May 2008

Judge Rules Against CMS

Last Friday, the U.S. District Court for the District of Columbia ruled that the Centers for Medicare & Medicaid Services (CMS) violated a one-year moratorium on a Medicaid reimbursement rule by attempting to issue the regulation in final form on May 25, 2007-the same day the moratorium was signed into law (Alameda County Medical Center v. Leavitt, D. D.C., No. 1:08-cv-00422-JR, 5/23/08). The judge did not rule on the substantive policy issues of the regulation.

CMS Issues SCHIP Notice on Allotment Distributions

Also on Friday, CMS published notification (CMS-2273-N2 and CMS-2265-N) of allotments for the State Children's Health Insurance Program (SCHIP). The notice describes the process and amounts for additional allotments to eliminate FY 2007 funding shortfalls, final allotments for FYs 2008 and 2009, redistribution of unused FY 2005 allotments to eliminate FY 2008 funding shortfalls, additional allotments to eliminate FY 2008 funding shortfalls and provisions for continued authority for qualifying states to use a portion of certain funds for Medicaid expenditures. The notice is effective June 23, 2008, with allotments available for expenditures on or after the start of the applicable fiscal year.

Senate Sends FY 2008 War Supplemental to House with Domestic Add-Ons

Yesterday, the Senate voted to include about $10 billion in domestic spending in its FY 2008 supplemental war spending bill. The bill extends Unemployment Insurance benefits for 13 weeks, through the end of March 2009. Workers in high-unemployment states (unemployment rate of 6% or higher), would receive an additional 13 weeks (26 total) of benefits. The bill also adds $1 billion in FY 2008 funding to the Low-Income Home Energy Assistance Program (LIHEAP).

The bill also would delay seven Medicaid regulations until April 1, 2009. The amendment's moratoria language is similar to H.R. 5613, which passed the House April 23, 2008. The House is expected to consider the Senate version of the FY 2008 supplemental spending measure after the Memorial Day recess.

House-Passed FY 2009 Defense Authorization Would Support Impacted Schools

Yesterday, the House passed H.R. 5658, the "National Defense Authorization Act for Fiscal Year 2009." The bill authorizes $50 million to assist Local Educational Agencies (LEAs) that enroll significant numbers of military dependent students and $15 million to assist LEAs with student enrollment changes due to base closures, force structure changes or force relocations. The current authorization for these programs is $30 million and $10 million. Under current law, an LEA cannot receive funds under either of these programs until the fiscal year after the increase in students has occurred; H.R. 5658 allows certain LEAs to receive funds in the same fiscal year that the increase occurs.

CMS Rule Makes Medicare Part D Data Available to States

Yesterday, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that permits certain parts of Part D claims data to be used for program monitoring, research, public health, care coordination, quality improvement, population of personal health records and other purposes. Other federal government agencies, states, external researchers and beneficiaries will have access to this information provided they comply with certain guidelines. Additional information is available at http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/08_PartDData.asp.

President Signs Legislation Outlawing Genetic Discrimination

On May 21, President Bush signed into law the Genetic Information Nondiscrimination Act (H.R. 493). The law amends the Employee Retirement Income Security Act and the Public Health Service Act to make it illegal to deny insurance or employment to people based on genetic information. Thirty-four states currently ban genetic discrimination in the workplace. The legislation does not preempt state law.

Congress Overrides Farm Bill Veto

Today the Senate overrode President Bush's veto of  an incomplete five-year farm bill, enacting the measure into law. The House overrode the veto Wednesday evening.

The enacted legislation contains only 14 of the 15 titles lawmakers thought they were backing when the House and Senate adopted the conference report on the bill. The trade policy title was inadvertently omitted, and the mistake did not surface until Wednesday, after the president vetoed the bill.

Democratic leaders said they had conferred with parliamentarians for both chambers and concluded they could enact the flawed bill over the president's veto and then pass a bill consisting of just the missing trade title.

House Passes Tax Extenders

Yesterday, the House passed a tax package that extends several tax provisions that expired last year. The bill is offset by tax changes to the treatment of deferred compensation paid by managers of offshore hedge funds and by a delay in the implementation of the worldwide interest allocation rule. The bill includes an extension of the research and development tax credit and continuation of the deductibility of state and local sales taxes. The administration has threatened to veto the legislation over the offset.

