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2016 Race for
the White House
Since our last update
in the June issue of Capitol Commentary, additional presidential
hopefuls have formally entered the race. The latest to
announce include Chris Christie, Jeb Bush, Bobby Jindal, and Donald
Trump, who make the GOP tally 14. Republicans slated to announce
include Wisconsin Governor Scott Walker on July 13 and Ohio Governor
John Kasich on July 21. On the Democratic side, there are 5 contenders,
with Jim Webb being the most recent to announce on July 2.
Health Care
Affordable
Care Act
In
a 6-3 decision authored by Chief Justice John Roberts, the Supreme
Court upheld a key provision of ObamaCare. The King v. Burwell decision
made on June 24 is a huge victory for President Obama, allowing 6.4
million people to continue to receive subsidies to purchase health
insurance on the federal exchange in 34 states.
In
a separate provision of the Affordable Care Act, the medical device tax
repeal, HR 160, passed a House vote 280 to 140. The bill, that called
for the repeal of a contentious 2.3 percent medical device tax, now
heads to the Senate. The tax went into effect at the beginning of
2013 and includes certain classes of regulated medical devices,
including replacement joints, pacemakers, and other implantable
devices. The bill may have enough bipartisan support to get through the
Senate. However, President Obama has threatened to veto the repeal if
it makes it to his desk.
Additionally, companies are grappling with the
controversial Cadillac tax, one of the last components of the
Affordable Care Act to go into effect. At issue is a 40 percent excise
tax on the health benefits companies provide their workers above a
certain threshold. In 2018, the tax will hit insurance and related
incentives valued at more than $10,200 for singles and $27,500 for
families. Taxing those benefits represents a major shift in tax policy.
21st
Century Cures Act
The 21st Century Cures Act (HR 6) is expected
to be voted on by the full House during the week of July 6. The House
Rules Committee will meet on July 8 to discuss the bill, the last step
for major legislation before it goes to the floor for a vote. The bill
has been amended several times and the House Rules Committee released
the modified version of the bill on July 2. The Congressional Budget
Office estimates that the legislation would cost about $106.4 billion
through 2020. To help offset the costs, the legislation would expand on
the sale of oil from the Strategic Petroleum Reserve to 80 million
barrels from 2018 through 2025. The bill also finds savings by pegging
Medicaid payments for medical equipment to rates established by
Medicare, making changes to Medicare Part B payments, and creating new
programs to reduce Medicare Parts C and D prescription drug abuse. This
version of the bill would not delay Medicare prescription drug plan
payments. The modified version of the bill would only increase the NIH
funding to $8.75 billion over the five years, while the original
version of the bill would have increased funding to $10 billion over
the five years. However, the new version of the bill would appropriate
$1.86 billion annually from fiscal year 2016 through fiscal year 2020
for a new “NIH and Cures Innovation Fund.” The original bill would have
appropriated more money to create separate funds and initiatives. The
21st Century Cures Act would authorize $10 million annually
for the creation of drug development tools and $110 million for cures
development. Besides funding the modified legislation would:
·
Exempt the FDA from
sequestration on their user fees and streamline the FDA approval
process on drugs, medical devices and procedures.
·
Create a program
through the FDA to evaluate evidence based on clinical experiences and
testing and have the FDA develop a risk-assessment model for the drug
approval process that uses patient data.
·
Allow drugs that could
treat a life-threatening disease be considered for an accelerate
development plan, where the FDA could sponsor the plan, but also
terminate it.
·
Allow drug sponsors to
use previous data and information to repurpose a previously approved
precision drug for rare and deadly diseases. These drugs that are
repurposed would also be given a six month patent extension.
·
Require pharmaceutical
companies that develop drugs that treat serious diseases to publish
their policies for evaluating and responding to patient requests for
access to unapproved drugs
·
Modify payment rates
for Medicare and for infusion drugs.
The 21st Century Cures Act has been called an
“exceptional” piece of legislation by lawmakers. The bill is supported
by Democratic and Republican lawmakers along with many industry leaders.
However, a small number of public health groups oppose the legislation
and wrote a letter expressing concerns that the bill imposes harmful
regulatory changes and financial incentives that would put patient
safety at risk. Currently the bill has 230 cosponsors and should easily
pass the House. The Senate Health, Education, Labor and Pensions
Committee has held several hearings on this or similar legislation and
is working on its own version of the bill.
Transportation
On July 31, federal highway, transit, and safety
programs along with the Highway Trust Fund will expire. Congress is
working on a long-term bill, but Congress has been unable to find
a sufficient bipartisan source of funding. Throughout several
hearings this year, there have been many proposals and ideas on how to
fund a long term bill. A number of long term bills have been
introduced, but they do not include funding sources (ex. Drives Act).
