Update For Clients And Friends
February 16, 2022
Democrats Look to Move Individual Pieces of Build Back Better
The Biden administration and Democrats in Congress are looking for opportunities to advance portions of their agenda that were part of the “Build Back Better” (BBB) legislation. In December, Senator Joe Manchin (D-W.Va.) declared his opposition to the House version of the BBB bill, as well as the version drafted by Senate Democratic leadership. Manchin is a key Democratic “swing” vote. Once that occurred, it became clear that only a scaled back version of the bill would advance. Since then, President Joe Biden and Democratic congressional leaders have conceded that perhaps it is best to redraft a smaller bill, or perhaps to “break out” and move independently, individual pieces that have the most bipartisan support (President Biden press conference January 19, 2022.)
While it is still largely unclear which, if any, portions of the legislation have a chance for approval, there is increasing talk in the White House about reconfiguring the plan to focus more on deficit reduction. Large federal debt is often seen as a drag on the economy and a key driver of inflation, so the White House is feeling pressure to address those concerns. Provisions that may advance include:
- Prescription drugs – Members of both parties are interested in helping Americans afford prescription medicines. BBB seeks to give the federal government the power to negotiate for lower drug prices in the Medicare program – a step that could lower out of pocket costs for seniors and reduce the share of drug prices covered by the government.
- Taxes – Manchin, in particular, is interested in reforming the tax code to provide more benefits for middle- and lower-income Americans. The BBB seeks to increase taxes on the wealthy and corporations to pay for many new and expanded government programs – provisions that could be re-drafted to emphasize deficit reduction through higher taxes.
- Clean Energy – BBB includes billions of dollars in tax incentives and research funding for clean energy programs championed by the progressive wing of the Democratic party. But if these provisions can be recast as job creators in the green energy sector, significant bipartisan support may develop.
It is important to remember that, large scale, society changing legislation like the BBB is normally adopted only when one party has a large majority in Congress. (Think of voting rights legislation and the creation of Medicare and Medicaid in the mid-1960s when President Lydon Johnson enjoyed large Democratic majorities in Congress.) The fact that the United States Senate is evenly divided, and the House has one of the smallest Democratic majorities in memory, has always made adoption of massive legislation like BBB an uphill battle. There now appears to be a grudging acceptance of that fact.
While it remains to be seen which pieces of the bill might garner majority support, The Livingston Group will continuously monitor the situation to determine what version of the legislation may be advancing in the weeks and months to come.
Congress Acts on Government Spending Legislation
The House passed a stopgap appropriations bill on February 8th to extend government spending through March 11th. The Senate is expected to pass the measure later this week. The bill, also known as a “continuing resolution” (CR), will buy time for congressional appropriations committees to put the final touches on an “omnibus” appropriations bill to fund the government through the remainder of fiscal year 2022 (FY22). Senior Appropriations Committee members announced a framework for an agreement on February 9th. The agreement is said to have equal increases for defense and nondefense spending, which had been a key sticking point between Democrats and Republicans in the negotiations. It remains to be seen if agreement can be reached on other aspects of the deal, but early indications are that so-called “policy riders” that exist under current law will remain intact.
As a reminder, FY22 began October 1st and ends September 30th. Any omnibus bill that is enacted would provide funding for the balance of the fiscal year. An omnibus would also include the congressionally directed spending that was approved by the appropriations subcommittees when they passed their FY22 spending bills last year. As experts in the congressional appropriations process, The Livingston Group has several clients for whom such language was approved.
Health Care Issues Remain Top of Mind
While COVID-19 has not abated, many of the worst aspects of the pandemic seem to have lessened somewhat. Still, Congress and the White House are carefully monitoring the situation, ready to act quickly should a new outbreak or other aspects of the pandemic re-emerge. Meantime, Congress is showing significant interest in several other health care issues.
- Prescription drug costs may be addressed as part of a revised Build Back Better proposal as lawmakers on both sides of the aisle continue to be pressured for relief from high drug costs.
