National Legislative Update for July 2017

July 10, 2017

G2G 400

The Legislative Update is brought to us by Liz Powell, Esq., MPH, Founder of G2G. Liz is an attorney with 20 years government experience, including as Legislative Director on Capitol Hill. She leads a team of bipartisan professionals that has raised over $50M, run advocacy campaigns and shaped CMS reimbursement for clients.

Contributor-LPowell

Below is our Legislative Update. There are many details on appropriations and the healthcare legislation so scan through what is of most interest to you. Congress only has 13 days to resolve a lot of issues when they return this week. It should be interesting and we will keep you posted! Also, looking forward to seeing many of you at our 10th Anniversary Celebration on Wednesday, July 19th from 4-8pm at Nighttown in Cleveland!

LEGISLATIVE UPDATE

Overview

The week before recess, Congress marked up and passed several pieces of legislation out of the Appropriations and Armed Services committees to gear up for a busy July through September of floor activity. The House Appropriations Committee is now more than halfway through its work for FY2018 but still has not revealed the topline funding levels for each of the 12 bills. However, G2G met with a handful of GOP Members before the recess and heard Defense topline is $621.5 billion and domestic funding topline is $511 billion. Democrats have criticized this delay in what is called 302(b) allocations as a colossal departure from regular order that is detrimental to the process. But House Budget Committee Chair Diane Black (R-TN) is aiming to markup the Budget Resolution next week if she can overcome the current debates over about $150-$700 billion worth of cuts. As usual, the conservative Freedom Caucus wants more cuts and moderates want less, and intense in-fighting remains over how much to reduce mandatory spending and how to set up an overhaul of the tax code through the budget reconciliation process. She expects the Budget Resolution will cut 1% of mandatory spending during the 10-year budget window, which represents a $339 billion cut over the next 10 years, when the Congressional Budget Office’s projected mandatory outlay of $33.9 trillion for 2018 to 2027 is used.

Also, top of mind the week before recess was the Obamacare repeal and replace effort. While significant anticipation for passage of the Senate’s version of the bill consumed the halls of Congress and media, the GOP fell short of the necessary votes. Over the past week, Majority Leader Mitch McConnell (R-KY) and some moderate senators, such as Murkowski (R-AK), Portman (R-OH), Collins (R-ME) and Moore Capito (R-WV), have acknowledged that to move forward with any healthcare fix, Republicans and Democrats must work together to produce a bipartisan solution to shore up the insurance markets’ crumbling under Obamacare. Moreover, without the healthcare repeal and replace reconciliation package, tax reform remains an elusive promise that may never happen, as does a huge infrastructure bill and other initiatives promised during the 2016 campaign season. The biggest challenge is lack of time — once Congress returns on July 11th, they have just 13 days until they take a 5-week recess to get this done.

Budget & Appropriations

The FY2018 appropriations deadline of September 30th is looming and the House and Senate continue to produce their spending proposals without top-line spending amounts set. Chairman Frelinghuysen (R-NJ) has released seven individual spending bills, three of which were passed by the full committee before the recess: Legislative Branch, Military Construction & VA, and Defense Appropriations bills at the Committee level, and the Senate is ramping up to start deliberating their first bill in July.

Appropriations Bills:

  • Agriculture: House—Markup 7/12 in subcommittee
  • Commerce/Justice/Science: House—Markup 6/29 in subcommittee
  • Defense: House—Passed full committee 6/29
  • Energy and Water: House—Markup 6/28 in subcommittee
  • Financial Services: House—Markup 6/29 in subcommittee
  • Homeland Security: House—Markup 7/12
  • Interior and Environment: House—Markup 7/12
  • Labor/HHS/Education—No markup scheduled yet
  • Legislative Branch: House—Passed full Committee 6/29
  • Military Construction & Veterans Affairs: House—Passed full Committee 6/15; Senate—Markup 7/12 in subcommittee
  • State and Foreign Operations—No markup scheduled yet
  • Transportation/HUD: House—Markup 7/11

Defense and Veterans

National Defense Authorization Act (NDAA)

Both the House and Senate committees acted on the NDAA in June. On policy, the biggest difference is the House plan for a Space Corps, which it split off as an independent service from the Air Force. On personnel, the Senate would add 7,000 troops across the services, while the House would add almost 20,000, an expensive difference as well as a steep challenge for recruiters. The Senate wants a few more F-35 and F/A-18 fighters — Senate Chairman John McCain (R-AZ) is a former fighter pilot and always prioritizes jet fighters — but the House wants more Littoral Combat Ships, which McCain generally opposes, as do many old-school Navy officers. Finally, another big difference is regarding MTEC and DIUx—the Senate supports the increased use of OTAs like MTEC and DIUx, but the House does not. The House NDAA requests DIUx prove its success by providing Congress with measurable goals and reporting.

