Washington Highlights: September
9, 2005
Contents
Prior Issues
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House, Senate Consider Delays To Budget Reconciliation
In their first week back from August recess, House and Senate Republican
leaders are considering whether to delay the budget reconciliation
process to allow time to prepare disaster relief legislative packages
associated with Hurricane Katrina. The FY 2006 budget resolution
(H.Con.Res.
95) set a Sept. 16 deadline for congressional committees to
report budget reconciliation proposals to the House and Senate Budget
Committees.
Speaking Sept. 8 on the House floor, House Majority Leader Tom
DeLay (R-Texas) said, "Entitlement reform is still one of the
highest priorities of the House this fall. However, due to the events
of the last 10 days, it has been replaced as the number one priority.
Therefore, we will likely postpone consideration of these very important
reforms for a number of weeks…. I just think it is probably
a little early for us to give specific dates as to when we would
go to markup and those kinds of things until we get a better handle
on what we need to be doing to make sure that we are doing everything
that we can to take care of those victims of Katrina."
House Minority Leader Nancy Pelosi (D-Calif.), Senate Minority Leader
Harry Reid (D-Nev.), Senate Budget Ranking Member Kent Conrad (D-N.D.),
and House Budget Ranking Member John Spratt (D-S.C.) sent a Sept.
7 letter to the Republican Leadership and chairs of the House and
Senate Budget Committees urging them to suspend budget reconciliation.
"Now is not the time to cut services for our most vulnerable,
cut taxes for our most fortunate, and add $35 billion to the deficit,"
the letter says.
Four members of the Senate Finance Committee - Senators Gordon
Smith (R-Ore.), Olympia Snowe (R-Maine), Jeff Bingaman (D-N.M.),
and Blanche Lincoln (D-Ark.) - sent a Sept. 6 letter to Committee
Chair Charles Grassley (R-Iowa), requesting that he "indefinitely
delay" consideration of FY 2006 budget reconciliation instructions,
in light of the "many tragedies surrounding Hurricane Katrina."
The letter argues it is "inappropriate to move forward on …
a legislative package that would cut funding for Medicaid, food
stamps, WIC, housing, and education" during a period when "millions
are displaced and seeking federal and state assistance…."
Chairman Grassley issued a statement
Sept. 8 comment regarding plans to delay budget reconciliation during
Senate work on hurricane relief. He noted, "There's no doubt
that Hurricane Katrina has made it necessary to provide additional
resources for the Medicaid program, and we're going to do that apart
from reconciliation in the Katrina relief package that's being put
together…. It's important to understand that the Medicaid reform
effort is about fixing loopholes and stopping abusive spending so
that more money is available to help states reach those in need
both in the short- and long-term."
The AAMC is particularly concerned about the portion of the FY
2006 budget agreement that instructs the House Energy and Commerce
Committee and Senate Finance Committee to identify $14 billion and
$10 billion, respectively, in cuts to mandatory spending programs.
The cuts would occur over 5 years, and could come from the Medicaid
program.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Senate HELP Committee Approves Higher Education
Bill
The Senate Health, Education, Labor, and Pensions (HELP) Committee
Sept. 8 unanimously approved legislation to reauthorize the 1998
Higher Education Act (P.L. 105-244). Chairman Michael B. Enzi (R-Wyo.)
and Ranking Member Edward M. Kennedy (D-Mass.) introduced the "Higher
Education Amendments Act of 2005" (S.1614) Sept. 6. Like the
House's legislation, the "Higher Education Affordability Act"
(H.R.
609), S. 1614 eliminates the single holder rule, increases annual
subsidized Stafford loan limits from $2,625 to $3,500 for freshmen
and from $3,500 to $4,500 for sophomores (the annual limit for juniors
and seniors remains $5,500 and graduate or professional students
are still eligible for up to $8,500), and increases annual unsubsidized
Stafford loan limits for graduate and professional students from
$10,000 to $12,000.
Higher Education groups are praising the bill as better than the
House version, which the House Education and Workforce Committee
passed in July [see Washington Highlights, July
22], but still say there is work to be done. While no amendments
were offered during mark up, Senators Judd Gregg (R-N.H.) and Hillary
Rodham Clinton (D-N.Y.) said they were unhappy with the lack of
provisions to direct student aid to low-income students, and may
offer amendments on the Senate Floor. Additionally, the Senate bill:
- increases unsubsidized Stafford loan limits for post-baccalaureate
program students from $5,000 to $7,000
- reauthorizes the federal Perkins Loan Program through 2010;
- enables the Secretary of Education to reduce the fees that
students must pay to obtain loans from 4 percent to "no less
than 1 percent and not more than 3 percent" of the amount
borrowed;
- expands Pell Grants by raising the income cutoff for automatic
eligibility, increasing the maximum grant to $5,100 for the 2006-07
academic year (subsequently increasing the maximum by $300 per
year for 5 years), and enabling students to use their awards year-round;
and
- cuts spending on the student loan programs by $7 billion and
devotes the funds to reducing the federal budget deficit.
