Content Header Image

Federal Update: 5 Primary Fiscal Pressure Points for Congress

by Published On: Jan 21, 2013

We have had a bit of a respite from Congress, since the new one recessed shortly after taking office, as is traditional. However, the legislators are back this week, and the pace of advocacy is picking up accordingly.

Far from starting off with a clean slate, the new Congress is facing the same budget and spending issues and the same partisan polarization that stymied the last Congress. We see 5 primary fiscal pressure points coming up in the next couple of months:

  1. Debt ceiling.
  2. Sequestration
  3. Continuing Resolution for 2013
  4. Budget for 2014
  5. Long-Term Care Commission

Debt Ceiling

The federal government technically reached the limit on its ability to borrow as of New Year’s Eve, but the U.S. Treasury Department jiggered things so as to prevent a government default or shutdown at least through mid-February.

The debt ceiling matters to our members because if the government becomes unable to continue spending money, our members will not be paid for services they provide that are covered by federal programs.

Debate over raising the debt ceiling debate also tends to involve proposals to make major spending cuts in the hope of never having to raise the debt limit again. Because Medicare and Medicaid represent approximately 1/6 of federal spending, they tend to come under scrutiny for spending cuts when Congress agonizes over the debt ceiling.

It appears that we will have a temporary reprieve on this particular issue, as the House Republican leadership announced this afternoon that the House will pass a 3-month increase in the debt ceiling next week. While the Republican proposal originally had conditions attached, it now appears that will not be the case, which should make it acceptable to the U.S. Senate and the Obama administration. 

The premise for the 3-month grace period is to give Congress time to come up with a budget for fiscal 2014, although the chances of that actually happening right now don’t appear too promising.

Sequestration

The American Taxpayer Relief Act of 2012, which temporarily averted the so-called fiscal cliff, kicked the sequestration can down the road for a couple of months. The new date for automatic spending cuts to take effect is March 1.

Now that the debt ceiling has become a less immediate crisis, we hope to be able to focus congressional attention on responsible alternatives to the sequestration meat-axe. The good news is that no member of Congress has really wanted sequestration, since it affects essential government functions like defense along with all other programs. 

The difficult part is that there is still no agreement on how to reach the savings mandated by the Budget Control Act of 2011.

Continuing Resolution for 2013

Because the last Congress was unable to agree to a budget or any spending bills for this fiscal year, they passed a resolution to continue funding for federal programs at fiscal 2012 levels for the first half of fiscal 2013. That continuing resolution expires March 27.

The programs of interest to our members that are affected by the continuing resolution are HUD senior housing and home- and community-based services funded under the Older Americans Act.

We are concerned that when Congress considers an extension of the continuing resolution, attempts may be made to whittle down the amounts of funding these programs will receive for the remainder of this fiscal year. Section 202 housing already is receiving less than half of the funding it received in fiscal year 2010. Older Americans Act programs have been funded at the same level for a number of years.

We continue to advocate for funding increases for these programs. We point out that the population in need of affordable housing, nutrition and other supportive services is growing rapidly. People who need these services do not have a lot of resources to obtain them in the private market. Affordable housing with supportive services can help people avoid premature placement in residential settings funded by Medicaid at greater cost to federal and state governments.

Budget for Fiscal Year 2014

Normally, the president submits a budget plan for the next fiscal year on the first Monday in February. The president’s proposals become a jumping off point for congressional work on formulating a budget for the next year, and that budget becomes the foundation for spending bills.

The process has never worked perfectly, but the budget situation is especially chaotic this year. We understand that the Administration will not submit its fiscal 2014 budget until late February or early March. Given the fiscal emergencies created by sequestration and the debt ceiling, it seems like that the Administration’s budget, when it arrives, will be less of a blueprint for next year’s spending and more of a bargaining position on the current crises. It is uncertain at this point whether budget and spending decisions for fiscal 2014 will be made separately or as part of efforts to resolve the debt ceiling and sequestration.

Both parties and both houses are pretty much making budget and spending decisions up as they go along, without much regard to a larger picture or the process that normally provides a structure for timely decision-making. This lack of coherence challenges us on proactively advocating for a future of aging services agenda, since members of Congress are preoccupied with revenue and spending numbers.

Long-Term Care Commission

Members of the commission are to be appointed by the end of this month. The American Taxpayer Relief Act of 2012 allows Sens. Harry Reid and Mitch McConnell, Reps. John Boehner and Nancy Pelosi, and the Obama administration each to select 3 individuals to serve on the commission. We are advocating heavily for our board chair, Audrey Weiner, to be selected, as she is eminently qualified to help the commission develop sound and effective recommendations for the future of aging services. 

We will keep you updated on how that plays out.

Have a great week.

 



comments powered by Disqus