House—The NDAA passed the House Armed Services Committee almost unanimously with a 60-1 vote, authorizing $696.5 billion in defense spending for 2018—$38.4 billion above what the House Defense Appropriations subcommittee included in their Defense Appropriations bill (see below). It authorizes more ships, planes, troops, and tanks than requested by the President with $7.9 billion for Aviation Readiness, $5.9 billion for increased Naval presence, $5.7 billion for Ground Forces, $2.3 billion for facilities maintenance, and $2.5 billion for Missile Defense. Additionally, the NDAA would increase funding for facilities restoration and modernization by $1.4 billion for infrastructure, ranging from barracks to hangars to runways to hospitals. Among several amendments offered by Democrats, the NDAA includes an amendment prohibiting funding for a border wall. The NDAA also includes $21 billion worth of the $31 billion weapons programs defunded by the President’s request. The NDAA also authorizes a higher pay raise for personnel of 2.4%. Finally, Chairman Thornberry has taken the lead on acquisition reform over the past couple of years and the FY18 NDAA includes the third installment of this effort. The first of the major reform elements is to add oversight to service contracts since over half of spending goes to services on everything from lawn mowing on bases to maintaining equipment to hiring specialized experts. From now on, DoD would be required to provide more specificity in the funding requests for service contracts in the House NDAA. The second reform would improve the way the Pentagon buys commercial-off-the-shelf goods, ranging from bottled water to treadmills or even MRI machines. Today, DoD has two options for purchases: the DoD contracting process or the General Services Administration (GSA) schedule at the prices set there so DoD is rarely able to buy off-the-shelf items quickly and at a reasonable price. The House NDAA would allow the DoD to use online commercial sites like Amazon, Staples, or Grainger just as businesses do and improve the contract auditing process by shifting 25% of auditing to the private sector.

Senate—The Senate Armed Services Committee completed markup on their version of the NDAA on June 28th that totals $700 billion: $640 billion in baseline funding and $60 billion in Overseas Contingency Operations (OCO), which is not required to follow budget caps—just above the House’s NDAA of $696.5 billion. The Senate version begins to move some non-war related programs from OCO to the base line account in order to restore the OCO to its intended purpose. To overhaul the Pentagon’s top-level management and streamline the chain of command, the Senate NDAA would reduce the number of Deputy Assistant Secretaries of Defense by 20%, reduce the number of authorized Senior Executive Service personnel in the DOD by 10%, and remove one assistant secretary from each military department. It authorizes $33.7 billion for the Defense Health Program, $8.5 billion for space requirements, and fully funds DARPA at the administration’s request level. It also would put a strong emphasis on acquisition reform to make private-public collaboration easier, while following suit with the House’s version to increase vehicles and weapons procurement in every branch.

House Defense Appropriations for FY18

The Defense Appropriations bill passed in the House Appropriations committee on June 29th that would fund the DoD with $658.1 billion, which includes $584.2 billion in discretionary spending—a $68.1 billion increase above the FY2017 enacted level and an $18.4 billion increase above President Trump’s budget. Under the current Budget Control Act, Defense spending cannot exceed $549 billion in FY18. The Senate and the House version of the NDAAs, which authorize defense spending before they are officially appropriated each year, both exceed that cap at $621 and $640 billion, respectively. The House FY18 Appropriations bill would also provide $73.9 billion in OCO, which is not subject to budget caps—just shy of the House’s NDAA authorizing level of $75 billion and significantly above the Senate’s authorized level of $60 billion. If Congress appropriates more military funding than allowed under the caps, sequestration would kick in. For the Pentagon that would mean a 13% automatic cut across all accounts or Congress must lift the budget caps or significantly pare down FY18 appropriations for Defense.

