Congress passes two-year budget agreement:
Congress has just passed a two-year budget deal that would be significant under any circumstances and may be seen as remarkable in Washington since this city is widely regarded as being incapable of getting anything done.
The agreement, negotiated primarily and notably by House Speaker Nancy Pelosi and the Trump Administration, lifts federal spending caps for two years and suspends through July 2021, the statutory limit on the amount of debt the federal government can incur. As a result of the lifting of the spending caps, spending cuts that would have automatically occurred will now not occur, resulting in a several-hundred-billion-dollar increase in federal spending and a resultant estimated increase of about $1.7 trillion in the national debt.
The agreement also prohibits the offering of “poison pill” amendments – amendments that are designed to either defeat the underlying bill, or simply to force members of the other political party to cast difficult political votes that quickly turn into 30-second campaign ads – to subsequent spending/debt limit measures.
The agreement is a rare-in-Washington compromise: pro-defense legislators got a long-desired increase in defense spending and social welfare advocates got an increase in non-defense domestic spending. And for the next two years, the country’s financial markets will not have to worry about Washington playing politics with our credit worthiness by threatening not to extend the federal debt ceiling.
Moreover, as a result of this agreement, Congress will – hopefully – return to the practice of dealing with federal spending by passing a dozen agency-specific appropriations bills, rather than passing huge “omnibus appropriations” bills or “continuing resolutions” to fund most-or-all of the government in a single measure.
It has been decades since Congress passed all the individual appropriations bills by the statutory deadline of September 30th – the last time they did so was 1996 – and it will be a welcome return to “regular order” if they do so now. Like all compromises, this one left no one completely satisfied. Conservatives loudly condemned the repeal of the “sequester” – the automatic spending cuts – and the resultant increases in spending and the national debt. Many Democrats objected to the “poison pill” provisions. And some progressives objected to the increase in defense spending.
Conservative/Republican objections to the agreement were intense, and Democratic unity stronger. The measure passed the House by a comfortable 284-149 vote, but only 65 of the 197 GOP members voted for it, and only 16 of the 235 Democrats voted against it.
The Senate passed the bill a few days after the House, and support there was similarly lopsided. While it passed by a wide 67 to 28 margin, 23 of the 28 “no” votes were Republicans; only 5 Democrats voted “no.”
Health Care Update:
Through the multiple health care coalitions NAW helps manage, we have arranged and participated in well over 60 meetings on the Hill – this year alone – with key Committee and Member staff advocating for a full repeal of the Cadillac Tax, the Health Insurance Tax (HIT) and the medical device tax.
Cadillac Tax:
On Wednesday, July 17th, the House overwhelmingly voted to fully repeal the 40% excise tax, commonly called the “Cadillac Tax,” that will impact most employer-sponsored health insurance plans. NAW strongly supports the full repeal of the Cadillac Tax because this tax inevitably forces the reduction of employee benefits and, because of the flawed indexing provisions of the underlying Affordable Care Act, this tax will affect most plans in a few years.
Realizing the unpopularity of the Cadillac Tax, Congress has twice delayed its implementation until 2022. NAW has urged the Senate to quickly pass this legislation, fully repealing the Cadillac Tax once and for all.
Health Insurance Tax (HIT):
This year, bi-partisan legislation to delay and fully repeal the Health Insurance Tax has been introduced in both the House and the Senate to protect the 29 million small businesses and their employees from the harmful and costly impact of this tax. The HIT is a devastating multi-billion-dollar annual tax imposed on health insurance premiums that directly impacts small business owners by increasing the price they pay for providing health insurance.
As an active member of the Stop the HIT Coalition, we have urged Congress to continue working towards a common-sense approach that will ultimately repeal the tax as soon as possible to provide immediate relief to America’s small businesses. Congress has provided relief from this burdensome tax twice before and should do so again before the tax returns in 2020.
Medical Device Tax:
NAW has long fought for the repeal of the 2.3% excise medical device tax that was included in Obamacare. The tax applies to a wide range of medical equipment such as pacemakers, stents, joint replacements and surgical tools. This year, bipartisan legislation has been introduced in both the House and the Senate to fully repeal the medical device tax.
In July 2018, the House passed a bill to finally eliminate the tax, but the Senate failed to vote on the legislation. Having already been suspended twice since 2016, the latest delay is set to expire at the end of 2019. It’s time to finally end this uncertainty and fully repeal the medical device tax.
Infrastructure:
This week the United States Senate Environment and Public Works (EPW) Committee released the America’s Transportation Infrastructure Act, which authorizes $287 billion over five years in investments to maintain and repair the nation’s roads and bridges. This funding level is a 27% increase above the last “highway bill.” Of particular interest to NAW members is the increase in funding for the Nationally Significant Freight and Highway Projects program as well as a new competitive grants program to address congestion relief in the nation’s metropolitan areas.
This is only the first step, as there are several other committees in the Senate which share jurisdiction on this legislation. Additionally, according to some reports, the House of Representatives Transportation and Infrastructure Committee is predicting they will not release their version of a highway bill for several months.
Labor legislation in the House of Representatives:
The House Education and Labor subcommittee held a second hearing on the Protecting the Right to Organize (PRO) Act, which as previously reported is a smorgasbord of pro-union legislation written to increase union membership at any cost. A representative of The Coalition for Workplace Democracy (CDW), the labor focused business coalition which NAW helps manage, testified at the hearing, where he reiterated that the legislation is “a bad proposal that will hurt American workers.”
NAW continues to meet with moderate Democrats in an effort to educate them on the PRO Act. However, with the leftward turn of the Democratic party in the House of Representatives, there are still 186 co-sponsors, many of whom have admitted that this legislation is an appeal for union support in the 2020 election cycle. With the current makeup of the Republican controlled Senate, this legislation is unlikely to pass; however, should the Senate flip to Democratic control post 2020, a version of this legislation is sure be on their agenda. Click here to read more about the PRO Act.