January 30, 2007

Final FY 2007 CR Filed
House Appropriations Committee Chairman Obey has filed a continuing resolution (CR) providing $463.5 billion for programs contained in nine FY 2007 appropriations bills (Defense and Homeland Security were completed). H.J. Res. 20 funds most programs at FY 2006 levels; however $10 billion in savings was generated by cutting about 60 programs below their FY 2006 levels and by rescinding some unobligated balances. Additional funding is provided in other areas. Some of the significant changes are listed below.

 

Health

  • Ryan White grants increase by $75.8 million to the authorized level of $1.2 billion.
  • Community health centers are increased by $206.9 million, to $1.9 billion.

 

Education

  • Pell grants increase by $615.4 million to $13.6 billion; the maximum grant increases by $260, to $4,310.
  • IDEA Part B state grants increase by $200 million, to $10.7 billion.
  • Title I grants increase by $125 million, to $12.8 billion.
  • Head Start increases by $103.7 million, to $6.9 billion.
  • A new Title I School Improvement Fund is funded at $125 million to assist schools not meeting adequate yearly progress under No Child Left Behind.

 

Transportation

  • The federal-aid highway program is funded at the level guaranteed in SAFETEA-LU; the obligation limitation for FY 2007 is $39.1 billion, $3.5 billion more than the FY 2006 enacted level.
  • Mass transit funding guarantees increase by $470 million, to $8.97 billion.
  • Amtrak is provided $1.294 billion.

 

Law Enforcement

  • Byrne Justice Assistance grants are increased by $109 million, to $520 million.
  • Community Oriented Policing Services are increased by $70 million, to $542 million.

 

Environment

  • The Clean Water State Revolving Fund is increased by $197.1 million, to $1 billion.

 

A summary of H.J. Res 20 is available online, as well as the text of the measure. The House is scheduled to address H.J. Res. 20 tomorrow under a closed rule that allows for no amendments. The current CR expires on Thursday, February 15.

 

January 26, 2007

HHS Awards Transformation Grants

 

The following states were awarded $103 million in the first round of Medicaid transformation grant funding:  Alabama, Arizona, Arkansas, Connecticut, Florida, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, New Jersey, New Mexico, New York, North Dakota, Rhode Island, Tennessee, Texas, Utah, West Virginia, Wisconsin and the District of Columbia.  A second round of $47 million will be awarded later this year. The press release can be found here.

January 25, 2007

Katrina FMAP Released

As expected, the Department of Health and Human Services has released an adjusted FMAP to account for the income and population effects of Hurricane Katrina. The adjusted FMAP applies only to Texas. Today's announcement in the Federal Register can be found here.

January 24, 2007

Proposals Featured in State of the Union Address

 

In yesterday's State of the Union address, the president proposed health care coverage expansion, energy production and immigration reform, as well as extending "No Child Left Behind."

 

The president outlined two major health care initiatives. One would allow states to use uncompensated care funds currently being paid to hospitals and redirect them to helping low-income persons buy health insurance. The administration would award grants and additional flexibility to states to help reduce the number of uninsured individuals. While the administration has said that these grants would not require new federal spending, they would likely be funded by converting Medicare and Medicaid Disproportionate Share Hospital (DSH) payments into grants to states. The details of the proposal have not been finalized.

 

The second proposal would change the way health care benefits are taxed, with the goals of providing incentives for the uninsured to purchase insurance and discouraging rich benefit packages. The proposal would give a standard deduction of $7,500 to individuals and $15,000 to families for the purchase of health insurance. Health benefit packages worth more than the deduction would become taxable. This proposal would be revenue-neutral over 10 years, but could be costly at its onset.

 

Federal Poverty Levels Announced

 

The 2007 federal poverty levels (FPL) are on display at the Federal Register. They will be used by states and the Social Security Administration to determine the Medicare Part D low-income subsidy. The new FPLs can be found here.

 

January 19, 2007

House Passes Energy Tax Bill

 

Last night the House passed H.R. 6, the Creating Long-Term Energy Alternatives for the Nation (CLEAN) Act of 2007. H.R. 6 repeals tax breaks enacted in 2004 by raising the corporate tax rate for domestic fossil fuel manufacturers from 32% back to 35%, and reduces tax benefits companies receive for the cost of domestic oil exploration. It also restores royalty fees for companies that hold leases for deep-water drilling in the Gulf of Mexico and creates a penalty for companies that refuse to surrender their royalty-free leases. The bill repeals additional royalty relief for fossil fuels produced from ultra-deep wells in the Outer Continental Shelf and Alaska, and would no longer allow the Secretary of the Interior to modify the terms of oil and gas leases in Alaska's National Petroleum Reserve. The legislation shifts an estimated $13-15 billion from the fossil fuel industry into a reserve fund that would be used to fund alternative and renewable energies. The administration opposes the measure but has not indicated whether it would veto the bill if enacted by the Senate.