Also, the Approps bill instructs the DoD to prioritize the following research areas: cancer and medical research, alternatives to opioids, drug abuse/illegal supply prevention, and technological innovation in combat warfare and aviation materials. The catchall line that funds non-congressionally directed defense medical research would be funded at $627 million. The bill would also provide $282 million for cancer research, $125 million for TBI and psychological health research, and $277 million for sexual assault prevention and response. Specifically:

  • Cancer Research
    • Congress urges the DoD to prioritize the expansion of peer-reviewed cancer research focused on military populations—$120,000,000 for breast cancer, $90,000,000 for the prostate cancer, $20,000,000 for ovarian cancer, $10,000,000 for kidney cancer, $12,000,000 for lung cancer, and $30,000,000 for remaining cancer research programs in the following areas: bladder cancer, brain cancer, colorectal cancer, listeria-based regimens for cancer, liver cancer, lymphoma, melanoma and other skin cancers, mesothelioma, pancreatic cancer, and stomach cancer.
  • Ocular Repair and Vision Restoration
    • The House recognizes the importance of increased research towards ocular trauma and vision restoration in the military and encourages the DoD to evaluate the effectiveness and safety of transcorneal electrical stimulation to improve visual function after ocular trauma and to investigate mRNA therapeutics.
  • Drug Abuse and Interdiction
    • Congress is particularly concerned with combatting the high rate of opioid abuse among service members and is recommending $854,814,000 in base funding for Drug Interdiction and Counter-Drug Activities, which is a $64 million increase above the President’s budget request. The Committee also recommends $196 million in additional funds for Overseas Contingency Operations associated with this program, which would put the total appropriations at $1,015,114,000, or $52 million above last year’s appropriations. Other priorities include:
      • Ensuring compliance with pain medicine prescribing guidelines
      • Prioritizing abuse-deterrent formulations of prescription opioids through TRICARE formularies
      • Researching pain-relieving activities without the use of addictive pain medication
      • Continuing to deliver tele-behavioral health services to service members
  • STEM Innovation and Defense-wide Research and Development
    • The bill contains $84.3 billion – $82.7 billion for base requirements and $1.6 billion for OCO requirements – for research, development, testing, and evaluation (RTD&E) of new defense technologies. This is a $10.3 billion increase from the FY17 level.
    • RTD&E funding will support research and development of: the F-35 Joint Strike Fighter; space security programs; the new Air Force bomber program; a next-generation JSTARS aircraft; the Ohio-class submarine replacement; Future Vertical Lift; the Israeli Cooperative Programs; aircraft light-weighting research, and Defense Advanced Research Projects Agency (DARPA) programs, among others.

Innovation: Science, Education & High-Tech

Modernizing Government Technology Act

The House passed the Modernizing Government Technology Act (MGT Act) on May 17th, and it now awaits consideration in the Senate. This bill aims to solve a constant problem: the government is behind when it comes to modern technology and IT infrastructure. Introduced by Rep. Will Hurd (R-TX), it will enable the introduction of cutting-edge technology into our workforce, increase efficiency and decrease cost. Right now, 75-80% of the federal IT budget is spent on operations and maintenance, with little left for innovation and modernization. The MGT Act would allow agencies to invest the money saved through IT efficiencies coming into working capital funds, which would be accessible for up to three years and would go towards modernizing their technologies. It would also create a $250 million fund, managed by the General Services Administration and overseen by the Office of Management and Budget, which agencies can tap into for modernization projects. Projects eligible for use of the funds would address cybersecurity challenges, can easily shift to shared services (such as the Cloud), and have cost reduction components.

Health

Prevention Fund Elimination Impact: State-by-State Analysis

Both the House and Senate healthcare plans include the defunding of the Prevention Fund originally created by the ACA. Senate Health, Education, Labor and Pension (HELP) committee Ranking Member Patty Murray (D-WA) recently released a report that analyzes how each state will be affected in the absence of the ACA’s Prevention Fund. In the next G2G Ohio Legislative Update, we include this analysis. Generally, the Prevention Fund has been used for:

  • The Preventive Health and Health Services (PHHS) Block Grant to monitor and prevent infectious disease outbreaks, train emergency medical service providers, collect vital statistics, provide fluoride for local water systems, etc.
  • Response to the opioid epidemic—several states use funds from the PHHS Block Grant to support prescription drug monitoring programs, establish drug disposal guidelines, implement prevention and education efforts, and hire and train staff.
  • Preparedness for public health emergencies, including support for states to improve their ability to detect and respond to recent outbreaks, including Zika virus, influenza, foodborne illness, and the 2012 fungal meningitis outbreak. It also funds the CDC’s antibiotic resistance work.
  • Increased access to immunizations through grants, which have prevented 322 million illnesses, 21 million hospitalizations, and 732,000 deaths from 1994-2013.
  • Prevention of chronic disease, including reducing tobacco use, increasing physical activity, improving access to good nutrition, and providing $72 million for diabetes prevention efforts.

