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May 2011


House Continues Piecemeal Cuts to Health Reform Law

With FY11 appropriations legislation for the federal government finalized, the process of determining FY12 funding has begun, with continued attempts in the House of Representatives to cut spending and repeal pieces of the Affordable Care Act (ACA). Final FY11 funding levels for public health programs are still unknown with the Administration having to report back to Congress on their FY11 spending plans by May 13.It is NACCHO's hope that after the 13th FY11 funding amounts will become public. NACCHO and ASTHO have also sent joint letters to the CDC Director, HHS Secretary, and key staff at the Office of Management and Budget regarding the cuts that will be made in FY11, urging them to preserve funding for the Preventive Health Block Grant and the Public Health Emergency Preparedness program.

FY12 Appropriations Update

The first step of the FY12 funding process is the development of the non-binding spending blueprint for the year and beyond known as the budget resolution. As reported previously, the House of Representatives passed its FY12 Budget Resolution authored by House Budget Committee Chairman Paul Ryan (R-WI) on April 15.

Overall, the resolution proposes to reduce spending by $5.8 trillion over the next decade, and includes the following: 

  • Holds overall domestic discretionary spending below 2008 levels and holds this category of funding to a five year freeze. The budget also proposes a binding cap on total spending as a percentage of the economy.
  • Repeals the ACA (The plan keeps Medicare cuts but repeals the remainder of the law.)
  • Converts the federal share of Medicaid spending into a block grant indexed for inflation and population growth. In addition to creating a block grant the budget proposal rolls back the Medicaid expansion authorized by the ACA.

The budget resolution will shape the FY12 allocations for the Appropriations subcommittees. The Senate budget resolution currently being drafted by Senate Budget Chairman Kent Conrad (D-ND) is not expected to include such draconian cuts as the House budget resolution. Press reports now indicate that the Senate budget resolution is likely to include $4 trillion in cuts over 10 years with $1 trillion in new revenue.

The House and Senate Appropriations Committees are moving forward with receiving input on their bills. NACCHO has submitted testimony for the record to Labor-Health and Human Services-Education and Agriculture-Rural Development-Food and Drug Administration subcommittees on our funding priorities. NACCHO members and staff have met with virtually every member of the two Subcommittees to discuss our FY12 funding priorities and urge their adoption.

Members of the House have until May 20 and Senators have until June 10 to weigh-in with the Appropriations Committees on their funding priorities for FY12.The House Appropriations Subcommittees are expected to start marking up bills as early as late May with the goal of passing all 12 spending bills through the House prior to the August recess.Now is the time to weigh-in with your Representatives and Senators on the funding priorities for local health departments. Sample letters you can customize and send to your Representatives and Senators can be found at NACCHO's Legislative Action Center.

Budget Deficit and Debt Ceiling Debate

The FY12 appropriations process will be further complicated by Congressional efforts to take up must-pass legislation to raise the nation's debt ceiling. Treasury Secretary Geithner now predicts that legislation raising the debt ceiling must be passed enacted by early August to avoid default. Both Republicans and Democrats have stated that there must be an agreed upon path to address the budget deficit before they are willing to raise the debt ceiling. Therefore, discussion to cut mandatory entitlement programs such as Medicare and Medicaid, as well as deep cuts in discretionary spending will heat up over the course of the late spring and early summer. There are a number of conversations going on to try to reach a bipartisan consensus on a path forward.

Vice President Biden is convening a working group to discuss deficit reduction and make recommendations to the President. Members of the working group include the following Democratic members: Senate Appropriations Committee Chairman Daniel Inouye (D-HI), Senate Finance Committee Chairman Max Baucus (D-MT), House Assistant Democratic Leader James Clyburn (D-SC) and Rep. Chris Van Hollen (D-MD), ranking member of the Budget Committee. Republican members include Senate Minority Whip Jon Kyl (R-AZ) and House Majority Leader Eric Cantor (R-VA).

At the same time, the so-called "Gang of Six" Senators are working to come up with a deficit-cutting plan. Senators involved in these negotiations include: Sen. Saxby Chambliss (R-AL), Sen. Tom Coburn (R-OK), Sen. Kent Conrad (D-ND), Sen. Mike Crapo (R-ID), Sen. Richard Durbin (D-IL) and Sen. Mark Warner (D-VA). This group is expected to release a plan based on the Bowles-Simpson Deficit Commission's recommendations. The Bowles-Simpson Commission recommended $1 trillion in new revenues over ten years; if the Gang of Six makes a similar recommendation it is unlikely to garner support from Senate and House Republicans.

