and local
organizations to oppose his confirmation.
The Senates debate on these nominees began on April 11th and is expected to
conclude after the Senate returns from recess on April 28th.
Possible Action: Those who believe that the views of these nominees are extreme and
would not well serve either the federal judiciary or the rule of law could urge their
Senators to oppose the nominations of Priscilla Owen and Jeffrey Sutton.
RESOURCES:
NARAL Pro-Choice Americas Proactive Policy Institute has published Breaking
Barriers: A Policy Action Kit Promoting the Reproductive Health of Women of Color and
Low-Income Women. The kit contains policy initiatives aimed at promoting
reproductive health equity. For more information and/or to obtain a copy of Breaking
Barriers, contact NARAL Pro-Choice Americas Proactive Policy Institute at
proactive@ProChoiceAmerica.org or 202-973-3011. You can also access the
Breaking Barriers policy action kit on-line at http://www.ProChoiceAmerica.org.
FEDERAL FACTOID: The Presidents request of $75 billion to pay for the initial costs
of the war in Iraq included funding to "facilitate rapid, UNIVERSAL HEALTH SERVICE
delivery to the Iraqi population." (Dana Milbank, "Bush Administration Using War to
Justify Its Tax Cut," The Washington Post, March 26, 2003) at A4. This will on average
cost each American family $625. Meanwhile, in the U.S., approximately 41 million
people continue to have no health insurance at all.