FY 2014 Spending Bills and Debt Limit Increase Expected to Take Center Stage in the New Year

Congress returns this week with only a few days to pass appropriations measures or a continuing resolution, consistent with the end-of-year budget agreement, before January 16th, when temporary funding for the government under the current continuing resolution expires.  The two appropriations bills that fund the vast majority of disability-related programs, the Labor, Health and Human Services, and Education bill (L-HHS-ED) and the Transportation and Housing and Urban Development (T-HUD) bill, may be continued at current spending levels for at least some time because both have recently encountered opposition in Congress.  It will remain to be seen how specific disability-related programs such as supportive housing, special education, and supported employment ultimately fare in 2014.

There is also some concern that the need to raise the debt ceiling again in mid-February to early March may provide another threat to spending programs.  Some Members of Congress may demand further spending cuts as a condition of raising the debt ceiling.

Budget Conference Committee to Hold First Meeting This Week

The special House Senate Budget Conference Committee created by the deal to end the government shutdown and extend the debt ceiling will hold its first meeting on Wednesday. The Committee is charged with coming up with long-term spending plans by December 13. It will seek to find common ground between the FY 2014 House and Senate Budgets that were passed earlier this year, which had starkly different spending and revenue goals. See a comparison of the House and Senate 2014 Budget plans for Medicaid, Social Security, SSI, and other programs at: http://arcinsider.wpengine.com/2013/03/25/house-and-senate-pass-fiscal-year-2014-budget-resolutions/

The 29 members of the Budget Conference Committee are:

House members Senate members
Diane Black (R-TN)
Tom Cole (R-OK)
James Clyburn (D-SC)
Nita Lowey (D-NY)
Tom Price (R-GA)
Paul Ryan (R-WI) – Chair
Chris Van Hollen (D-MD)
Kelly Ayotte (R-NH)
Tammy Baldwin (D-WI)
Michael Crapo (R-ID)
Chris Coons (D-DE)
Mike Enzi (R-WY)
Lindsey Graham (R-SC)
Charles Grassley (R-IA)
Ron Johnson (R-WI)
Tim Kaine (D-VA)
Angus King (I-ME)
Patty Murray (D-WA) – Vice Chair
Jeff Merkely (D-OR)
Rob Portman (R-OH)
Ron Wyden (D-OR)
Bill Nelson (D-FL)
Bernie Sanders (I-VT)
Debbie Stabenow (D-MI)
Jeff Sessions (R-AL)
Pat Toomey (R-PA)
Mark Warner (D-VA)
Sheldon Whitehouse (D-RI)
Roger Wicker (R-MS)

Negotiations on the Government Shutdown and Debt Ceiling Move to the Senate

After discussions between the White House and the House of Representatives failed to end the stalemate over shutting down the government, the Senate met throughout the weekend to develop a plan to end the government shutdown and ensure that the federal government can pay its bills by raising the debt ceiling. The White House, the Senate Majority Leader, and the House Minority Leader have been steadfast that the government must re-open and be able to pay its bills before any negotiations on the broader fiscal issues begin.   Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) appear to be searching for a plan that could gain sufficient support from their respective parties. Among the issues that could be included in a Senate deal are several that are important to the disability community – the spending levels for discretionary programs if the government is reopened (whether at or above the levels of the automatic across-the-board spending cuts); funding for and implementation of the Affordable Care Act; “entitlement reform” including per person caps in Medicaid, means testing in Medicare, and the use of a different measure of inflation (the Chained consumer price index (CPI)) that would result in lower cost of living increases for Social Security and other programs; and revenue increases.   Meanwhile, anxiety is growing in the financial markets over the looming deadline of October 17, the date by which the U.S. is predicted to no longer be able to meet its financial obligations. While there is bi-partisan agreement that failure to act on the debt ceiling would have a disastrous effect on the U.S. economy, the path forward is unclear. If the federal government defaults on its financial obligations, the ability to operate critical lifeline programs such as Medicaid, Medicare, and Social Security would be threatened.   While these programs have been shielded from the worst impact of the federal government shutdown, they are at risk if the government cannot pay its bills.

