Washington Highlights: January 29,
2010
Senate Votes to
Increase Limit on Nation's Debt
Contents
Prior Issues
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The Senate Jan. 28 approved a $1.9 trillion increase in the federal
debt limit after rejecting a proposal to form a bipartisan commission
to address the deficit. The Senate voted along strict party lines,
with 60 Democrats approving the resolution (H.J.
Res 45) and 39 Republicans opposing the measure.
The resolution raises the legal limit on government borrowing to
a record $14.3 trillion, and means Democrats will not have to revisit
the politically unpopular issue of the nation's debt before the
November elections.
Prior to the vote on final passage, the Senate adopted by a 60-39
party-line vote an amendment offered by Senate Majority Leader Harry
Reid (D-Nev.) to reinstate "pay-as-you-go" rules to require
Congress to offset increases in mandatory spending or reductions
in taxes. The Reid amendment includes $1.6 trillion in exceptions
that would allow Congress to extend expiring tax cuts and reverse
the 21 percent reduction in Medicare payments to physicians without
offsetting the costs.
The Senate rejected an amendment by Senators Kent Conrad (D-N.D.)
and Judd Gregg (R-N.H.), the chair and ranking member, respectively,
of the Senate Budget Committee, to create a bipartisan commission
to come up with ways to reduce the federal budget deficit. The vote
was 53-46, with 36 Democrats, 16 Republicans, and one Independent
voting in favor of the amendment. However, 60 votes were necessary
for passage under the procedural agreement for Senate consideration
of the resolution. Opponents of the measure, who included Senate
Finance Committee Chair Max Baucus (D-Mont.), expressed concerns
the commission would target Social Security and Medicare.
President Obama has pledged to establish a bipartisan commission
on the deficit by executive order. A group of conservative Democrats
voted in favor of the debt limit extension only after receiving
written assurances from the White House that the commission's recommendations
would get an-up-or-down vote in Congress at the end of the year.
The Senate also rejected an amendment by Senator Jeff Sessions
(R-Ala.) to reduce the deficit by establishing 5-year caps on discretionary
spending.
House Majority Leader Steny Hoyer (D-Md.) has said the House will
vote on the debt limit resolution the week of Feb. 1.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
CBO Projects "Daunting" Fiscal Outlook
The Congressional Budget Office (CBO)
projects that if current laws and policies remain unchanged, the
federal budget deficit will be about $1.35 trillion for FY 2010.
CBO issued the projections Jan. 26 in its annual report,
The Budget and Economic Outlook: Fiscal Years 2010 to 2020.
The report cautions that under current law, federal health care
costs are likely to keep growing faster than gross domestic product
(GDP)-as they have for the past 40 years. CBO's baseline projects
Medicare and Medicaid spending (excluding funding provided by the
2009 stimulus legislation) to increase at an average rate of about
7 percent a year between 2011 and 2020. In addition, the share of
the population age 65 or older will continue to expand rapidly.
As a consequence, the growth of spending for Medicare, Medicaid,
and Social Security will speed up from its already rapid rate. To
keep annual deficits and total federal debt from reaching levels
that would substantially harm the economy, lawmakers would have
to increase revenues significantly as a percentage of GDP, decrease
projected spending sharply, or enact some combination of the two.
At 9.2 percent of GDP, the 2010 deficit would be slightly smaller
than the $1.4 billion deficit (9.9 percent of GDP) in 2009. Last
year's deficit was the largest as a share of GDP since the end of
World War II, and the deficit expected for 2010 would be the second
largest. However, CBO warns that if legislation is enacted in the
next several months that either increases spending or reduces revenues,
the 2010 deficit could equal or exceed last year's shortfall.
According to CBO, the large 2009 and 2010 deficits reflect a combination
of factors: an imbalance between revenues and spending that predates
the recession and the recent turmoil in financial markets; sharply
lower revenues and elevated spending associated with those economic
conditions; and the costs of various federal policies implemented
in response to the conditions. Such policies include the American
Recovery and Reinvestment Act (P.L.