- In addition, Congress must reauthorize the Prescription Drug User Fee Act (PDUFA) before the law expires on September 30th. PDUFA provides user fee funding for the Food and Drug Administration’s prescription drug approval process. Often this bill becomes a vehicle for other healthcare related proposals — despite efforts by congressional leaders to keep the bill “clean.”
- Lawmakers are also under pressure from hospitals and other health provider organizations for additional funding as they struggle with the fall-out from COVID. The emerging omnibus appropriations bill may be one vehicle for additional COVID relief. It is also possible that other bills emerge to address additional healthcare or economic impacts of COVID later in the session.
- The President has also prioritized the creation of the Advanced Research Projects Agency for Health (ARPA-H), a new federal entity to spur development of medical cures for high impact diseases like cancer, Alzheimer’s, diabetes and other illnesses. Last week, a key House committee held a hearing on the proposal where bipartisan support was offered, though some Republicans questioned the need to create a new federal agency.
- There could also be additional action to address fentanyl and other drug abuse issues, especially given a recent report from the Centers for Disease Control on the severity of the problem. In addition, the bipartisan Commission on Combating Synthetic Opioid trafficking released its report offering recommendations to reduce the number of overdose deaths. Opioid abuse – which spurred significant congressional action prior to the pandemic — has only worsened over the last two years, leading many to label it a “crisis within the crisis.”
- Congress may also seek to extend the availability of telehealth services that were authorized as part of the COVID public health emergency declared in 2020. In one example of bipartisan cooperation, Senators Cortez Masto (D-Nev.) and Young (R-Ind.) — both members of the powerful Senate Finance Committee — have introduced a bill to extend the availability of telehealth services in Medicare.
The Livingston Group will continue to work on all these issues on behalf of its healthcare clients.
China Competition Bill Clears House
Last week, the House voted 220-210 to pass the America COMPETES Act (H.R. 4521), legislation aimed at increasing U.S. competitiveness with China. Among other provisions, the bill provides $52 billion for research and domestic manufacturing of electronic semiconductor chips. The measure passed with only a single Republican vote in the House. In contrast, the Senate version, the U.S. Innovation and Competition Act, passed with the support of 19 Republican Senators last June. The two versions will now have to be reconciled in negotiations between the House and Senate before being sent to the President. It remains unclear how quickly the two chambers can resolve the considerable differences between the two measures, but given the pressures the Biden Administration is facing on the international front, the legislation remains a big priority for the White House and congressional Democrats.
Senator Ben Ray Lujan Suffers Stroke
Our thoughts and prayers for a speedy recovery go out to Senator Ben Ray Lujan (D-New Mex.) who suffered a stroke in late January. The Senator has announced that he is doing well and plans to return to work in “a few short weeks.” But, the exact timing of his return remains unclear. His doctors announced his treatment involved “decompression surgery,” in which a piece of the skull is removed to accommodate brain swelling. Given the seriousness of this treatment, the Senator’s return may not be imminent. With the Senate evenly divided between Democrats and Republicans, Senator Lujan’s vote would be needed to advance any partisan legislative priorities or appointments advanced by the Biden Administration. While this has certainly complicated the legislative picture, it may encourage efforts to forge bipartisan compromises where strict party-line votes are not necessary. But that remains to be seen!
Political Headwinds Still Challenge Biden and Congressional Democrats
President Joe Biden’s support among Americans continues to slip with a new poll showing that nearly 60% disapprove of the job he is doing as President. The survey is the latest in a string of polls showing Biden’s favorability plunging. Many believe that such low poll numbers auger poorly for Democrats’ chances of retaining the majority in Congress come midterm elections in November. In one show of nervousness, 29 Democratic House members have already announced their retirements – the most since 1996. In fact, when voters were asked which party they would like to see control Congress – the so-called “generic ballot question” – recent surveys indicate a preference for Republicans. Historically, Democrats have been strongly favored, so the fact that Republicans have an edge on this question is significant. While it is never a good idea for political parties to “count their chickens before they hatch,” at this juncture, things seem to favor Republicans in the midterm elections.