The most popular and most talked about suggestions to fund surface
transportation are a miles driven tax, an increase to the gas tax, a
yearly fee tied to vehicle registration, spending cuts, state funding
(includes tolls), tax code overhaul and repatriation of foreign
earnings. Congress is must unlikely to increase the gas tax. It is also
unlikely that Congress will be able to work out the logistics of a
miles driven tax or come to a bipartisan agreement on a tax overhaul by
the end of the month. A bill with severe cuts to offset funding costs
of a transportation bill would not make it through the Senate nor would
it be signed by the President. Finally, because several committees
share jurisdiction over this matter, a long-term surface transportation
bill is unlikely to go from conception to completion by July 31.
·
The House Committee on
Transportation and Infrastructure Chairman, Bill Shuster settled for
the patch bill that extended the deadline until July 31, but he had
wanted an extension until the end of the year, something he will
continue to support.
·
The House Ways and
means Committee Chairman, Paul Ryan preferred that the extension would
be to the end of the year and not just to July 31. For a long-term bill
he thinks that the best funding source would come from and overhaul to
the tax code.
·
The Senate Finance
Committee Chairman, Orin Hatch has opposed the Administration’s
proposed repatriation tax. He has supported past patch bills.
·
The Senate Committee on
Environment and Public Works Chairman, Jim Inhofe marked up and
approved S 1647. The bill is a six year $278 billion policy bill that
gives states an incentive to tax electric vehicles. The bill also
prioritizes the corridors that move freight. There would be a $90
billion funding gap that is not addressed by the bill. The bill has not
been brought to the floor and there are no plans to bring it up for a
full vote.
·
The Senate Commerce
Committee plans to consideration multi-year bill in July. The committee
along with Chairman John Thune is open to possibly incorporating the
Amtrak reauthorization (S 1626) bill that the committee approved in
June with a surface transportation bill.
Energy/Environment
Michigan
v. EPA
In a 5-4 ruling, the
Supreme Court blocked a top administration environmental effort on June
29, stating EPA restrictions on emissions of mercury and other
pollutants by coal-fired power plants ignored the cost the rules
imposed on the industry. Michigan v. EPA focuses on the EPA’s
first limits on mercury, arsenic and acid gases emitted by coal-fired
power plants, known as mercury and air toxics (MATS). The rule
will remain while the Court of Appeals for the District of Columbia
Circuit decides how the EPA can proceed. The EPA is reviewing the
decision and will decide next steps, including reworking the
regulation, once that process is complete. Opponents of the rule,
including energy companies, utilities and some states, say the Clean
Air Act prohibits the EPA from regulating power plants’ carbon output
if other pollution from the plants is also regulated under another
section of the law.
Renewable Fuel Standard
Opposition from the oil
industry may stop Georgia Republican Barry Loudermilk from pushing for
the $30.2 billion amendment to the appropriations bill that would block
the EPA from implementing the renewable fuel standard. This week, the
House is considering the FY2016 interior-environment spending bill. The
measure would block the EPA from using funds to advance the biofuels
requirement. Concerns for the amendment include whether the measure-if
passed- would result in the failure of the underlying appropriations
bill, which contains language that would limit the government's ability
to regulate fracking on federal land and other riders supported by the
oil industry.
Clean Power Plan
The White House has
begun its review of a proposed federal plan meant to guide states on
how to comply with the Environmental Protection Agency's
soon-to-be-finalized Clean Power Plan. The federal implementation plan,
sent to the OMB on July 2, is meant to serve as a model for any states
that refuse to implement the CPP. The EPA considers the plan as an
interim measure to ensure mandated emission standards are met until
states assume their role as the preferred implementers of the emissions
guidelines. The proposed Clean Power Plan, would allow for states to
set their own unique carbon emission rates for their own power sectors.
The EPA believes that allowing states to regulate their own emission
rates is necessary in order to determine to best way to achieve the
desired reductions. The final version of the federal implementation
plan associated with the CPP is expected to be released in August 2016.
Clean Water Act
Since its publication
on June 19, the final rule clarifying the scope of the Clean Water Act
jurisdiction has been challenged by 18 states. So far three federal
courts are facing resulting lawsuits, and more cases are expected to
arise from regulated industries in the near future. The rule is meant
to take effect on August 25 but must pass a judicial review on July 13
in order to be considered final.
Supreme Court
Rules Same-Sex Marriage Legal in 50 States
In
Obergefell v. Hodges, the Supreme court ruled on June 26 by a 5-4 vote
that the Fourteenth Amendment obliges states to license same-sex
marriages and to recognize same-sex marriages from other states.
Justice Anthony Kennedy wrote for the majority with the four liberal
justices. Each of the four conservative justices wrote their own
dissent. There are still a few holdouts, as various politicians
take stands against the SCOTUS decision they argue is revisionist, or
even illegal. The U.S. is now the 21st country to legalize same-sex
marriage nationwide, including territories.
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