Measures for Ending Government Shutdown and Increasing Debt Ceiling Expected to be Combined

While neither side is indicating any room for negotiation, it is being widely reported that a Fiscal Year 2014 appropriations bill and the debt ceiling increase will be taken up together. The anticipated showdown is expected to intensify in the days leading up to October 17, the date when the U.S. is projected to begin defaulting on its debts. Many economists believe it could set in motion events that would have a devastating impact on the economy as interest rates soar, stock values plummet, and employers stop hiring. Congressional Democrats and President Obama are sticking with their vow to not negotiate other funding and tax issues as part of any proposal to raise the debt ceiling. House Republicans, meanwhile, continue to discuss a number of provisions to attach to a debt-ceiling hike, including a one-year delay of the ACA’s requirement that individuals purchase health insurance or pay a fine.

Read more about other possible provisions tied to the raising of the debt ceiling at the Center for Budget and Policy Priorities website.

Debt Ceiling Determined to Be Reached On October 17

Last week, Treasury Secretary Jack Lew issued a letter stating that the U.S. will not be able to meet its financial obligations after October 17 unless the debt ceiling limit is raised. The letter increases pressure on Congress to pass a bill raising the statutory borrowing authority above the current $16.7 trillion limit. Congressional Democrats and President Barack Obama have vowed not to negotiate other funding and tax issues as part of any proposal to raise the debt ceiling. House Republicans, meanwhile, have been discussing a number of provisions to attach to a debt-ceiling hike, including a one-year delay of the ACA’s requirement that individuals purchase health insurance or pay a fine and cuts to Medicaid, and Medicare. Though no bill has yet been made available, details of the House plan were leaked to the press last week and provide insight about where the House leadership would like to begin the discussion about raising the debt ceiling limit.

Debt ceiling deal reached, temporarily removing threat of default from spending and revenue obligations

On Jan 23 and 31, respectively, the House and Senate passed the “No Budget, No Pay Act of 2013” to temporarily increase the nation’s debt limit until May 19. This action postpones the threat of federal government defaulting on its obligations. President Obama is expected to sign the bill. The legislation temporarily suspends the $16.4 trillion limit on federal borrowing, which will allow the government to meet obligations like Social Security benefits and government salaries. It also holds the salaries of Members of Congress in escrow if the House and Senate fail to pass a budget resolution by April 15.

The measure changes the order of major fiscal showdowns Congress faces. The debt ceiling increase now moves to the end of the series of critical budget events:

  • March 01 – Across-the-board spending cuts (“sequestration”) to take effect
  • March 27 – FY 2013 short term appropriation (“continuing resolution”) ends
  • March 30 – President Obama expected to submit FY 2014 Budget Request
  • April 15 – Deadline for House and Senate to pass FY 2014 Budget Resolution
  • May 19 – Debt ceiling increase expires

Republican leadership in the House of Representatives initiated this effort to try to force the Senate to describe its proposal to address the federal deficit. Senator Patty Murray (D-WA), the new chair of the Senate Budget Committee, had earlier announced her intention to have the Committee produce a budget resolution. Having a budget resolution passed by the Senate would mark a new starting point for negotiations on a long term deal.

The Arc will continue to advocate for the protection of disability-related entitlement and discretionary programs and for a balanced approach to deficit reduction that includes revenues during these critical budget events.

Gang of Eight concludes retreat to develop bipartisan deficit reduction plan

Last week, the bipartisan group of Senators known as the “Gang of Eight” concluded their three day retreat. The group first came together in the summer of 2011 to try to develop a plan to solve the debt ceiling crisis but failed to reach an agreement in the end (see the Draft Plan from July 2011). Since then, they have added two new members – Senators Mike Johanns (R-NE) and Michael Bennett (D-CO). The future of any final plan they develop hinges largely on the results of the election. If either party takes control over the Presidency and the House and attains 60 votes in the Senate, it could greatly bolster its position on revenue, which has by far been the biggest obstacle to reaching a deal. If, however, we continue to have a divided government, it will be difficult to find consensus on a deficit reduction agreement. The members of the Gang of Eight are:

Debt Ceiling Legislation Enacted; Bulk of Spending Cuts Put Off

The Budget Control Act was passed by the House (269 to 161) and Senate (74 to 26), and signed into law by President Obama on August 2nd.  The law provided for an immediate increase in the debt ceiling and stepped increases in the debt ceiling that should suffice until early 2013.

