A ‘Breakthrough’ in Budget Talks

Senator Shelby arrives for votes at the U.S. Capitol in Washington
BRENDAN MCDERMID
By Yuval Rosenberg

Happy Wednesday! Lots going on
today, but we’ll just take a moment to note that "Obi-Wan Kenobi"
is
coming! May the Force be with us
all!

A ‘Breakthrough’ in Budget Talks: Negotiators Agree on
Framework for Spending Bill

Top negotiators in the budget talks for fiscal year 2022 said
Wednesday that a deal is now within sight.

"We have reached an understanding on the framework, which lets
us go to the next step," Sen. Richard Shelby (R-AL), the ranking
member on the Senate Appropriations Committee,
said. "I believe this is a breakthrough in a
bipartisan way." The framework will allow negotiators to produce
topline numbers for defense and non-defense spending, one of the
main sticking points in the talks.

Senate Appropriations Committee Chair Patrick Leahy (D-VT)
confirmed the progress. "I’m far more optimistic than I’ve been in
months and I think we’re on a path to finish something," Leahy told
reporters.

House Appropriations Committee Chair Rosa DeLauro (D-CT) said
the agreement will enable negotiators to move quickly. "I am
pleased that we have reached agreement on a framework, which will
allow our subcommittees to get to work on finalizing an omnibus,"
she said.

None of the lawmakers provided further details on the topline
numbers.

The Senate is expected to take up the short-term bill that the
House passed on Tuesday, which would avert a government shutdown
after February 18, when the current stop-gap bill expires, and
extend funding until March 11. That should give negotiators
sufficient time to finalize appropriations for the 2022 fiscal
year, which have been frozen in the absence of an agreement.

The bottom line: Passing an appropriations package for
2022 will allow President Biden to put his stamp on spending at the
federal agencies, which are still operating under instructions put
in place by former President Donald Trump. The bill is expected to
provide a sizable boost for defense spending, larger than the White
House requested, and an increase for various social programs
related to Biden’s domestic agenda. It would also unlock billions
in spending provided by the bipartisan infrastructure bill signed
into law last fall.

Congress Looks to Deliver a $50 Billion Rescue Plan for the US
Post Office

Congress took a big step Tuesday toward reforming the U.S.
Postal Service’s shaky finances and allowing the ailing agency to
move ahead with modernization efforts.

The House overwhelmingly approved a bill that would save the
USPS about $50 billion over the next decade.

"Today’s historic bipartisan vote brings us one step closer to
finally putting the Postal Service on a sound financial footing so
it can continue serving all Americans for years to come," Rep.
Carolyn Maloney (D-NY), chairwoman of the Oversight Committee, said
in a statement after the bill’s passage. She told
The Washington Post that the bill, which she
sponsored, "will save taxpayers’ dollars while at the same time
making the operations of the post office more financially stable
and sustainable, and making postal jobs and employee health
benefits more secure."

The Postal Service Reform Act, approved in a 342-92 vote, would
require retired USPS employees to enroll in Medicare when eligible.
About a quarter of postal retirees do not enroll in the federal
health care program for seniors, the House Committee on Oversight
and Reform said in an outline of the reform bill. "This means the
Postal Service is stuck paying far higher premiums than any other
public or private sector employer," the committee said.

The Postal Service estimates that the change could save it
almost $23 billion over 10 years, and the Congressional Budget
Office projected that the legislation overall would save the
government $1.5 billion over a decade as postal retirees help lift
Medicare’s prescription drug discounts.

The legislation would also eliminate a requirement imposed by
Congress in 2006 that the Postal Service pre-fund retiree health
benefits 75 years into the future.

Many experts noted that requirement went well beyond what
private companies and other government entities do, and it strained
the Postal Service’s finances, burdening it with liabilities that
postal leaders said kept it from making much-needed operational and
service improvements.

Since 2007, the Postal Service has reported net losses totaling
more than $90 billion, according to
Reuters. The agency on Tuesday announced a loss of
$1.5 billion for the fourth quarter of 2021, compared to a profit
of $318 million for the same quarter the year before. It has
reportedly defaulted on payments to the retiree health fund since
2012, and the pre-funding requirement has accounted for about $153
billion of the Postal Service’s $206.4 billion in liabilities, The
Washington Post reports.

The reform bill would wipe out $57 billion of liabilities to the
retiree health benefit fund, and the Postal Service estimates that
eliminating the pre-funding mandate would also save it about $27
billion over 10 years.