HHS Extends Two Medicaid Moratoria

The Department of Health and Human Services (HHS) announced it would extend for 60 days the moratoria on two Medicaid regulations related to limitations on payments to public providers and graduate medical education. The moratoria were set to expire May 25, 2008; with the extension, they are scheduled to take effect August 1, 2008.

Conferees Reach Budget Agreement

House and Senate conferees have agreed to a budget resolution for FY 2009. The House agreed to drop reconciliation instructions that could help avoid filibusters in the Senate, and the Senate pulled provisions calling for $35 billion in additional economic stimulus spending. The conference report still exceeds the president's discretionary spending limits by $22 billion. The resolution makes extensive use of reserve funds for legislative priorities such as energy, school construction, higher education reauthorization and infrastructure investment. The House is expected to take up the conference report today, with the Senate following on Thursday. Budget resolutions are non-binding and do not require the president's signature.

Another Higher Education Extension

Yesterday, the House and Senate approved S. 3035, "A Bill to Temporarily Extend the Programs Under the Higher Education Act of 1965." Congress now has until June 30 to complete its work on the reauthorization of the Higher Education Act. The previous extension expires May 31.

House, Senate Pass Farm Bill by Veto-Proof Margins

The Senate adopted the farm bill conference report (H.R. 2419) by a vote of 81-15. The House passed the bill 318-106 on Wednesday. President Bush has said he will veto the bill; however, both houses have now passed the measure with veto-proof majorities.

House Votes to Delay Medicaid Regulations

On Thursday, the House voted 256-166 to approve an amendment that delays seven controversial Medicaid regulations until April 1, 2009. The administration has said it does not support the House's supplemental spending bill and referenced the Medicaid regulations. The Senate Appropriations Committee approved its version of a supplemental spending bill on May 15, which includes similar moratoria for the Medicaid regulations. The Senate committee also approved an amendment that would make the August 17, 2007, directive limiting eligibility for the State Children's Health Insurance Program (SCHIP) "null and void."

House Committee Approves FY 2009 Defense Authorization

Yesterday, the House Armed Services Committee approved the FY 2009 National Defense Authorization Act, H.R. 5658.  Included in the measure is authorization of an additional $800 million for procurement of National Guard and Reserve equipment.

House Committee Passes Transit Bill

The House Transportation and Infrastructure Committee yesterday passed the "Saving Energy through Public Transportation Act of 2008," H.R. 6052. The bill authorizes $1.7 billion over two years for transit agencies that reduce transit fares or expand services. The bill also increases the federal share to 100% for clean and alternative fuel bus, ferry or locomotive-related equipment or facilities and extends the federal transit benefits program beyond the Washington, DC, region to all federal agencies in the United States. The bill also creates a vanpool pilot program, which will allow funds from private providers to be used to match federal transit funds. Finally, the bill increases the federal share for additional parking facilities at end-of-line fixed guideway stations to 100%.

Justice Department Seeks Byrne Applications

The Department of Justice, Office of Justice Programs, Bureau of justice Assistance (BJA) is seeking applications for funding under the Edward Byrne Memorial Competitive Grant Program: National Initiatives. Those applying for a grant must show that it helps to improve the capacity of local adult criminal justice systems and provides for national support efforts, such as training and technical assistance projects to strategically address needs. Applications must be submitted through Grants.gov. For technical assistance with submitting the application, call 800-518-4726. All applications are due June 11, 2008.

House and Senate Consider Supplemental

The House passed parts of a supplemental spending package, but was unable to move funding for operations in Iraq and Afghanistan. Leaders were looking to move the supplemental package in several parts including funding for the war, emergency domestic spending, including extended unemployment benefits and expanded veterans benefits. Republican House members, however, protested the procedural maneuver by voting "present" rather than for or against the war spending provisions sending it to defeat. The House did approve an expansion of veterans' benefits with offsetting revenues from a new tax on individuals making more than $500,000 or couples making $1 million annually. The bill now moves to the Senate where the Appropriations Committee yesterday considered a $193 billion supplemental measure. Despite efforts by Committee Chairman Byrd to limit additional spending in the bill, several provisions were adopted, including funds for low income heating and cooling assistance and the extension of the H2B visa exemption that expired in 2007. The bill moves to the Senate floor, but with only one week left before the Memorial Day recess, consideration may slip to June.