In addition, the Budget Control Act provides for a three-step process:

  1. Raising the debt ceiling (the legal amount the federal government is allowed to borrow) and placing caps on discretionary programs. This is expected to cut about $1 trillion in spending from discretionary programs over a 10 year period (2012-2021). These cuts must be balanced between defense and non-defense spending (which could include important disability-related programs like housing, education, employment, and transportation). Entitlement programs (Medicare, Medicaid, Social Security, and Supplemental Security Income (SSI)) are protected from cuts in the first step. There is also an increase in spending for a few programs that Congress believes will lead to more savings, including new spending for the Social Security Administration to do more Continuing Disability Reviews and more spending for stopping fraud and abuse in entitlement programs.
  2. Cutting an additional $1.2 to $1.5 trillion from the federal budget over 10 years. This will be initiated by a twelve-member, bipartisan Joint Select Committee on Deficit Reduction that will propose specific spending cuts by November 23rd. The Committee can include new or increased revenues, changes and cuts to entitlement programs, and additional caps to discretionary programs at this step. The Committee’s plan must get the support of at least 7 of its Members to be voted on by the full Congress. Congress will then hold an up or down vote, with no amendments allowed, on the spending cuts legislation by December 23rd.
  3. If this Committee fails to obtain agreement from at least 7 of its members to cut $1.2 trillion or if Congress fails to enact it, then automatic, across-the-board spending cuts will be triggered for 2013-2021. The amount of these cuts will be the difference between the amount enacted (if any) and $1.2 trillion (for example, if only $1 trillion in cuts are enacted, then there will be across-the-board cuts to achieve the additional $200 billion in cuts).  However, any automatic, across-the-board cuts would exempt the low income entitlement programs, such as the Medicaid and SSI programs. Medicare cuts of 2 percent are allowed but will fall on the providers only.  Cuts would take effect in January 2013.

The Budget Control Act also requires a Congressional vote on a balanced budget amendment to the Constitution which would require a balanced budget every year. The balanced budget amendment vote, however, would not impact the increase in the debt ceiling or the 3 steps outlined above for reducing the deficit.

The Budget Control Act does not provide details about which programs will be cut or by how much. That work will be done over the upcoming months through the normal Appropriations Committee process and working with the new Joint Select Committee or “super committee.” It remains to be seen how disability-related programs will fare. Important discretionary programs such as education, housing, vocational rehabilitation, and transportation can be cut in the first phase. Deeper cuts can happen in the second phase, as well as cuts to entitlement programs.   Congress is not required to raise revenues though they are not prohibited from doing so. Therefore, aggressive advocacy to protect the programs that are important to people with disabilities will need to continue through the end of the year.

Recess? Not for Advocates! The Fight to Protect Medicaid Continues!

After a long and unusually arduous process, Congressional leaders and President Obama reached a deficit reduction and debt deal in time to avoid defaulting on the Nation’s debt.  Your work to convince legislators to protect Medicaid in the short term made a difference!  Now, we must redouble our efforts as more grave threats lie ahead…

What’s in the deal?

On August 2nd, President Obama signed a bill into law to raise the debt ceiling and place spending caps on discretionary programs, reducing spending by $1 trillion over ten years.  These cuts must be balanced between defense and non-defense spending, which could include important disability-related programs like housing, education, employment, and transportation. Entitlement programs, including Medicare, Medicaid, Social Security, and Supplemental Security Income (SSI), are protected from cuts in this first step.  Over the next two months, committees in Congress will finalize what programs bear the brunt of the cuts.

What’s next?

This fall, Congress is charged with cutting an additional $1.2 to $1.5 trillion from the federal budget over 10 years.  This will be initiated by a twelve-member bipartisan Congressional “super committee” (Joint Select Committee on Deficit Reduction) that proposes specific spending cuts by November 23rd.  The Committee’s plan must get the support of at least 7 of its members to be voted on by the full Congress.  Congress will then hold an up-or-down vote, with no amendments allowed, on the spending cuts legislation by December 23rd.  Cuts to important disability-related discretionary and entitlement programs, like Medicaid, could be proposed by the Committee and enacted by Congress.

If this committee fails to obtain agreement from at least 7 of its Members to cut $1.2 trillion or if Congress fails to enact it, then automatic, across-the-board spending cuts will be triggered for 2013-2021.  However, any automatic, across-the-board cuts would exempt the low income entitlement programs, such as the Medicaid and SSI programs.  Small Medicare cuts are allowed but will fall on the providers.

What does this mean for the Medicaid lifeline?