111-5) enacted in February 2009; aid for the financial, housing,
and automotive sectors of the economy; and the expansion and extension
of unemployment insurance benefits.
CBO describes the federal fiscal outlook beyond this year as "daunting,"
and projects that deficits will average about $600 billion per year
over the 2011-2020 period. The impact of these accumulating deficits
will push the federal debt held by the public from $7.5 trillion
(53 percent of GDP) in 2009 to $15 trillion (67 percent of GDP)
by 2020. CBO projects that such a large increase in debt, plus an
expected increase in interest rates as the economic recovery strengthens,
will cause the government's annual net interest spending to more
than triple between 2010 and 2020 in nominal terms (from $207 billion
a year to $723 billion) and more than double as a share of GDP (from
1.4 percent to 3.2 percent).
The report notes that CBO's baseline projections assume that major
provisions of the tax cuts enacted in 2001, 2003, and 2009 will
expire as scheduled and that temporary changes that have kept the
alternative minimum tax (AMT) from affecting many more taxpayers
will not be extended. Similarly, the baseline projections assume
that cuts in Medicare's payments for physicians' services will occur
as mandated under current law. The baseline projections also assume
that annual appropriations will rise only with inflation, which
would leave discretionary spending very low relative to GDP by historical
standards. If the tax cuts were made permanent, the AMT was indexed
for inflation, and annual appropriations kept pace with GDP, the
deficit in 2020 would be nearly the same, historically large, share
of GDP that it is today, and debt held by the public would equal
nearly 100 percent of GDP.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
President Obama Delivers State of the Union Address
President Obama Jan. 27 delivered
the State of the Union address
before a joint session of Congress. The president touched on many
issues of particular importance to academic medicine including a
freeze on domestic discretionary spending, health care reform, research,
and student loan issues.
President Obama stated that "starting in 2011, we are prepared
to freeze government spending for three years." He clarified
that "spending related to our national security, Medicare,
Medicaid, and Social Security will not be affected. But all other
discretionary government programs will." Later in his speech,
he addressed deficit spending and controlling earmarks. To that
point, he called on Congress to publish all earmark requests on
a single Web site before a vote.
Addressing health care reform, the president urged Congress, "as
temperatures cool, I want everyone to take another look at the plan
we've proposed. There's a reason why many doctors, nurses, and health
care experts who know our system best consider this approach a vast
improvement over the status quo." He called on Congress not
to walk away from health care reform and further indicated that
he would be receptive to other proposals that would bring down the
deficit, cover the uninsured, strengthen Medicare for seniors, and
stop insurance company abuses.
While President Obama trumpeted previous investments in basic research,
noting "Last year, we made the largest investment in basic
research funding in history," his speech focused on innovation
in clean energy research.
The president reiterated his commitment to end the Federal Family
Education Loan (FFEL) program. He indicated that savings from eliminating
federal subsidies under the FFEL program would be used for a $10,000
tax credit for four years of college and increasing Pell Grants.
Presumably referencing the Income-Based Repayment (IBR) program,
the president encouraged a reduction of the repayment formula from
15 percent of adjusted gross income to 10 percent, as well as reducing
the maximum loan repayment duration from 25 years to 20 years before
forgiveness. President Obama further acknowledged his support for
the Public Service Loan Forgiveness Program, authorized under the
"College Cost Reduction and Access Act of 2007" (P.L.
110-84). He also alluded to addressing rising college costs,
but made no recommendations.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
House Postpones SBIR Reauthorization Again
The House Jan. 27 voted to extend temporarily through April 30,
2010, the current authorization for the Small Business Innovation
Research (SBIR) program and other programs under the Small Business
Act and the Small Business Investment Act of 1958. Without the extension
(H.R.