Unlike H.R. 609, the Senate bill does not make any interest rate
changes to Stafford loans or in the area of loan consolidation.
Currently, students can borrow under a Stafford loan at a variable
rate and consolidate under the fixed rate formula both capped at
8.25 percent. On July 1, 2006, Stafford loans are scheduled to change
to a fixed of 6.8 percent.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
House, Senate Higher Ed Bills Fall Short of Savings
Targets
Proposals to reauthorize the Higher Education Act (HEA) under consideration
in both the House and Senate reportedly will fall short of the budget
savings targets mandated in the final FY 2006 budget agreement.
The FY 2006 budget resolution (H.Con.Res.
95) included instructions to both the House Committee on Education
and the Workforce and the Senate Committee on Health, Education,
Labor, and Pensions (HELP) to identify $12.65 billion in savings
over the next 5 years. Recently, the Congressional Budget Office
(CBO) scored the House Committee-approved provisions of the "College
Access and Opportunity Act of 2005" (H.R.
609) as cutting student loan expenditures by $8.6 billion rather
than the $11 billion the committee had targeted for reconciliation.
The House Education Committee will reportedly meet the week of Sept.
12 to discuss options to identify an additional $2.5 billion in
savings.
The Senate version of the HEA reauthorization bill (S. 1614), which
the Senate HELP Committee was scheduled to mark up Sept. 8, is expected
to dedicate only $7 billion to reconciliation, $5.65 billion short
of its reconciliation target. In addition to this shortfall, the
bill establishes a new mandatory program that would provide $4.5
billion over 5 years in additional awards to Pell Grant recipients
and an additional $1 billion over 5 years in grants to low-income
students who major in science fields deemed "critical to national
security." The Senate's new grant programs and funds dedicated
to reconciliation are financed by cuts close to $13 billion from
the student loan programs.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Federal Court Upholds Rejection of EST Patents
A Federal appeals court Sept. 7 issued an important ruling upholding
the U.S. Patent and Trademark Office's (PTO's) rejection of a patent
application on certain Expressed Sequence Tags (ESTs). The AAMC,
the National Academy of Sciences, and other academic and scientific
organizations had joined Eli Lilly and Company in an amicus brief
supporting the PTO's position, which has now been affirmed by the
Court.
At issue was a patent application by Monsanto scientists claiming
five ESTs, or purified nucleic acid sequences, that encode protein
fragments in maize. The application did not claim any specific genes
in maize or other organism, nor could it claim any function or other
characteristic associated with a gene to which the fragment might
relate. Monsanto argued that the five ESTs are useful as biochemical
probes or markers in further genetic research on maize.
The PTO rejected the application on grounds that it failed to demonstrate
a "specific or substantial utility" for the invention.
An appeals board within the PTO upheld the patent examiner's determination.
In Monsanto's appeal to the Court of Appeals for the Federal Circuit
(CAFC), the Court upheld the rejection of the application.
In re Fisher was closely watched as the first test case
to reach the appellate court of the PTO's enhanced threshold standard
for utility, or usefulness, of an invention, which was revised in
early 2001 after nearly a decade of controversy and discussion among
the PTO, NIH, and biomedical researchers. The revised threshold
was intended to prevent patents on relatively superficial or insubstantial
discoveries for fear that such patents might later be used to lay
claim to or tie up more significant discoveries. In its appeal on
Fisher, Monsanto's attorneys essentially argued that the
PTO had raised the bar too high.
While the CAFC did uphold the PTO's interpretation of the utility
standard, one judge on the three-judge panel dissented. Judge Randall
Rader agreed with the plaintiff that the claimed ESTs have sufficient
utility as "research tools," though he sympathized with
the PTO that its examiners lack any other effective standard for
rejecting insubstantial discoveries. "Rather than distort the
utility test," Rader argued, "the Patent Office should
seek ways to apply the correct test, the test used world wide for
such assessments (other than the United States), namely inventive
step or obviousness."
While more test cases may be in the offing, the ruling makes it
unlikely that other EST applications (numbering in the thousands)
will move ahead at this time. Rader's dissent is noteworthy because
numerous scholars have complained that CAFC decisions in recent
years had reduced the stringency of both the utility and (non)obviousness
standards of patent law.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
President to Appoint Pellegrino to Head Bioethics
Council
The White House announced Sept. 7 that the President intends to
appoint Edmund D. Pellegrino, M.D., to chair the President's Council
on Bioethics. Dr. Pellegrino is Professor Emeritus of Medicine and
Medical Ethics, a Senior Research Scholar of the Kennedy Institute
of Ethics, and Adjunct Professor of Philosophy at Georgetown University.
He is the former Director of the Center for the Advanced Study of
Ethics and founder of the Center for Clinical Bioethics at Georgetown
University. Leon R. Kass, M.D., who has chaired the Council since
it was created by Executive Order in 2001, is expected to step down
in October.
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