Medicaid and other programs that serve people with I/DD are still extremely vulnerable to cuts.  The Arc is deeply concerned that the next proposals in this process could include significant cuts to Medicaid.

What can I do?

Right now, Members of Congress are home on recess until September.  With Members of Congress in their districts, reading their local newspapers, we are asking you to write letters to the editor to share your story.  Tell your Members of Congress “Don’t Cut Our Lifeline!”

Find your local newspapers that take letters to the editor, and submit one today!

What should I include in my letter?

  • Medicaid is our lifeline to services and supports.
  • Medicaid and other programs that serve low-income people must be protected in deficit reduction plans.
  • Increased revenues must be part of any deficit reduction agreement to ensure that the budget is not balanced on the backs of people with I/DD.
  • Share your story!
  • Don’t Cut Our Lifeline!

Need a sample to guide you?

Newspapers often have a word limit for letters to the editor.  This letter shows you how to weave a personal story into a short, 150-word letter.

To the Editor:

Now that Congress is moving forward on further cuts to balance the budget, it must not be done at the expense of people with disabilities.

My teenage son has autism and a debilitating connective tissue disorder.  Medicaid is lifeline for our family.  Thanks to Medicaid, he receives health care and long term services when I’m at work and unable to support him.  It pays for his medications, surgeries, and therapies to stay healthy and his personal care services to stay safe.

Without Medicaid, I would have to quit my job and go on public assistance or else place my son, against his will, in an institution where he would be isolated and lose many of the skills he is now developing. I believe the United States is better than that. Congress should be able to find a balanced budget solution without jeopardizing effective, essential programs like Medicaid.

— Linda Guzman, Chapel Hill, NC

Finally…

The August recess is often when Members of Congress hold town hall meetings.  Be on the lookout for these opportunities to ask your elected officials questions about their views on Medicaid and deficit reduction.  We will be providing more information soon on how to advocate at a town hall meeting.

Debt Ceiling Deal Reached by Obama Administration and Congress to be Voted On

After a long and unusually arduous process, Congressional leaders and President Obama reached a deal to avoid defaulting on the Nation’s debt.  This deal, which does not include any revenue increases in the first step, is slated to be voted on by the House today and the Senate shortly after.   It provides for a two-step process:The debt ceiling will be raised immediately and caps will be placed on discretionary programs.  This is expected to cut $1 trillion in spending from discretionary programs over a 10 year period (2012-2021). These cuts must be balanced between defense and non-defense spending (which could include important disability-related programs like housing, education, employment, and transportation).  Entitlement programs (Medicare, Medicaid, Social Security, and Supplemental Security Income (SSI)) are protected from cuts in the first step.  There is also an increase in spending for a few programs that Congress believes will lead to more savings, including new spending for the Social Security Administration to do more Continuing Disability Reviews and more spending on stopping fraud and abuse in entitlement programs.

2) Congress will cut an additional $1.2 to $1.5 trillion from the federal budget over 10 years.  This will be initiated by a twelve-member bipartisan Congressional “super committee” that proposes specific spending cuts by November 23rd.  The committee’s plan must get the support of at least 7 of its members to be voted on.  Congress will then hold an up or down vote, with no amendments allowed, on the spending cuts legislation by December 23rd.  Cuts to important disability-related entitlement and discretionary programs could be proposed by the committee and enacted by Congress.

If this committee fails to obtain agreement from at least 7 of its members to cut $1.2 trillion or if Congress fails to enact it, then automatic, across-the-board spending cuts will be triggered for 2013-2021.  However, any automatic, across-the-board cuts would exempt the low income entitlement programs, such as the Medicaid and SSI programs.  Small Medicare cuts are allowed but will fall on the providers.

The budget deal does not provide details about which programs will be cut or by how much. That work will be done over the upcoming months through the normal Appropriations Committee process and working with the new “super committee.”  It remains to be seen how disability-related programs will fare if Congress approves this deal.  Important discretionary programs such as education, housing, vocational rehabilitation, and transportation can be cut in the first phase. Deeper cuts can happen in the second phase, as well as cuts to entitlement programs. Congress is not required to raise revenues though they are not prohibited from doing so. Therefore, aggressive advocacy to protect the programs that are important to people with disabilities will need to continue through the end of the year. 

Read the budget deal legislation

The Arc will send more information and suggestions for August action later this week, once the results of the House and Senate votes are known.