House Ways and Means Approves Tax Extenders

The House Ways and Means Committee voted to approve a $57 billion package of one-year tax extensions. The bill includes the research and development tax credit, energy tax incentives, an extension of the deductibility of state and local sales taxes and a new standard deduction for state and local property taxes. The bill does not address the alternative minimum tax, but is offset by changes tax in provisions related to the treatment of deferred compensation paid by managers of offshore hedge funds. The bill is likely to be considered by the full House next week. The Senate Finance Committee plans to take up its own version of the legislation this summer.

Farm Bill Conference Report Released

House and Senate negotiators released the conference report for the farm bill (HR 2419). The measure includes $10.3 billion for nutrition programs, $3.8 billion for a permanent disaster assistance program, $4 billion in additional funding for conservation programs and $1 billion for energy programs. The bill also lowers income eligibility limits for both non-farm and farm income, grants farmers revenue guarantees based on state crop prices and reduces the ethanol tax credit. President Bush has said he will veto the measure because it does not do enough to lower farm subsidies. The current extension of the farm bill expires on Friday.

Budget Possible Before Break

House and Senate Budget Committee Chairmen Spratt and Conrad said they have reached an informal agreement on the FY 2009 budget resolution and conferees could be named this week. Although details have not been released, the blueprint is expected to make use of several "triggers" as a compromise for extending expiring tax cuts without offsets. The plan also is expected to reject the administration's call for cuts to Medicare and Medicaid.

Senate Reauthorizes Flood Insurance Program

Yesterday, the Senate voted to overhaul and reauthorize the National Flood Insurance Program for five years. H.R. 3121 would forgive $17.5 billion in debt that the program incurred after hurricanes Katrina and Rita. It would require residents in areas behind levees and dams to buy flood insurance, update flood maps and phase out subsidized insurance rates on vacation homes. In contrast to the House-passed version, the Senate measure does not expand the program to cover damage caused by wind. The administration has threatened a veto if wind damage coverage is included in the final bill.

House Completes Foreclosure Bills

The House has passed two bills designed to help mitigate the current housing foreclosure problem. H.R. 5818 would establish a $15 billion loan and grant program to help states and qualifying cities purchase and rehabilitate owner-occupied foreclosed properties. H.R. 3221 combines several measures, including Fannie Mae and Freddie Mac reform, Federal Housing Administration (FHA) modernization, an expansion of the FHA's loan guarantee program (H.R. 5830), modifications of legal liability for mortgage servicers (H.R. 5579) and a tax package (H.R. 5720). The House adopted an amendment that would preserve state authority to regulate foreclosures.

Farm Bill Conference Report Expected Next Week

House and Senate farm bill negotiators announced an agreement yesterday, setting the stage for consideration of a conference report next week. The administration has threatened to veto the measure. It provides $10.4 billion for nutrition programs.

President Signs Student Loan Bill

Yesterday, President Bush signed H.R. 5715, the "Ensuring Continued Access to Student Loans Act of 2008," which is intended to ensure access to federally backed student loans for the coming academic year. See FFIS Issue Brief 08-24 for a description of the bill.

House Approves HEA Extension

On May 6, the House of Representatives passed S. 2929, a one-month extension of the Higher Education Act of 1965. The Senate approved the extension April 29. The previous extension expired April 30; the House-passed extension is retroactive to that date. Congress now has until May 31 to resolve differences between the House- and Senate-passed bills currently in pre-conference. A primary point of contention is the  "maintenance of effort" mandate that would dictate state higher education spending (see Issue Brief 07-55).

CMS Issues New Letter on SCHIP Crowd-Out Policy

Yesterday, the Centers for Medicare & Medicaid Services (CMS) sent a letter to state health officials regarding the State Children's Health Insurance Program (SCHIP) to clarify several issues raised in the agency's earlier directive, issued August 17, 2007. The current letter reiterates that SCHIP covers the lowest-income children first and prevents substitution of public health benefits over private insurance coverage. In addition, it states that the August 17, 2007, guidance does not require states to apply the crowd-out policies to current enrollees or to SCHIP coverage for unborn children. It also notifies states that they may seek approval to apply certain exceptions to crowd-out policies.

