National Legislative Update for June 2018

June 26, 2018

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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 $159M, run advocacy campaigns and shaped CMS reimbursement for clients.

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This week is a big week for health and defense funding bills as they move through the House and Senate. Last night, I went to a small dinner event with Majority Whip Steve Scalise (R-LA) and heard him describe his frustration with trying to pass an immigration bill as they struggle to pull together enough votes and his excitement about the upcoming elections as he thinks GOP is well-positioned. And last week, I went to a small breakfast event with Senator Roy Blunt (R-MO), who is Chairman of the Labor, Health and Human Services, and Education Appropriations Subcommittee (LHHS), who said the Democrats are expected to pick up the House but the Senate will gain a couple Republican seats. Elections will certainly be interesting this fall.

Budget & Appropriations

Unlike past years, this year the Republican leadership is determined to markup all 12 appropriations bills and send at least a mini-bus through to President Trump this summer so he can easily pass the rest a few months later. On June 25, the Senate passed of HR 5895, the mini-bus appropriations bill, which packages the Energy and Water Development, Military Construction and Veterans Affairs, and the Legislative Branch House bills all together in a form that also previously passed the House and totals $145.64 billion. This week, the Committee will mark up the final two appropriations bills: Defense and LHHS, which will make public their funding priorities and key issues for debate as compared to the House funding levels.

Some highlights in the House LHHS bill include a $1 billion increase in funding for the Department of Health and Human Services from FY18 enacted levels, a $1.3 billion increase for NIH, and a $43 million increase for the Department of Education, but also an $88.8 million cut to the Department of Labor and a $663 million cut to the CDC. The House THUD sees an overall increase of $1.1 billion across its agencies, but an overall cut of about $698 million to the Transportation Department’s discretionary funds while HUD sees an additional $1.8 billion from FY18 levels. The HUD bill includes: $22.8 billion for tenant-based Section 8 vouchers; $7.5 billion for public housing; $11.7 billion for project-based Section 8; $678 million for Housing for the Elderly; and $154 million for Housing for Persons with Disabilities.

Consistent with the National Defense Authorization Act (NDAA) which was approved by the House last month, the Defense bill provides the Department of Defense with $674.6 billion in FY19, which includes $606.5 billion in base discretionary funding – an increase of $17.1 billion above the fiscal year 2018 enacted level – and $68.1 billion in Overseas Contingency Operations (OCO)/Global War on Terrorism (GWOT) funding. The bill contains $92.4 billion total for research, development, testing, and evaluation of new defense systems and technologies, which is an increase of $2.9 billion. The Defense Health Program also sees an increase of about $318 million, with individual research programs seeing increases across the board: $364 million for cancer research, $125 million for traumatic brain injury and psychological health research, and $318 million for sexual assault prevention and response. In the Commerce-Justice-Science bill, NASA would be funded at $21.5 billion, $810 million above the 2018 enacted level, $459 million extra for NASA science programs and an additional $294 million for deep space exploration. The NSF would be funded at $8.2 billion, which is a $408 million increase. Below is a full look of the status of each of the appropriations bills.

 

Budget

Despite the appropriations activity for FY19, Budget Committee Chairman Steve Womack (R-AR) pushed through his committee the “Budget for a Brighter American Future” last week. It is a blueprint to balance the budget over the next nine years by achieving $8.1 trillion in deficit reduction, which would require steep cuts in mandatory spending like Medicare and Medicaid. It sets topline discretionary spending at $1.24 trillion and aims to achieve $302 billion in mandatory savings over 10 years. It passed by a vote of 21-13. The federal government has $21 trillion in debt and counting, with FY19 appropriations showing no real signs of major cuts, especially with major defense spending increases. The CBO has also estimated the new tax law will add about $1.9 trillion to the debt over the next decade. It is still unclear whether or not a Budget Resolution will make it to the floor for a vote anytime soon.

Health

Health Appropriations

The House Labor HHS bill that recently passed the subcommittee sees several increases to a variety of medical research programs, as well as cuts to some key CDC programs. The $108 million teen pregnancy prevention program through the CDC was cut, while Alzheimer’s research sees a $401 million increase, Cancer Moonshot a $100 million increase, the BRAIN initiative a $29 million increase, pediatric cancer a $12.6 million increase, combatting antibiotic resistance a $15 million increase, among other notable programs across the NIH. The bill also proposes to eliminate the CDC’s climate-change program, making up another $10 million cut to the CDC. While the NIH sees significant increases across the board, amounting to about $1.3 billion in additional funding from FY18, it is unclear where the offsets will be made, as it has been provided a flat allocation from FY18 levels at a cap of $177.1 billion overall across the Department of Labor, HHS, and Department of Education. The CDC would see an overall cut of about $663 million.