Obamacare (ACA) Repeal and Replacement

As mentioned, the Senate had hoped to vote on their recently released “Better Care Reconciliation Act” before the July 4th recess, but GOP leadership is now saying they won’t start moving on the bill until July 17th at the earliest. Senate Majority Leader Mitch McConnell (R-KY) is concerned about an imploding health insurance market so stressed that inaction on healthcare legislation is not an option. After much deliberation among moderate Republican senators, leadership is now planning to include opioid-related funding, health savings accounts to pay for insurance premiums, and potentially some taxes on the wealthy remaining to pay for more generous benefits. While conservative Senators Mike Lee (R-UT) and Ted Cruz (R-TX) released the Consumer Freedom Act on July 5th that would cut many of the Obamacare regulations and provide bare-bones plans as long as insurers also sell plans that allow for pre-existing conditions and other requirements, it is unlikely to go anywhere. The moderate senators are now taking control and beginning to reach across the aisle to some moderate Democrats so many insiders now expect a moderate approach to prevail. Below is a list of GOP hold-outs and their requirements:

  • Lisa Murkowski (AK): Planned Parenthood must be funded, no cuts to Medicaid, and no threat of removing the pre-existing conditions regulation.
  • Rand Paul (KY): Wants a full repeal of Obamacare and rejects continuous coverage provision and the 4-year stabilization fund and cost-sharing subsidies.
  • Mike Lee (UT): Wants a state opt-out from community rating requirements, wants to eliminate nearly all the consumer protection regulations in Obamacare, and wants an option for unregulated plans for insurance companies that comply with Obamacare.
  • Bill Cassidy (LA): He and Senator Susan Collins (ME) released their own, largely ignored amendment that uses the “Jimmy Kimmel” test to ensure no family be denied medical care because they cannot afford it.
  • Rob Portman (OH): Wants the bill’s $2 million opioid epidemic funding to be increased to $45 million and a 7-year Medicaid expansion phase-out instead of the proposed 3-year plan.
  • Susan Collins (ME): Wants to reinstate the Obamacare 3.7% tax on the wealthy, refuses cuts to Medicaid affecting rural Maine hospitals, and requires Planned Parenthood funding.
  • Dean Heller (NV): Opposes reduced subsidies and cuts to Medicaid, and is the strongest opposition to this bill.

FDA Appropriations

The FDA is funded through the Department of Agriculture’s spending account, and the House’s recently introduced bill maintains funding at current levels despite President Trump’s proposed cuts to FDA. Notoriously underfunded and understaffed, the FDA has bipartisan friends in the House protecting it and ensuring the 21st Century Cures Act funding levels remain intact. The House Appropriations bill increases President Trump’s budget request from $1.88 billion to $2.76 billion. When you include revenue generated by user fees, the total allotment would reach $5.2 billion or more, an overall increase from FY2017. While the FDA came out unscathed from the plan, the bill totals $20 billion in discretionary funding, which is $876 million lower than last year, but still $4.64 billion above the President’s budget.  The bill provides $6.15 billion in discretionary funding for WIC, which is $200 million below last year and the same as the President’s request, among other cuts. For more on FDA, see G2G’s FDA User Fee Reauthorization Report below the GBG Report.

Economic Development

SNAP/EBT

In the 2014 farm bill, Congress authorized a pilot program to bring SNAP into the 21st century that included 10 projects designed to allow some SNAP customers to use their electronic benefit transfer (EBT) cards with online retailers. The USDA announced this January that Amazon is one of these pilot participants so it rolled out a special 45% discount for Amazon Prime membership for anyone using the EBT card. SNAP spending estimates show savings well above the estimated projected spending in the pre-FY14 farm bill CBO score: between FY14 and 18, the SNAP will cost about $359 billion, or nearly $32 billion less than originally estimated by the CBO just before the 2014 farm bill was passed.

Presidential Appointees

  • FBI Director—Christopher Wray is scheduled to testify before the Senate Judiciary Committee on July 12. Wray is a former Justice Department official and is most known for representing Governor Chris Christie during the NJ “Bridgegate” scandal.
  • CDC Director— Secretary Tom Price has chosen Commissioner of Georgia Department of Public Health and OB-GYN, Brenda Fitzgerald to be the new CDC Director. This position does not require Senate confirmation.

Stay connected for more updates here on our blog, at G2G’s website and on twitter – @G2GConsulting and @BioOhio

G2G (Government to Growth Consulting), LLC is a consulting firm specializing in assisting businesses and non-profit organizations. G2G provides comprehensive consultation in the fields of government affairs, economic development, grant writing, public relations, and event planning. G2G also has extensive experience in the areas of lobbying, advocacy, fundraising and grassroots organizing.