 

Senate Passes Ethics Bill

 

The Senate has passed S. 1, its lobbying and ethics reform bill. The measure had been stalled over a proposed amendment providing the president with line-item rescission authority, but it was agreed that the amendment will be considered during next week's minimum wage debate.

 

The Senate approved several amendments, including one to eliminate disclosure requirements for grassroots lobbying, another to strengthen a provision concerning earmarks in conference reports and another to ban spouses from lobbying senators unless they are employed as a lobbyist for at least one year before their spouse's election.

 

Background on the Upcoming Budget Process

 

Click here for a good summary of the federal budget process that is about to get underway for FY 2008.

January 18, 2007

Student Loan Rate Cut Passes House

 

Yesterday, the House passed H.R. 5, which would reduce interest rates on federally subsidized student loans from 6.8% to 3.4% over five years. To cover its cost and comply with pay-go rules, H.R. 5 would reduce subsidies to lenders and student loan industry programs.

 

Senate Committee Approves Tax Package

 

Also yesterday, the Senate Finance Committee approved an $8.3 billion package of small business tax incentives with revenue-raising offsets.

 

January 16, 2007

CMS to Propose New Medicaid Rule

 

The Centers for Medicare and Medicaid Services (CMS) has announced that it will publish a proposed rule in the Federal Register on January 18, 2007, that would limit payments to governmentally operated public providers (CMS-2258-P).

 

According to CMS, the proposed rule would: clarify that entities involved in the financing of the non-federal share of Medicaid payments must be a unit of government; clarify the documentation required to support a certified public expenditure; limit reimbursement for health care providers that are operated by units of government to an amount that does not exceed the provider's cost; require providers to receive and retain the full amount of total computable payments for services furnished under the approved state plan; and make conforming changes to provisions governing the State Child Health Insurance Program (SCHIP). The provisions of this regulation apply to all providers of Medicaid and SCHIP services, except that Medicaid managed care organizations and SCHIP providers are not subject to the cost limit provision of this regulation.  Except as noted above, all Medicaid payments (including disproportionate share hospital payments) made under the authority of the state plan and under Medicaid waiver and demonstration authorities are subject to all provisions of this regulation.

 

The link to this rule is :

http://www.cms.hhs.gov/MedicaidGenInfo/08_MedicaidRegulations.asp

 

House Passes Medicare Negotiation Bill

 

On January 12, the House passed H.R. 4, requiring the secretary of Health and Human Services to negotiate drug prices for the Medicare program. The president has issued a veto threat against the measure.

 

 

January 11, 2007

CMS Announces Solicitation for Health Opportunity Accounts Demonstration

 

 The Centers for Medicare and Medicaid Services (CMS) issued a solicitation for state applications for the Health Opportunity Account Demonstrations, authorized by the Deficit Reduction Act of 2005.  CMS will choose 10 states to demonstrate whether Health Opportunity Accounts, in combination with high deductible insurance plans, is an efficient way to deliver heath care benefits to Medicaid beneficiaries.  The relevant documents can be found at http://66.28.37.71/ff/cms1.pdf, http://66.28.37.71/ff/cms2.pdf and http://66.28.37.71/ff/cms3.pdf.

 

 

No Part D Late Enrollment Penalty for Low-Income Subsidy-Eligible Beneficiaries

 

The Centers for Medicare & Medicaid Services (CMS) announced the elimination of the 2007 late enrollment penalty for any beneficiary eligible for the low-income subsidy for a Part D plan even if the beneficiary failed to sign up by the program’s initial deadline.

 

Generally, Medicare beneficiaries who are qualified to join a Medicare prescription drug plan, but choose not to enroll during their initial enrollment period, may be subject to a late enrollment penalty (LEP).  The LEP was intended to encourage Medicare beneficiaries to sign up for the drug coverage plan when they first become eligible, but may cause some low-income beneficiaries to avoid seeking drug coverage.

 

Under the initiative announced today, certain low-income Medicare beneficiaries can enroll in a Medicare prescription drug plan with no penalty through December 31, 2007. 

 

The press can be found at http://66.28.37.71/ff/partdpressrelease.pdf.

 

 

House Passes Bill to Increase Minimum Wage

 

Yesterday, the House passed a bill to increase the federal minimum wage from $5.15 to $7.25 per hour over two years (H.R. 2).

 

The Senate Finance Committee held a hearing yesterday on the minimum wage hike. Senator Baucus presented a $10 billion "tentative" package of small business tax incentives that he plans to attach to the bill, including proposals to make permanent the work opportunity tax credit, accelerate depreciation for new construction of restaurants, extend Section 179 expensing limits for small businesses and increase the flexibility for business to use the cash method of accounting for inventory.

