Top stories of the week from Capitol Hill

[Omaha Steve]

March 20, 2009

In this issue:

* House Panel Debates Public Plan Option and Tax Exclusion in Health Care Reform
* House Panel Hearing on Medicare Highlights Need for Public Plan in Health Care Reform
* House Targets AIG Bonus Money
* House Committee Holds Hearings on Early Childhood Programs
* House Passes Major Expansion of AmeriCorps and Other Domestic Volunteer Programs
* Congress Approves Federal Aviation Administration Extension
* Bill to Reduce Cost of Cutting Edge Medicines Introduced
* Update on Economic Recovery Implementation

House Panel Debates Public Plan Option and Tax Exclusion in Health Care Reform
This week, the House Energy and Commerce Health Subcommittee debated the merits of a public plan option in a reformed health care system and the tax exclusion for employer-provided health benefits. Witnesses noted that a public plan is an important choice for consumers and would lead to more competition. One witness stressed that a public plan could push private health insurers to improve their pricing and benefits packages.

Rep. Frank Pallone Jr. (D-NJ), subcommittee chair, expressed concern about eliminating the tax exclusion for employees who receive their health insurance through their employers, arguing that, "eliminating those tax incentives may further exacerbate the affordability problems we already face with employer-sponsored insurance and not necessarily do anything to improve the affordability of coverage in the individual market." A concern was also raised that eliminating the tax exclusion would weaken employer-provided coverage, which has successfully pooled risk in the private sector.

Congress plans several more hearings on health care reform over the next two months, with the goal of sending a bill to President Obama before the August recess.
(Fran Bernstein- [e-mail])

House Panel Hearing on Medicare Highlights Need for Public Plan in Health Care Reform
The House Ways and Means Health Subcommittee held a hearing to examine the recommendations of the Medicare Payment Advisory Commission (MedPAC). Panel chairman Rep. Pete Stark (D-CA) pointed to the sky-rocketing costs of Medicare's prescription drug program as evidence of the need for a government insurance plan option. Only private insurers are allowed to administer Medicare's drug benefit, and they have hiked premiums an average of 25% in 2009. The hearing also highlighted the problems with the private Medicare Advantage plans. Each dollar's worth of "enhanced benefits" in these plans costs taxpayers and beneficiaries over three dollars. Medicare plans pay private insurers 114% what it would cost traditional Medicare for the same beneficiaries. AFSCME supports President Obama's proposal to reduce federal government overpayments to these private insurance plans.
(Linda Bennett- [e-mail])

House Targets AIG Bonus Money
In the wake of public outrage over the unfolding American International Group Inc. (AIG) executive bonus story, the House swiftly passed a bill that imposes a tax on employee bonuses paid this year by companies receiving bailout money. The House bill (H.R. 1586) targeting the $165 million in bonus checks paid out to executives at AIG, passed by a vote of 328-93 (http://clerk.house.gov/evs/2009/roll143.xml), with 85 Republicans voting for it and 87 voting against. Six Democrats voted no, Reps. Melissa Bean (IL), Larry Kissell (NC), Michael McMahon (NY), Walt Minnick (NY), Harry Mitchell (AZ), and Vic Snyder (AK). Despite the strong support in the House, the bill faces an uncertain future in the Senate, where several senior Republican senators have indicated their intent to slow down consideration of the bill.
(Ed Jayne- [e-mail])

House Committee Holds Hearings on Early Childhood Programs
This week, the House Education and Labor Committee held two hearings focused on improving early childhood programs, with testimony given by early childhood leaders in state government and advocates. They described attempts to promote and coordinate early childhood programs across several state departments by incorporating multiple yet inadequate public funding streams to improve quality and access to programs for children up to the age of five. Workforce needs, including adequate pay and access to training, were also discussed as keys to improving quality. These hearings are likely the first steps toward creating the President's proposed early learning challenge grants for states to coordinate and improve early childhood programs. The statements of witnesses are available at
http://edlabor.house.gov/education/early-childhood/.
(Becky Levin- [e-mail])

House Passes Major Expansion of AmeriCorps and other Domestic Volunteer Programs
Responding to President Obama's call to Congress to pass legislation expanding volunteer programs, the House approved by a bipartisan vote of 321-105 the GIVE Act (H.R. 1388) which extends and expands the AmeriCorps program and creates new volunteer programs focused on education, health care, clean energy and veterans. The legislation would expand the number of AmeriCorps volunteer positions from 75,000 to 250,000. Many of these volunteers are likely to be placed in public agencies.