House Republicans are expected to propose a "global spending cap" in exchange for a debt ceiling vote. Such a cap would be set far below current spending levels and would require increasing cuts over time to discretionary and entitlement spending. A global spending cap may be politically popular because it would not require demarcation of specific cuts, however, it would seriously constrain spending for future years for a host of discretionary programs, including public health programs. On May 9, House Speaker John Boehner (R-OH) stated publicly that he will require $4 trillion in cuts in exchange for raising the debt ceiling. Senators Bob Corker (R-TN), Claire McCaskill (D-MO) and Joseph Lieberman (I-CT) have proposed a similar bill in the Senate that would hold spending to 20.6 percent of GDP. A two-thirds majority vote in both the House and Senate would be required to override the cap. These caps once reached would result in deep cuts to mandatory and discretionary programs.

NACCHO continues to advocate for specific funding in FY12, while working with partners in coalition on the larger budget issues. If a global spending cap or similar scenario were enacted, appropriators would have very little flexibility in annual appropriations bills for the foreseeable future.

Affordable Care Act Piecemeal Repeal

Back in January, the House passed and the Senate rejected a bill, H.R. 2 that repealed in total the Affordable Care Act (ACA).  On April 14, the House passed H. Res. Con. 35 by a vote of 240-185 to defund the ACA including funding for the Prevention and Public Health Fund. The bill failed in the Senate by a vote of 47-53. Legislative efforts have now turned to repealing or substantially altering select provision of the law.

Prevention and Public Health Fund:  As expected the House of Representatives voted to eliminate the Prevention and Public Health Fund, one of NACCHO's top advocacy priorities. The House of Representatives voted 236-183 to pass legislation to repeal the Fund on April 13. Fortunately, the bill is unlikely to pass the Senate and the President is on record as stating he will oppose legislation to eliminate the Fund.

NACCHO and ASTHO sent joint letters to the Energy and Commerce Committee and the full House opposing this legislation prior to the vote. NACCHO is also prioritizing continuation of the Fund in our Hill visits with appropriations staff and is also an active member of a broad coalition advocating for the Fund.  

State Insurance Exchanges:  On May 3rd, the House voted 238-183 to pass H.R. 1213 to repeal mandatory funding provided to states to establish state health insurance exchanges.  The exchanges are a centerpiece of the ACA to expand access to insurance for individual and the small group market. The bill is not expected to pass in the Senate.

School-Based Clinics:  On May 3rd, the House voted 235-191, to pass H.R. 1214 to repeal mandatory funding for school-based health centers established in the ACA.  The bill is not expected to pass the Senate.

Medicaid:  Attention is now turning to altering the Medicaid program prior to the eligibility expansion to 133 percent of the federal poverty level in 2014. On May 4, Senator Orrin Hatch (R-UT) and Representatives Phil Gingrey (R-GA) and Cathy Mc Morris Rodgers (R-WA) introduced bills, S. 868 and H.R. 1683, to eliminate the maintenance of effort (MOE) requirements for state Medicaid programs established in the ACA.  The ACA requires that states maintain their current eligibility standards for Medicaid and the Children's Health Insurance Program (CHIP) through January 2014 for individuals who would have been eligible for either program as of March 23, 2010. Some Governors have been seeking for a waiver of MOE given to allow them flexibility in addressing their budget deficits.

In addition to waiving MOE, block granting Medicaid as included in the House passed budget resolution and budget caps that will force cuts to Medicaid are under consideration by Congress. The National Association of Counties has come out strongly in opposition to block granting Medicaid, participating in a press conference with Senator Jay Rockefeller (D-WV) on May 4.

PAHPA Reauthorization

The Pandemic and All-Hazards Preparedness Act (PAHPA), the law that authorizes the Public Health Emergency Preparedness Cooperative Agreements, is up for reauthorization this year.  The author of the 2006 law, Senator Richard Burr (R-NC), is working with Health, Education, Labor, and Pensions (HELP) Chairman Tom Harkin (D-IA) and Ranking Member Mike Enzi (R-WY) to draft reauthorization legislation. The Senators have a short time-line with the hope that legislation is signed into law by October 1. The HELP Committee is expected to hold a hearing on PAHPA on May 17th. There is significant concern that this legislation could get caught up in ACA politicking on the Senate and House floor.

NACCHO staff have met with HELP Committee staff drafting the bill to share our recommendations for PAHPA reauthorization and will be meeting in coming weeks with staff to all members of the HELP Committee on PAHPA reauthorization. NACCHO is also working with its national partner organizations and have shared a consensus position with Committee staff.