Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


FY 2011 Spending Impasse Overcome

After several meetings in the White House last week, in an attempt by President Obama to encourage Senate Majority Leader Harry Reid and House Speaker John Boehner to reach an accord to finalize a continuing resolution for the remainder of FY 2011, the budget showdown continued until the last minute Friday night, when spending under the last CR would end.  Before the midnight deadline, Speaker Boehner said he and his Republican caucus had no intent to shut the government down and that is why the House on Thursday passed and sent to the Senate H.R. 1363, a new CR which would fund the military through September and the remainder of the government though April 15th.  The bill also includes another $12 billion in spending cuts over the interim period.  He said, while at that time there was no agreement on the final spending level, almost all of the decisions on policy rider issues had been resolved. 

After Boehner’s statement, however, Senate Majority Leader Harry Reid delivered his ultimatum from the Senate Democrat caucus that, while a final spending cut of $78 billion over the President’s budget had been agreed to during a Thursday meeting in the White House, the Senate would make it crystal clear that a shutdown would be due to the refusal of House Republicans to jettison their rider defunding women’s health clinics.  Senator Reid also said the Senate would not agree to the new House CR which would also block federal and local abortion funding in the District of Columbia even though it would fund the military. 

Left unsaid during the exchange of barbed comments was any statement of the existence of a final agreement on the particular program spending cuts that would flesh out the overall $78 billion target.  Republicans were said to resist various mandatory spending cuts proposed by the Democrats, probably because the House would rather have the cuts come solely from discretionary spending levels in order to reduce the spending baseline to be used by CBO in evaluating the FY 2012 Ryan budget proposal.  The White House said that initiatives to implement a partial federal shutdown would affect health agencies in various ways.  While “essential” employees would have to report to work, most “non-essential” parts of HHS would close.  For example:

  • clinical trials already underway in NIH would continue, but new patients would not be accepted;
  • Medicare provider payments would likely continue through May, subject to sufficient funds in the Medicare trust funds;
  • VA medical facilities would remain open; and
  • FDA review of new drugs would stop while FDA drug import inspections would continue. 

HHS announced that PPACA implementation would continue, but that “non-essential” employees who may be involved in writing regulations could be furloughed.  While stating he would veto the latest House CR, the President indicated he would sign a CR limited to the few days needed for the House and Senate to pass a CR which reflects a final agreement on federal spending through September.  At the 11th hour that is what transpired.  A few minutes after the deadline both houses agreed to another short-term CR until the end of this week to allow for the House and Senate to meet their internal procedural rules on passage of the final agreement.  Reportedly, the total spending cuts under the final agreement will amount to about $38.5 billion, short of the $61 billion under H.R.1.  Acceding to Senate Democrats and the President, the House agreed to $17.8 billion in mandatory spending cuts.  The 340-70 vote on the one-week CR shows that there remains some displeasure over the compromise among Republican fiscal hawks.

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