December 2005

Congress Set to Return for Holiday Spending and Saving Spree
Congress’ pre-Thanksgiving attempt to complete legislation for funding federal health, education and social services programs failed in a most unexpected manner on the evening of November 17, 2005.  House and Senate will both return in early December for a second attempt to wrap up all their FY 2006 business before Christmas.  In order to do so, though, Members must find a way to overcome deep and bitter divisions over spending policy. 

Senate and House conferees came to agreement on a final proposed spending bill for the Department of Health and Human Services earlier that week.  The agreement pleased no one.  In an unprecedented action, the conferees kept the bill within self-imposed budget cuts by stripping it of all earmarks.  “Earmark,” for which a less flattering name is “pork,” is the term for a designation of a particular sum for a named spending project in a particular locality.  Earmarks are the way that Representatives and Senators bring home the bacon to their districts and constituents.  The greater the number of earmarks, the less is available to the federal program itself.  Federal administrators are not fond of earmarks.  The recipients and the Members feel differently, for obvious reasons.  The bill funding the Departments of Labor, Education and Health and Human Services, usually loaded down with earmarks, had none. 

The chair of the Senate health appropriations subcommittee responsible for shepherding the final bill through the Senate, Sen. Arlen Specter (R-PA), was open about his unhappiness with cuts on which the House of Representatives had insisted.  The stage was set for passage of an HHS spending bill that would cut the total amount of funding available to the agency by about one percent.  After inflation, that would amount to a cut approaching five percent.  The solution, according to Specter, was to designate $2.1 billion intended for the Low Income Home Energy Assistance Program (LIHEAP) as emergency funding, thereby exempting it from budget caps and making available the same amount to restore the earmarks and other funding cuts. 

The leadership of the House of Representatives refused and that refusal returned to haunt them almost immediately.  Thursday night, the House voted on the bill.  It was widely expected that passage was assured and the bill would then go to the Senate, where its passage was less certain by probable.  Instead, the House voted down the bill by a 15 vote margin, 224-209.  The unexpected votes against the bill came from a varied group of GOP Representatives, some of whom voted against it because they felt it was too lean, others of whom were fiscal conservatives who deemed it too fat.  The House vote saved the Senate from having to act, and both houses voted instead to extend the Continuing Resolution under which part of the federal government has been functioning since the start of the fiscal year, October 1, 2005, until December 17, 2005.

The stage is set for another showdown between House and Senate.  The Senate, emboldened by the House defeat, has instructed its conferees to insist on an emergency designation for LIHEAP, thereby freeing up money to restore the earmarks and put some additional funding back into programs, particularly the National Institutes of Health.  The House leadership prefers not to go back to conference with the Senate at all, but to pass a year-long Continuing Resolution.  If the current Continuing Resolution were simply extended to the end of FY 2006, it would take a toll on many programs, because it provides for funding only at the lower of House, Senate or FY 2005 levels for all programs.  Refer to past issues of Notes from Washington for details on earlier House and Senate action.  http://www.naccho.org/advocacy/washington/2005.cfm.

Funding for the President’s pandemic influenza initiative also remains an open question.  The Senate passed an amendment to the Department of Defense spending bill providing $8.1 billion for pandemic influenza preparedness, including $600 million for state and local preparedness.  The President subsequently proposed $7.1 billion, with $100 million for state and local preparedness.  How Congress will provide these funds, and in what amounts, remains most unclear.  However, there is bipartisan momentum to respond to the President’s request before Christmas. 

Alongside these funding issues are two items with far higher price tags.  The first is a tax bill that emphasizes cutting taxes, and therefore revenue, while the second is a so-called “budget reconciliation” measure that will achieve savings through cuts to entitlement programs, including Medicaid, student loans, food stamps, and child support enforcement. These measures are all politically explosive and their December prospects are difficult to predict.

The House passed a budget reconciliation measure by the barest of margins, 214-212, on the eve of the Thanksgiving recess.  It provides for savings of about $50 billion over five years.  The comparable Senate bill would save about $35 billion over the same period of time and take much smaller bites out of Medicaid, SCHIP and student loans.  Adding to the complexity is House-Senate disagreement over oil drilling in the Arctic National Wildlife Refuge (ANWR), which is also part of the budget measures.  One wouldn’t normally expect the futures of Medicaid and ANWR to be tied together, but they are part of the same volatile political mix.  The holiday season fireworks on Capitol Hill may be better suited to the Fourth of July.