Update for Clients and Friends
January 2023
After four years of unified Democratic control in Washington, House Republicans began the new 118th Congress in the majority. Democrats remain the majority party in the Senate and Joe Biden, of course, is still President in the White House. But House Republicans feel energized about advancing their priorities. While there undoubtedly will be significant disagreements between the two parties on major issues, there are several “must-pass” bills that will require some level of cooperation and agreement among the parties in Congress. We also expect the Biden Administration to be very active advancing its priorities through regulatory actions, since congressional Republicans will be in a stronger position to block the most controversial elements of the President’s agenda. So, regardless of the media’s focus on the potential for “gridlock” in Washington, there will be significant opportunities to advance public policy ideas.
Spending Legislation
The last time Congress enacted all appropriations bills on time — that is by the October 1st start of the fiscal year — Bill Clinton (D-AR) was President and Newt Gingrich (R-GA) was Speaker of the House. (And by the way, Bob Livingston was Chairman of the House Appropriations Committee!) Since that time, most final appropriations legislation has been wrapped into large, year-end “omnibus” spending measures, like the one Congress passed last month.
The Consolidated Appropriations Act (Public Law 117-328) was signed into law on December 29, 2022. (Biden Administration issued a statement in favor of the bill, the text of which was published in the Congressional Record as Senate amendment 6552.) The massive, 4,126-page bill allocates $1.7 Trillion to keep the government running while also funding other priorities advanced by congressional leaders and the Administration. The bill increases spending on both domestic discretionary programs and defense programs, $772 billion and $858 billion respectively. It also includes $45 bill in additional assistance for the war in Ukraine, increases funding for childcare, food assistance, mental health and offers more support for veterans. It also includes $38 billion for disaster aid. Notably, the bill also provides over $15 billion for congressionally directed spending, programs sometimes referred to as “earmarks.” It does not include an additional $10 billion that the Biden Administration had requested for its COVID-19 response efforts. The bill will keep the government operating through September 2023.
The appropriations process in Congress in 2023 is expected to kick off with Appropriations Committee hearings starting later this winter. Our sources tell us that the Biden Administration’s “budget request” to Congress will probably not be released before mid-March, though the timing of the release is not certain. While the President’s budget will not be accepted in whole, some parts are likely to end up in final spending legislation, and it will serve as a starting point for debates and negotiations. The congressional Appropriations Committees are still organizing at this point, so the schedule is not yet set. Typically, House appropriations legislation is “marked up” in committee by late Spring, with the Senate lagging behind by a few weeks. But this year, with Republicans in the House calling for significant budget reforms, it is still not clear how the appropriations process will play out.
The Livingston Group reminds its clients and friends that it is important to continue to press forward with legislative priorities regardless of political circumstances. While there currently is uncertainty about how the appropriations process will unfold, there is little doubt that Congress will pass some form of an appropriations bill by the end of the year. As part of this “must-pass” legislation, we will make sure our client’s priorities are in the best position to advance — a process that will necessitate that we work “early and often” with key lawmakers on the Appropriations Committees.
Defense Authorization
Another bill that Congress is virtually certain to pass, despite partisan disagreements, will be the annual national defense authorization act, known colloquially as “NDAA.” This legislation provides the budget and policies that guide the Department of Defense. As we have noted in this update before, NDAA was first passed in 1961 and Congress has approved a version each year since. It is expected that partisan disagreements will play out during the debates and votes surrounding NDAA — including those relating to the size and scope of the Pentagon’s budget, funding for Ukraine, and various social and environmental issues put forward by the Biden Administration. But, since the bill is necessary to provide pay and benefits for military personnel — and because the “national defense” is a clear Constitutional priority of the federal government — lawmakers always seem to find a way to pass the bill, despite political squabbles.
With Republicans now controlling a majority in the House, the House Armed Services Committee will be Chaired by Representative Mike Rogers (R-AL), with former chairman Adam Smith (D-WA) serving as ranking Democratic member. Senator Jack Reed (D-RI) will continue to Chair the Senate Armed Services Committee, while Senator Roger Wicker (R-MS) is expected to be officially named the new ranking Republican in the coming days.