Other significant increases include to the Substance Abuse and Mental Health Administration (SAMSHA), which would receive $1.75 billion above the budget request in order to provide substance abuse services such as state opioid response grants and substance abuse block grants. HRSA would see an extra $3 million go towards Maternal and Child Health Block Grants. BARDA would get an additional $50 million, the Strategic National Stockpile an additional $100 million, and Project BioShield an additional $70 million (which is for the acquisition of medical countermeasures). The full Appropriations Committee was scheduled to markup the bill last week, but it was cancelled and rescheduled for June 26, but that has been cancelled yet again. The LHHS bill is always one of the most contentious bills so significant negotiating is occurring behind the scenes to move this measure through the chamber.

Medical Device Tax Repeal

AdvaMed expects the House to hold a floor vote on the permanent repeal of the medical device tax with HR 184 in July. After years of receiving temporary suspensions, this will finally end the medical device tax that proved very costly to bioscience companies during the time it was in effect as part of the Affordable Care Act under the previous administration. The House leadership staff have indicated that this bill will likely be part of a larger theme week dedicated to moving legislation that reduces health care costs. Other legislation addressing HIT repeal, for example, will be brought to the floor as well. Then the measure needs to be passed by the Senate before the tax can permanently be eliminated.

Childhood Cancer STAR Act

On May 22, the House passed the most comprehensive childhood cancer legislation ever introduced, sending it to the president’s desk to be signed into law, after the Senate had passed it in March, thanks to the leadership of Energy and Commerce Committee Chairman Greg Walden (R-OR) and Health Subcommittee Chairman Michael C. Burgess, M.D. (R-TX). This bill builds off of the 21st Century Cures Act, providing:

  • Collection of the medical specimens and information of children, adolescents, and young adults with selected cancers that have the least effective treatments to achieve a better understanding of these cancers and the effects of treatment.
  • Reauthorization of the National Childhood Cancer Registry that includes giving the CDC authority to award grants to state cancer registries to improve tracking of childhood cancers.
  • HHS may (1) support pilot programs to develop or study models for monitoring and caring for childhood cancer survivors throughout their lives, (2) establish a task force to develop and test standards for high-quality childhood cancer survivorship care, and (3) carry out a demonstration project to improve care coordination as childhood cancer survivors transition to adult care.
  • HHS must convene a Workforce Development Collaborative on Medical and Psychosocial Care for Pediatric Cancer Survivors.
  • NIH may support research on: (1) outcomes for, and barriers faced by, pediatric cancer survivors within minority or medically underserved populations; and (2) follow-up care for pediatric cancer survivors, including research on the late effects of cancer treatment and long-term complications.
  • GAO (Government Accountability Office) must make recommendations to address barriers to childhood cancer survivors obtaining and paying for adequate medical care.

Opioid Treatment and Prevention

The House just finished passing a package of 58 bills, the largest legislative effort in recent history to address an epidemic that killed 42,000 people in 2016, according to CDC. The CBO predicts that the package would decrease the deficit by $1 billion over 10 years. The bill would provide federal match funds from CMS to those with substance use disorders to obtain treatment and seek housing programs to keep them in safe spaces with necessary facilities to help treat addiction. It would also require the monitoring of specific drugs and their distribution and prescription to ensure no widespread abuse and addresses neonatal abstinence syndrome (NAS), screenings for opioid use disorder history in CMS patients and fentanyl detection grants, and the requirement that medication-assisted treatment be covered by states. It would direct the NIH to develop nonaddictive painkillers and change how prescription pills are distributed to reduce the potential for abuse. In addition, it would require CMS to report to Congress on the coverage status of various opioid-related or pain management non-opioid technologies, would instruct CMS to review and adjust OPPS (Outpatient Prospective Payment System) payments for non-opioid alternatives, and require Part D prescription drug plans to educate beneficiaries on non-opioid alternatives, including technologies. One part of the bill garnering significant attention is called Jessie’s Law, which would require that medical records list a patient’s addiction history to avoid accidentally prescribing opioids to a patient previously addicted. The package also includes new tools giving the Border Patrol and the U.S. Postal Service greater ability to crack down on those who sell or traffic synthetic drugs, and to identify and stop those drugs, particularly the fentanyl, from entering the country.