4508), the programs will expire Jan. 31. Congress has approved
three previous temporary extensions, most recently in October [see
Washington Highlights,
Oct. 30, 2009], while lawmakers continue negotiating legislation
that permanently reauthorizes the programs.
Among other items, House- (H.R.
2965) and Senate-passed (S.
1233) reauthorization bills differ on whether to increase the
percentage of their budgets that major federal research agencies,
including the National Institutes of Health, must devote to the
SBIR program. [see Washington
Highlights, June
26, 2009].
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
On the Hill…
Rep. Marion Berry (D-Ark.) Jan. 25 announced
that he will not seek reelection in 2010. First elected in 1996,
Rep. Berry serves on the House Budget Committee and Appropriations
Committee, including subcommittees on Military Construction and
Veterans Affairs; Energy and Water; and Transportation Housing and
Urban Development.
Physician and fellow Arkansas lawmaker Rep. Vic Snyder (D) Jan.
15 announced
his intent to retire at the end of his term to spend more time with
his family. Rep. Snyder holds seats on the House Armed Services
Committee and Veterans' Affairs Committee, as well as the Joint
Economic Committee.
Rep. John Shadegg (R-Ariz.) Jan. 14 announced
that he also will retire at the end of the term. Rep. Shadegg sits
on the Select Committee on Energy Independence and Global Warming,
and the House Energy and Commerce Committee, including the Subcommittees
on Health; Energy and Environment; and Communications, Technology,
and the Internet.
On the Agenda in Washington…
Feb. 1: White House Fiscal 2011 Budget Release
10 a.m. (expected); Office of Management and Budget Web
site
The Office of Management and Budget will release President Obama's
budget for Fiscal Year 2011. Federal departments and agencies are
expected to hold individual budget briefings throughout the week.
Feb. 3-4: National Science Board Advisory Committee Meeting
7:30 a.m.; National Science Foundation Headquarters, 4201 Wilson
Boulevard, Arlington, VA
The National Science Board will meet
to consider pending agenda items. Please note that public visitors
must arrange for a visitor's badge in advance. Please email nationalsciencebrd@nsf.gov
with your name and organizational affiliation to request your badge,
which will be ready for pick-up at the visitor's desk on the day
of the meeting.
Feb. 3: Senate Finance Committee Hearing on President's
Fiscal 2011 Health Care Proposals
3:30p.m.; 215 Dirksen Senate Office Building, Washington, D.C.
The Senate Finance Committee will hear testimony
on President Obama's FY 2011 health care proposals from Secretary
of Health and Human Services Kathleen Sebelius.
Feb. 4-5: Secretary's Advisory Committee on Genetics, Health,
and Society
8:30 a.m.; Omni Shoreham Hotel, 2500 Calvert Street NW, Washington,
D.C.
Health and Human Services Secretary's Advisory Committee on Genetics
Health and Society will meet
to review a revised report on gene patents and licensing practices,
review a public consultation draft report on genetics education
and training and to conduct an information-gathering session on
the mechanisms and policies related to genomic data sharing. Other
agenda items include a report on activities of the Clinical Utility
and Comparative Effectiveness Task Force and updates from federal
agencies on activities related to the implementation of the Genetic
Information Nondiscrimination Act, the coverage and reimbursement
of genetic tests, the oversight of genetic testing, and the retention
and use of residual dried blood spot specimens after newborn screening.
Feb. 4: House VA Committee Hearing on Fiscal 2011 and 2012
Budget
10 a.m.; 334 Cannon House Office Building, Washington, D.C.
House Veterans' Affairs Committee will hold a hearing
on the proposed fiscal 2011 and 2012 budget for the Department of
Veterans Affairs.
Feb. 4: House Science and Technology Committee Hearing on
STEM Education
10:30 a.m.; 2318 Rayburn House Office Building, Washington, D.C.
Research and Science Education Subcommittee of House Science and
Technology Committee will hold a hearing
on strengthening undergraduate and graduate programs in science,
technology, engineering and math (STEM).
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