 

Senate Proposal Adds Disaster Relief to Farm Bill

 

Senators Byron Dorgan and Kent Conrad introduced S. 195, which would add a disaster relief section to the farm bill that is up for reauthorization later this year. The senators led an unsuccessful effort last year to pass a farm aid package estimated to cost $6.5 billion. The new proposal would require mandatory relief when an agricultural disaster is declared. The sponsors did not propose offsets that would be required under the anticipated pay-as-you-go rules.

 

January 10, 2007

House Passes 9/11 Bill

 

Yesterday, the House passed the Implementing the 9/11 Commission Recommendations Act of 2007 (H.R. 1), which includes a provision to change the distribution formula for the homeland security grant program to provide each state a base of 0.25% (0.45% if the state meets certain high-risk criteria). Remaining funds would be distributed based on risk. The measure also would provide grants to state and local governments for purchasing interoperable communications equipment.

 

The Senate's Committee on Homeland Security and Governmental Affairs held a hearing on implementing the 9/11 Commission recommendations.

 

DHS Announces Infrastructure Protection Grants

 

Yesterday, the Department of Homeland Security (DHS) announced $444.7 million in FY 2007 funding for Infrastructure Protection Program grants. DHS plans to award $163.95 million for the Transit Security Grant Program, which provides funding to transit systems in high-risk urban areas to protect critical infrastructure; $201.17 million for the Port Security Grant Program ($7.83 million through the Ferry Security Grant Program); $11.64 million for the Intercity Bus Security Grant Program; $11.64 million for the Trucking Security Program; and $48.5 million for the Buffer Zone Protection Program. Information on the grant programs and awardees can be found on the DHS Web site.

 

January 8, 2007

Ambitious Congressional Agenda Set

 

The House leadership is hoping to pass major legislation in the first 100 hours of the 110th Congress, with floor consideration scheduled on bills to implement recommendations of the 9/11 commission, increase the federal minimum wage, promote stem cell research and allow the government to negotiate lower prices on prescription drugs for Medicare recipients. Last week, the House approved its rules package, which included ethics reform, budget enforcement and earmark disclosure.

 

The Senate is scheduled to consider its lobbying and ethics reform package (S. 1). It now mirrors the bill passed by the Senate during the 109th Congress, but amendments are anticipated that would strengthen gift and travel restrictions. S. 1 also includes changes in legislative procedures to curb special project earmarks.  The Senate also plans to consider an organizational measure that sets committee ratios and staff allocations.

 

DHS Announces Grant Guidance

 

The Department of Homeland Security (DHS) has released FY 2007 grant guidance and application kits for the five state and local homeland security grant programs. They include: $509.3 million for the State Homeland Security Program (SHSP); $746.9 million for the Urban Areas Security Initiative (UASI); $363.8 million for the Law Enforcement Terrorism Prevention Program (LETPP); $32 million for the Metropolitan Medical Response System (MMRS); and $14.6 million for the Citizen Corps Program (CCP). Details are available on the DHS Web site.

January 5, 2007

Appropriations Subcommittees Restructured

 

Two new appropriations subcommittees will be added to the House committee structure (for a total of 12) to bring it into alignment with the Senate Appropriations Committee. The first addition, the Legislative Branch Subcommittee, already exists on the Senate side. The second new subcommittee - Financial Services - will have jurisdiction over the Department of Treasury, the Federal Deposit Insurance Corporation, the District of Columbia and the federal judiciary. The Senate also plans to mirror this subcommittee, which will replace its current District of Columbia Subcommittee.

 

Bill to Implement 9/11 Recommendations Introduced

 

Yesterday, the "Implementing the 9/11 Commission Recommendations Act of 2007" was introduced in the House. The measure would change the distribution formula for the homeland security grant program. Currently, each state is provided a base of 0.75% of the grant funds. The proposal would provide each state with a base of 0.25%  (0.45% if the state meets certain high-risk criteria).  Remaining funds would be distributed based on risk. The House is expected to consider the measure next week.

 

Bill Introduced to Make Internet Tax Ban Permanent

 

Yesterday, senators Ron Wyden, John McCain and John Sununu introduced legislation to make permanent a moratorium on state taxes on Internet access, which expires in November, 2007 (S. 156). The moratorium would apply to all types of Internet access. Senator Sununu has indicated that he would like to see the moratorium expanded to prohibit state tax practices not affected by the current moratorium.

 

R&D Tax Legislation Introduced

 

Senator Max Baucus introduced legislation to make the research and development tax credit permanent and provide tax-exempt bond authority for improving research capabilities (S. 41). It would give tax-exempt bond authority to states, communities and universities seeking to improve research facilities.

 

Senate Bill Would Eliminate AMT

 

Yesterday, the Chairman and Ranking Member of the Senate Finance Committee introduced legislation  to permanently repeal the alternative minimum tax (AMT) (S. 55). The estimated annual cost of repealing the AMT is $60 billion.

January 2, 2007

Medicaid Commission Final Report

 

Click here for a copy of the final report and recommendations of Secretary Leavitt's Medicaid Commission.