Although most of these bills passed with bipartisan support, some lacked Democratic support involving the classification of fentanyl as a new controlled substance, the decision to give substance abuse users housing assistance at the expense of other needy persons, such as domestic abuse victims, and the decision to roll back a Medicaid provision that restricts the types of treatment facilities covered because the new language lifts that restriction for opioids addicts alone, rather than repealing it completely for all drug addicts. Meanwhile, the Senate Health, Education, Labor and Pension (HELP) Committee passed a bipartisan bill in April that includes some provisions similar to those passed by the House, redirecting how federal health agencies deal with the crisis.

Nutrition

On June 21, the House passed the farm bill by a vote of 213-211 (with 20 Republicans voting against it along with every Democrat) after a small group of Republicans blocked the bill in May over an unrelated immigration dispute. The current farm bill starts to expire September 30. The $867 billion bill covers nutrition assistance, commodity support, crop insurance, conservation, farm credit, rural development, forestry, horticulture, trade programs and more. The most significant changes in the bill would be to the Supplemental Nutrition Assistance Program (SNAP), which would be subject to expanded work requirements, and conservation programs, some of which would be consolidated. The requirements for those between 15 and 60 years old include registering for work, accepting a job offer, or participating in state-level employment and training programs. Additionally, “able-bodied adults without dependents” (ABAWDs) who are 18 to 49 are required to work or participate in an employment and training program for at least 20 hours a week. If they don’t meet the requirement, they can only receive three months of benefits over three years, which is called the ABAWD time limit. States aren’t required to provide slots in training programs for ABAWDs. States can also request waivers from the time limit for areas with high unemployment or a shortage of jobs. Meanwhile, the Senate voted yesterday 89-3 on a procedural motion for their version of the farm bill that would maintain the structure of the 2014 farm law while preserving a range of programs that are on the verge of running out of money and legalizing the production of industrial hemp. The bipartisan measure does not make the contentious changes to SNAP that are included in the House version. Once this passes the Senate, in July the two chambers will meet in conference committee to hammer out a final version of the bill.

SCIENCE & STEM:

The White House Office of Management and Budget (OMB) released a long-anticipated blueprint outlining over 80 recommendations for reforming, reorganizing, and streamlining the federal government, including R&D and STEM education. It calls for consolidating the Department of Energy’s applied R&D programs into a new “Office of Energy Innovation” and consolidating the administration of “small” federal graduate research fellowship programs into the National Science Foundation. The new plan does not explicitly call for eliminating ARPA–E, but it does state that the agency’s “positive attributes” should be integrated into “DOE’s core energy research.” The plan highlights ongoing efforts at NIH to restructure its administrative functions to “align management with best practices and break down administrative silos through standardization of structures and processes agency-wide” and proposes the consolidation the Agency for Healthcare Research and Quality, National Institute on Occupational Safety and Health, and National Institute on Disability, Independent Living, and Rehabilitation Research. It also recommends merging the Department of Education and Labor Department into a single “Department of Education and the Workforce” (DEW). DEW would encompass four new sub-agencies: K–12 Education; American Workforce and Higher Education Administration (AWHEA); Research, Evaluation, and Administration; and Enforcement. All existing primary and secondary education programs at DOEd would be relocated to K–12 Education, while all of DOEd higher education programs and many of DOL’s workforce development programs would be placed in AWHEA. The administration has already implemented some of the proposals, while others were included in the administration’s FY2019 budget request, date back to previous administrations, or are altogether new. Many of the larger changes will require congressional authorization to implement.

Quantum

On Wednesday, the House Science Committee will meet to consider a bill it made public over the weekend that would create a 10-year National Quantum Initiative. Its goal is to “accelerate development of quantum information science and technology applications in the U.S.” and improve federal coordination for quantum research and technology development. The bill would define primary roles for the National Institute of Standards and Technology (NIST), National Science Foundation (NSF), and Department of Energy, and authorize a total of $255 million annually for quantum R&D across the three agencies over a 5-year period, subject to appropriations. It would also enshrine in law the recently chartered National Science and Technology Council Subcommittee on Quantum Information Sciences, which is meeting this Thursday.

DEFENSE:

NDAA

The NDAA recently was passed with bipartisan support by the House on May 24 and the Senate on June 21. The House version would authorize $92.2 billion in RTD&E base spending and an additional $1.3 in OCO spending and $150 million for joint research and development among DOD, technology companies, and academia. The program would encourage private investment in defense-related technologies and could include establishing a nonprofit organization. The bill would authorize $33.7 billion in base funding for the Defense Health Program, $2.5 million more than requested, which includes a pilot program to minimize opioid exposure and prevent abuse, a pilot program for new methods of treating those with sexual abuse trauma, and the inclusion of free contraception across the DoD under their health insurance.