Some critics opposed the requirement that postal retirees enroll
in Medicare, reportedly charging that the change amounts to a
bailout. "Nothing in this bill will make the post office truly
solvent," Rep. Darrell Issa (R-CA) said. "It just wipes out and
wipes away debt and shifts the burden on to taxpayers."

The new bill also requires the Postal Service to keep delivering
mail six days a week, develop an online dashboard with data on
national and local service and expand special rates for local
newspaper distribution.

Why it matters: "The bill, if approved by the Senate,
would be the first major piece of postal reform legislation to make
it through Congress in more than 15 years, and would address issues
that stem from the last reform effort lawmakers passed in 2006,"
writes Jory Heckman of the
Federal News Network.

The legislation is reportedly the result of months of
negotiations between Democrats, Republicans, Postmaster General
Louis DeJoy and Postal Service unions. "We are encouraged that
Congress is moving forward with postal reform legislation and
strongly support enactment," DeJoy said. "These reforms will help
ensure that the Postal Service can operate in a financially
sustainable manner."

What’s next: Senate Majority Leader Chuck Schumer (D-NY)
said that the bill, which also enjoys bipartisan support in the
Senate, would be brought to a vote by the end of next week.

Time for a Gas Tax Holiday?

Against a background of surging gasoline prices at the beginning
of an election year, a group of Democratic lawmakers are calling
for a suspension of the federal gas tax for the rest of 2022.

The Gas Prices Relief Act proposed by Sens. Maggie Hassan (D-HN)
and Mark Kelly (D-AZ) — both of whom are up for reelection in the
fall — would suspend the 18.4 cents per gallon federal gas tax
until the beginning of 2023. The legislation would also empower the
Treasury Department to monitor retail prices of gas to ensure that
producers are passing the tax savings on to consumers. And it would
require the Treasury to maintain the integrity of the federal
Highway Trust Fund by covering the lost gas tax revenues with
general tax revenues.

"People are feeling a real pinch on everyday goods, and we must
do more to help address rising costs, particularly the price of
gas," Hassan said in a statement.

Several Democrats — including Sens. Debbie Stabenow (MI),
Catherine Cortez Masto (NV), Jacky Rosen (NV) and Raphael Warnock
(GA) — have signed on as cosponsors of the bill. In the House, Rep.
Josh Harder (D-CA) expressed support for the legislation.

The nationwide price of a gallon of gas is now $3.45, about a
dollar more than it was a year ago, according to AAA. A recovering
economy and the threat of war in Ukraine are expected to keep
upward pressure on gas prices, at least in the near term.

States Ease Covid Mandates as White House, CDC Lag Behind

As a string of states from California to New York move to relax
or drop mask mandates, Dr. Rochelle Walensky, the director of the
Centers for Disease Control and Prevention, told reporters
Wednesday that the agency is not prepared to change it guidance on
face coverings.

"We continue to recommend masking in areas of high and
substantial transmission — that's much of the country right now —
in public indoor settings," Walensky said during a White House
briefing. "And so we're, of course, taking a close look at this in
real-time, and we're evaluating rates of transmission as well as
rates of severe outcomes as we look at updating and reviewing our
guidance."

Walensky later added that hospitalizations and death rates
remain high, so while current trends are encouraging, "we are not
there yet."

According to CDC data, 99% of U.S. counties still have high
rates of coronavirus transmission. The seven-day average of daily
cases is about 250,000, down about 44% from the previous week.
Hospital admissions are doe about 25% to about 13,000 a day. And
deaths are up slightly from last week to over 2,400 a day.

Despite such numbers, a growing number of states have responded
to declining case rates by announcing plans to drop indoor mask
mandates or mandates for schools — moves that put the Biden
administration and public health officials in an awkward
position.

"The tragic thing is that these are governors that would
probably have followed the White House’s guidance,"
said Dr. Leana Wen, a former Baltimore health
commissioner. "They wanted CDC input and asked for it, but without
a clear timeline, at some point they had to decide that they
couldn’t wait any more. The fault is not theirs, but the CDC’s and
by extension, President Biden’s, which, with each passing day, is
making itself less and less relevant."

Dr. Celine Gounder, an infectious disease specialist who served
on President Biden’s Covid-19 Advisory Board transition team, told

The New York Times that the situation presents
challenges for public health officials: "It’s highly variable
across the country — how much transmission there is, what
vaccination uptake has been — but the C.D.C. produces guidance for
the entire country, so it makes sense for them to be cautious."

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