FAA Bill Pulled from Senate Floor

H.R. 2881, which would reauthorize the Federal Aviation Administration (FAA) through 2011, was pulled from the Senate floor yesterday. An extension of the current authorization through the fall of 2009 is now expected. The current extension (P.L. 110-190) expires on June 30, 2008.

Senate Committee Approves FY 2009 Defense Authorization

Last Wednesday (April 30), the Senate Armed Services Committee completed its markup of the FY 2009 National Defense Authorization Act. The bill will be filed publicly on May 15, and Senate floor consideration could come the week of May 19. The bill provides a 3.9% pay raise for uniformed personnel.

Consolidated Federal Funds Report Released

The Census Bureau has released the Consolidated Federal Funds Report for FY 2006. It is available at the following website: http://www.census.gov/govs/www/cffr06.html.

House Passes Student Loan Bill

Yesterday, the House passed H.R. 5715, as amended by the Senate. The bill would increase federal student loan limits by $2,000 per year, allow parents to defer payment on federal PLUS loans for six months after their student leaves school and ensure that parents hit by the mortgage crisis can still qualify for PLUS loans. It would allow the Department of Education to: 1) provide capital for loans to state guaranty agencies under its "lender of last resort" program and 2) temporarily inject liquidity into the market by buying up federally guaranteed student loans that lenders are unable to sell as securitized debt. The Senate modifications clarify that lenders of last resort are bound by the same conflict-of-interest rules as traditional lenders and prohibit them from offering discounts that traditional lenders cannot match, as well as expand eligibility for Academic Competitiveness and SMART Grants.

FAA Bill Stalled in Senate

Tax provisions addressing the shortfall in the Highway Trust Fund (HTF) that are included in the tax portion of the Federal Aviation Administration (FAA) reauthorization bill (HR 2881) have stalled its progress. The Senate will vote next Tuesday on whether to invoke cloture and limit debate on a substitute amendment to the bill, but without a compromise on the HTF provisions, the outlook of that vote is uncertain. The current authorization for aviation programs and taxes will expire on June 30, 2008, while contract authority for the Airport Improvement Program will expire on September 30, 2008.

CMS Issues Letter on State High-Risk Pool Funding

The Centers for Medicare & Medicaid Services (CMS) relayed a letter to state health officials regarding grant funding for the 2008 high-risk pool initiative. More than $49 million is available to support the operation of state high-risk insurance pools. States that have established a qualified high-risk pool that has incurred losses and meets certain standards may apply for funding. Applications are due June 9, 2008 and awards will be announced around July 1, 2008. More information is available at www.grants.gov.

Senate Passes Student Loan Bill

Yesterday, the Senate passed H.R. 5715, the "Ensuring Continued Access to Student Loans Act of 2008."  The Senate version is similar but not identical to the House-passed measure, thus requiring the House to take up the bill again before it is sent to the president. The Senate bill would increase federal student loan limits by $2,000 per year, allow parents to defer payments on federal PLUS loans for six months after their student leaves school and ensure that parents hit by the mortgage crisis can qualify for PLUS loans. The measure also would allow the Department of Education to provide capital for loans to state guaranty agencies under its "lender of last resort" program that could be used for both students and institutions facing loan shortages. It also would allow the department to buy federally guaranteed student loans that lenders are unable to sell as securitized debt. 

House Passes Highway Technical Corrections Bill

Yesterday, the House passed the Senate version of H.R. 1195, which includes technical corrections to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The bill includes a provision that instructs the Department of Justice to investigate how an earmark was included in SAFETEA-LU after both chambers voted on the final version of the bill, but before the president signed it. The bill increases the minimum proportion each state would receive in federal grants for highway safety programs, changes the factors that the Federal Transit Administration must take into account when evaluating new starts proposals and provides flexibility to sates in imposing penalties on drunk drivers. The president is expected to sign the bill.