The Senate version of the NDAA would authorize $639 billion in base defense spending, for such things as buying weapons, ships and aircraft and paying the troops, with an additional $69 billion to fund ongoing conflicts. It would also authorize an increase of more than $600 million above the administration’s request for science, technology and testing programs that includes $75 million for university research. As in the House version, it would support DoD’s access to innovative high-tech small businesses by continuing to streamline procurement practices and permanently authorizing the successful Small Business Innovation Research (SBIR) program and encourage private investment in defense-related technologies. It would authorize the Defense Health Program with $32.5 billion and would increase R&D spending by $1.2 billion. It also included an amendment that would kill the Trump administration’s agreement to allow ZTE to resume business with U.S. suppliers, one of the few times the Republican-led Senate has veered from White House policy. That ZTE provision is not included in the House version of the NDAA. Both bills would support pay raises for all members of the uniformed services.

Defense Appropriations

The House Appropriations Committee passed the Defense bill on June 13. Consistent with the National Defense Authorization Act (NDAA), the House Defense appropriations bill provides the DoD with $674.6 billion in FY19, which includes $606.5 billion in base discretionary funding – an increase of $17.1 billion above the fiscal year 2018 enacted level – and $68.1 billion in Overseas Contingency Operations (OCO)/Global War on Terrorism (GWOT) funding. The bill contains $92.4 billion total for research, development, testing, and evaluation of new defense systems and technologies, which is an increase of $2.9 billion. Specifically, the R&D funding will support the F-35 Joint Strike Fighter; space security programs; nuclear force modernization; continuation of the JSTARS recapitalization program; the Ohio-class submarine replacement; Future Vertical Lift; the Israeli Cooperative Programs; and other activities, including those within the Defense Advanced Research Projects Agency (DARPA). The Defense Health Program also would increase by about $318 million, with individual research programs seeing increases across the board: $364 million for cancer research, $125 million for traumatic brain injury and psychological health research, and $318 million for sexual assault prevention and response.

The Senate Defense appropriations bill gets marked up today. Among key issues is the Lockheed Martin F-35 Joint Strike Fighter program, which has faced some serious issues this year. In the House, the Appropriations Committee decided to fund 93 airplanes next year, a significant boost from the 77 requested by the Pentagon and approved as part of the House’s NDAA. The Senate appropriators will decide to follow in the House’s footsteps or stick with the Pentagon request. The total funding levels match the House so policy questions are of more interest for today’s markup, after which details on the bill and report will be released.

 

 

IMMIGRATION:

When the farm bill failed the first time, the House leaders promised House Freedom Caucus members a vote on an immigration bill sponsored by Rep. Bob Goodlatte to secure their support for farm legislation, but the Goodlatte bill was just voted down the end of last week. The House and Senate have been stuck in a stalemate while President Trump works to end his policy of separating children from their families as they cross the southern border via an executive order after facing tough criticism across the country for what is now more than 2,000 immigrant children separated from their families and placed in federal custody. The House was set to vote on two immigration bills that applied a more conservative approach, but neither received enough support among the Republicans to advance that far. Today the GOP announced a modified version they are sending to the floor. In a bid to attract more support, lawmakers decided last week to delay the vote and add two provisions to the legislation designed to be a compromise between conservative and moderate Republicans. The new version would include a requirement for employers to electronically check the immigration status of workers, as well as an overhaul of the guest worker program that allows businesses, especially in construction, agriculture and service industries, to hire foreigners. Even though support is growing Speaker Ryan (R-WI) has been downplaying its chances of passage this Wednesday.

The two versions of the bill differ in a few ways. The more conservative version would replace the H-2A visa for agricultural workers with a H-2C visa, which would qualify more year-round employers but lower the wages for foreign workers, and it would also disallow federal grant funds from sanctuary cities while increasing penalties for illegal entry. The compromise plan omits those regulations and would offer more types of status to those at the border, including longer periods of time permitted to leave the U.S. and come back, increasing DACA eligibility, increases renewable terms from 3 years to 6 years, and green card eligibility 5 years after receiving status, focusing on the ultimate goal of increasing the pathways to citizenship. Both plans provide similar amounts of funds for border control and both would keep families together.

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

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