Congress Sets Stage for Ugly Funding Fight

Congress Sets Stage for Ugly Funding Fight

By Yuval Rosenberg and Michael Rainey
Wednesday, September 6, 2023

Good Wednesday evening. Isn’t it amazing how quickly a long holiday weekend fades from memory?

Congress Sets Stage for Ugly Funding Fight

As lawmakers face a September 30 deadline to avoid a shutdown and ultraconservative House Republicans set up a likely clash over funding the government, Senate appropriators on Wednesday announced plans to try to pass a package of three 2024 spending bills as soon as next week.

Democratic Sen. Patty Murray, chair of the Senate Appropriations Committee, and Sen. Susan Collins, the top Republican on the panel, said in a joint statement that the first 2024 spending bills to be considered by the full Senate will be those covering military construction and Veterans Affairs; the Departments of Transportation and Housing and Urban Development; and Agriculture and the Food and Drug Administration.

“This summer, we worked with our colleagues in a bipartisan way to draft and pass out of Committee all twelve appropriations bills for the first time in years—and did so with overwhelming bipartisan votes,” Murray and Collins said in the statement. “This is a critical next step as we continue working collaboratively in the Senate to keep our government funded, find common ground, and deliver for the people back home that we represent.”

Why it matters: The bipartisan approach Murray and Collins highlighted stands in contrast to the appropriations process in the House, where Republicans have clashed with Democrats and among themselves about the annual spending bills.

Congress is also considering a $44 billion White House request for supplemental funding, including disaster aid and money for Ukraine. Senate Minority Leader Mitch McConnell on Wednesday urged lawmakers to provide more support for Ukraine, while other Republicans, especially in the House, oppose such additional aid or want to consider the elements of the supplemental funding request separately. “Since Putin’s escalation in Ukraine, President Biden has not been as decisive as many of us would have preferred,” McConnell said. “But this is no excuse for Congress to compound his administration’s failures with failures of our own.”

The Senate action on government funding will only add to the pressure on House Speaker Kevin McCarthy, who must contend with a disgruntled group of far-right members demanding spending cuts and policy concessions while threatening to oppose a short-term funding patch needed to avoid a shutdown at the end of the month.

“House Republicans are also hoping for floor action this month on their bills to fund the Pentagon, Department of Homeland Security and the State Department,” Politico notes. “But GOP leaders are certain to struggle, with their conference deeply divided by fiscal issues and conservatives pushing for even steeper spending cuts.”

Some GOP House members insist that they won’t support any funding bill that doesn’t authorize a Biden impeachment inquiry — and Rep. Matt Gaetz of Florida this week said that Republicans should force votes on a Biden impeachment. “If Speaker McCarthy stands in our way, he may not have the job long,” Gaetz said.

The bottom line: Any bipartisan deal to fund the government for fiscal year 2024 remains a long way away and a short-term spending patch to avert a shutdown on October 1 also faces challenges. “McCarthy is trying to buy more time beyond Sept. 30 to clear unrealistic House GOP-drafted spending measures,” Punchbowl News said Wednesday morning. “Meanwhile, McConnell and Senate Majority Leader Chuck Schumer — along with senators on both sides of the aisle — are looking to keep the spending measures clean, tidy and bipartisan. … After just one day in session following the lengthy 40-day August recess, it’s clear that McCarthy’s conference is going to struggle mightily to extract any of its legislative priorities from the Senate or the White House.”

That adds up to a potentially ugly battle ahead.

Op-Ed of the Day: Big Pharma Sings the Blues

The Biden administration last week named the 10 drugs it is targeting for price negotiations within Medicare, kicking off a price reduction program authorized by the Inflation Reduction Act that is scheduled to take effect in 2026. Big Pharma is fighting the program tooth and nail, and in today’s New York Times, Larry Levitt, executive vice president for health policy at KFF, formerly known as Kaiser Family Foundation, provides a guide of sorts to some of the arguments that drugmakers will make as they try to sway public opinion in their favor.

1. Lower prices mean fewer new drugs. Levitt says this argument may have some merit, but the ultimate effect could be very small. An analysis by the Congressional Budget Office found the new pricing program would result in 13 fewer drugs over 30 years. “That’s a very small share of the 1,300 new drugs expected over that period,” Levitt writes. “Some of those forgone drugs might be potential lifesaving treatments, but some might be drugs that offer only marginal health benefits. It’s impossible to know for sure.”

2. The government is using price controls. The drug industry is trying to portray the price negotiation program as a kind of “big government” horror, but Levitt says that isn’t the case. “Unlike what typically happens in other countries, the I.R.A. will not control the prices at which drugs are sold in the United States,” he writes. “There are no limits on what drugmakers can charge private insurers and employers, or on the ‘sticker’ prices uninsured patients pay at the pharmacy.” Instead, the program creates an arena to negotiate the price of a small subset of drugs within Medicare – much like any business would.

3. Lower prices only help the government. Levitt rejects this argument out of hand. “The government — that is, taxpayers — will be the primary beneficiary of lower drug prices paid by Medicare, with the Congressional Budget Office projecting $98.5 billion in reduced spending over a decade,” he writes. But individual patients within the Medicare system will save as well.

4. The program is unconstitutional. The courts will have to settle this question, which is the basis for several lawsuits filed by pharmaceutical firms. “If the Supreme Court ultimately overturns drug price negotiation, it would be a blow to a signature element of President Biden’s health care agenda,” Levitt says. “However, as the cases now wind their way through the lower courts, the pharmaceutical industry may not win in the court of public opinion.”

Job Growth Will Slow Over the Next Decade, Government Projects

The U.S. labor market will grow more slowly over the next 10 years than it did during the previous decade, according to new estimates from the federal government Wednesday.

“The U.S. economy is projected to add almost 4.7 million jobs from 2022 to 2032,” the report from the Bureau of Labor Statistics says. “Total employment is projected to increase to 169.1 million and grow 0.3 percent annually, which is slower than the 1.2-percent annual growth recorded over the 2012-22 decade.”

Job growth is projected to be less than 40,000 per month on average over the decade, with the increase concentrated in a handful of industries — most notably healthcare, which is projected to account for 45% of all new jobs.

The big reason for the slowdown is simple: demographics. “Projected employment growth is driven by labor force growth, which in turn is constrained by population growth,” the report says. “Total population is projected to grow slightly slower than previous decades, at 0.7 percent annually over the projections period, although population growth is concentrated among individuals aged 75 and over because of the aging of the baby-boom generation. Because older age groups have lower labor force participation rates than prime age workers, overall labor force participation rates are projected to decline.”

Number of the Day: 70,000

The federal government provided more than $24 billion to help daycare centers maintain and improve operations during the Covid-19 pandemic, but the last of that money is running out at the end of the month. As a result, roughly 70,000 providers could close their doors this fall, threatening daycare for more than 3 million children, according to a June analysis by The Century Foundation, a liberal think tank.

Although women’s participation in the labor force hit a record high this summer, some experts worry that the expected jump in childcare costs and the increased difficulty in finding good care could push some parents out of the labor market. An increase in price for daycare “alters that calculation of whether going back to work, or continuing work, is worth it for a lot of parents,” economist Sarah House of Wells Fargo told Bloomberg.

The Century Foundation estimates that the potential drop in labor force participation related to what it calls the “child care cliff” could reduce overall earnings in the U.S. economy by $9 billion, and could cost employers more than $10 billion in lost productivity and turnover expenses.

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