The Livingston Group boasts a strong defense practice with excellent connections to key military policymakers on and off Capitol Hill. We have a long background of success for our defense-related clients and expect to be extremely active in this area again in the 118th Congress.
Health Issues
Lawmakers on both sides of the political aisle will continue to work on health issues, with the Biden Administration and congressional Democrats looking to promote legislative priorities that will likely have a difficult time advancing with Republicans controlling the House. As a result, the White House will press the Department of Health and Human Services to advance a robust regulatory agenda to implement health policies enacted last year when the Democrats had unified control. In 2022, Congress approved several changes to Medicare as part of the Inflation Reduction Act (IRA) (Public Law 117-169), including Medicare price negotiations for Part D covered prescription drugs. (Medicare price negotiation is strongly opposed by the pharmaceutical industry, as well as many Republicans, who argue it will reduce future innovations in medicine.) The IRA also reduced Medicare cost sharing for insulin, eliminated cost sharing for certain vaccines, and will change co-insurance requirements for drugs covered under the traditional “Part B” section of Medicare. All these issues will be part of the HHS regulatory agenda moving forward.
In addition, the Administration will consider when and how to wind down the COVID-19 Public Health Emergency (PHE), which was recently extended through mid-April. Many believe the White House will want the PHE to expire this Spring. An end to the PHE will likely mean distribution and coverage for COVID vaccines and treatments will shift from the public to the private sector. Certain other health care authorities were also granted under the PHE, like the use of telehealth in Medicare, but the just-passed omnibus appropriations extended that benefit for an additional two years. In an interesting juxtaposition, while an end to the PHE is being actively considered, the Administration also continues to press for increased vaccination uptake, especially as new COVID subvariants emerge and spread.
Meanwhile, Republicans in Congress will be pressing for major health spending reforms to help reign in budget deficits. This will mean that Medicare, Medicaid, and other federal health “entitlements” will receive significant scrutiny. Many House Republicans are already demanding significant savings from these and other government programs in return for their support for an extension of the federal “debt ceiling.” This fraught debate is expected to come to a head this summer.
In addition, new House GOP committee chairs are planning aggressive oversight of many Biden Administration’s health policies. Public hearings are expected on the Administration’s handling of billions of dollars of COVID relief funds, the actions of government health agencies during the pandemic and the origins of COVID.
There are also several health-related laws set to expire this year that Congress will want to reauthorize. Among these is the Pandemic and All-Hazards Preparedness Act (PAHPA), which establishes policies to improve public health preparedness and response for emergencies, “whether deliberate, accidental, or natural.” Also due for renewal will be two FDA user fee programs for animal drugs. While these programs deal with veterinarian medicines, they could serve as a legislative vehicles for unrelated FDA policies that lawmakers may want to advance.
These and other health issues will be taken up by the House Energy & Commerce Committee, which will have a new Chair in Representative Cathy McMorris Rodgers (R-WA). In the Senate, the Health, Education, Labor and Pensions (HELP) Committee has jurisdiction over many health issues, including those run by the FDA. That panel will also have a new Chairman, Senator Bernie Sanders (I-VT), whose disdain for private sector health entities is well known.
Other committees with health care jurisdiction are the House Ways and Means Committee, which will be chaired by Representative Jason Smith (R-MO). This committee shares jurisdiction with the Energy & Commerce Committee over Medicare, but has sole jurisdiction over the “Part A”, or hospital, part of Medicare. It also deals with ERISA health plans, while both committees deal with the Medicare Part D drug benefit and the Affordable Care Act (aka, “Obamacare.”) The Energy and Commerce Committee has sole jurisdiction over public health programs.
In the Senate, the Finance Committee deals with Medicare, Medicaid, and most aspects of the Affordable Care Act. It will again be chaired by Senator Ron Wyden (D-OR). Senator Mike Crapo (R-ID) will also return as the ranking GOP member.
The Livingston Group urges its clients and friends to contact us with questions and concerns about this highly changeable healthcare advocacy space.