During debate on the bill, House Education and Labor Committee Chairman George Miller (D-CA) stated that a provision in the bill authorizing AmeriCorps officials to transfer functions to state commissions would not lead to the closure of the Corporation's state offices, where many AFSCME members work. The provision had caused considerable concern among those employees, and we worked with the administration and congressional staff to clarify the bill's intent.

The Senate is scheduled to approve a companion bill soon. We expect the legislation to go to the White House before the April recess.
(Nanine Meiklejohn- [e-mail])

Congress Approves Federal Aviation Administration Extension
This week, the House and Senate approved legislation that would extend operations at the Federal Aviation Administration (FAA) through September 30, the end of the fiscal year. The legislation (H.R. 1512) would allow the FAA to collect and spend excise taxes that fuel the aviation system. The FAA has been operating under a series of extensions since October 2007, when the most recent law expired. Earlier this month, the House approved a long term $70 billion bill (H.R. 915) that would extend operations through 2012, while the Senate has yet to write its bill.
(Cynthia Bradley- [e-mail])

Bill to Reduce Cost of Cutting-Edge Medicines Introduced
House Energy and Commerce Committee Chairman Henry Waxman (D-CA) introduced legislation (H.R. 1427) with Reps. Frank Pallone (D-NJ) and Nathan Deal (R-GA) that would allow the Food and Drug Administration (FDA) to approve generic versions of biologic medicines. Currently the FDA has no process to approve generic versions of biologic medicines, which include recombinant insulin and medicines to treat anemia in kidney dialysis and cancer patients. Like chemically derived generic pharmaceuticals, generic biologics are expected to reduce rising drug costs and will save Medicare and Medicaid billions of dollars.
(Linda Bennett- [e-mail])

Update on Economic Recovery Implementation
Federal departments continue to issue information and guidance to states on accessing American Recovery and Reinvestment Act of 2009 (ARRA) funds:

The Department of Health and Human Services (HHS) announced $268 million in ARRA funding available to support Disproportionate Share Hospitals (DSH), which serve a disproportionate share of low-income or uninsured individuals. States must request the additional funds from Centers for Medicare and Medicaid Services (CMS) as part of their quarterly Medicaid budget request and the funds will be distributed as separate ARRA DSH grants. A complete list of the revised DSH allotments that include additional funding provided through the ARRA is at http://www.hhs.gov/recovery/cms/dshstates.html.

HHS also has released explanatory information and state-specific FMAP increases for foster care and adoption assistance at http://www.hhs.gov/recovery/programs/acf/adoption-foster.html. HHS has also announced awards for senior nutrition programs at
http://www.aoa.gov/FINAL_RELEASE_HHS_ANNCMT_3-18-09.pdf. State by state numbers are posted at http://www.aoa.gov/.

The Department of Labor's Employment and Training Administration has released a Training and Employment Guidance Letter providing policy guidance on ARRA implementation for Workforce Investment Act and Wagner-Peyser activities at http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2728.

The Department of Agriculture has released information on SNAP (formerly called Food Stamp program) funding to increase participation at http://www.fns.usda.gov/cga/PressReleases/2009/PR-0056.htm and has issued guidance for school lunch equipment funding to states at http://www.fns.usda.gov/fns/recovery/memos/SP_18-2009_sa.pdf.

The Department of Justice has released application information for the Community Oriented Policing Services (COPS) grants at http://www.cops.usdoj.gov/default.asp?Item=2108. And it has announced solicitations for Office of Violence Against Women (OVW) funding and posted a comprehensive list of additional requirements for OVW ARRA programs. This list includes many requirements that are generic to all grant programs. This information can be found at http://www.ovw.usdoj.gov/recovery-applicants.htm.

The Department of Energy has issued weatherization program guidance, including state allocations, at http://www.waptac.org/sp.asp?id=6878.

The Environmental Protection Agency has issued guidance for water quality management planning grants (part of Clean Water State Revolving Fund) at http://www.epa.gov/recovery/.
(Fran Bernstein- [e-mail])

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