Newsletter Article | Feb 14, 2018

Spending Deal Clears Way for Action on 2018 Health-Care Programs

Congress began the month needing to give itself yet another time extension to agree on the spending levels for the federal agencies, departments, and programs for the current fiscal year that began almost six months ago. Without this extension, there would be another government shutdown.

This could have been done in a one-page bill. Instead, Congress got ambitious and accomplished quite a lot for a single week. 

Congress raised the spending caps for the 2018 and 2019 budgets, meaning it increased the size of the pie. Some Members of Congress have been advocating for an increase in defense spending, others for an increase in spending on domestic programs. The answer turned out to be: “Do Both.” As a result, an additional $165 billion will be spent on defense programs in the next two years and an additional $131 billion will be spent over current spending levels on domestic programs.

While there were some specifics in the deal, most of the allocations will be worked out in the coming weeks. The agreement required lawmakers to spend $3 billion to combat the opioid crisis, $2 billion on veterans, $10 billion on infrastructure, $2 billion on higher education, and $2.9 billion on child care. The bill also includes a one-time emergency allocation of $90 billion for disaster relief from hurricanes and wildfires.

In health-care spending , the bill includes additional years of funding for several important health programs: two years of renewed funding for community health centers, $6 billion in funding for the treatment of mental health issues and opioid addiction, $2 billion in extra funding for the National Institutes of Health, and an additional four-year extension of the Children’s Health Insurance Program (CHIP), which builds on the six years approved by Congress last month

The deal would accelerate the closing of the “doughnut hole” in Medicare drug coverage that requires seniors to pay thousands of dollars out of pocket before catastrophic coverage kicks in.

The community health centers section includes more than $7 billion in funding for the nation’s federally funded community health centers. The clinics that serve 27 million low-income people saw their funding lapse last fall—a delay advocates said had already complicated budgeting and staffing decisions for many clinics.

In addition, the budget deal funds programs that encourage doctors to practice in medically underserved areas, providing just under $500 million over the next two years for the National Health Service Corps and another $363 million over two years to the Teaching Health Center Graduate Medical Education program, which places medical residents in Community Health Centers.

Congress also included in the deal an increase in the debt limit, avoiding a contentious fight next month over whether to vote to allow the Treasury to borrow more money. For decades, Congress has routinely borrowed money to pay for the programs it approves. Some Members of Congress consistently vote against borrowing money, but this faction will not be a concern since the deal took the matter off the table for a year. Ultimately, however, failing to borrow money to pay for programs could lead to defaulting on debt and higher interest rates when the nation inevitably borrows in the future.

By combining all of these things into one package, the House and Senate both found enough support to pass legislation that probably would not pass in individual parts. There is something in this legislation for everyone, except Members concerned about increasing the national debt. This was a major concern for many lawmakers in recent years, but now that no longer seems to be the case.

The bill signed by the president on Feb. 9 also gives Congress six more weeks to figure out how to specifically spend these additional funds in the Fiscal Year 2018 budget.

 

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