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Balance of Power in the US Senate will Change Agenda

The first election of 2010 is over and the balance of power in the US Senate has shifted just enough to put the Administration’s policy agenda in jeopardy.  Senator-Elect Scott Brown (R-MA) will be the newest member of the Senate, and will be sworn in as soon as the election is certified.  Clues on how the agenda will be impacted and how political power has changed will come in the President’s state of the union address scheduled for January 27th.   The White House has signaled that the President will likely talk about jobs, fiscal responsibility, Iraq, Afghanistan, and terrorism.

Senate Republicans have already stated that they are more committed than ever to opposing President Obama’s health care agenda, citing the GOP victory in MA as validation of their political strategy and policy course.  Top Republicans said Brown’s performance in the overwhelmingly Democratic state confirms public surveys showing wide discontent nationally with the Democrats’ leadership and policies, and they remain confident that success in the upcoming midterm elections hinges largely on their opposition to health care.

While Brown’s victory could have a negative effect on health care reform, other parts of the Democratic agenda may survive.  Democrats’ six month reign with a 60-vote super-majority is over, but a smattering of Republicans may be willing to play ball on their own pet issues, giving the President and the Democrats at least a theoretical shot at passing some form of financial reform, an energy bill – without cap-and-trade – and a watered-down deficit-reduction package.  Immigration reform is also likely a casualty of the change in power in the Senate.  But Republicans – no longer free to stand by while Democrats muster their own 60 votes – may help out on war funding and other national security issues.

Here’s the outlook for seven major agenda items that Democrats hoped to move in 2010.

1. Financial reform:  One of the President’s biggest legislative issues in 2010 is expected to be an overhaul of financial regulations already approved by the House.  There are enough Republicans who support cracking down on the financial industry that caused – in part – the economic meltdown.  But Democrats will likely moderate on two issues in order to get legislation passed.  First, the proposed consumer financial protection agency is not popular with most Republicans and may be removed from the debate.  Second, Democrats may have to modify the President’s proposed bank fee, which Republicans have labeled “just another tax.”

2. Deficit reduction:  In 2009, we watched Congress approve a $700 billion bank bailout, a $787 billion stimulus, and debate a $1 trillion health care bill.  Now Democrats find themselves in a bad public relations position on deficit spending.  They have recently started working on a deficit reduction project but it is unclear at this point how seriously they will work on this in 2010.  The good news is that there is a bi-partisan group of Senators committed to working on the issue.  The bad news is that the Appropriations Chairs, who don’t like even the slightly question about their “power of the purse” will likely try to block attempts to reduce spending.  The most likely outcome is some sort of blue-ribbon commission that will be charged with making recommendations back to Congress.  This will “punt” this issue down the field for at least a year.

3. Cap and trade/Climate Change/Energy Legislation:  Most pundits agree that cap-and-trade legislation is dead for this year.  If Democrats dump that provision and focus on a more modest climate and energy bill, they’ve actually got a shot at getting something done in 2010.  Even before the election in MA, moderate Democrats were pushing Senate leadership to drop the cap-and- trade provision in favor of an energy-only bill, which could include renewable fuels standard tax incentives for alternative energy.

4. Terrorism and national security:  With the Christmas Day terrorism attempt, Republicans believe they have an opportunity to reclaim their dominance on national security with the American public.  However, the President’s approval ratings on terrorism and national security have gone up since the attempt so Democrats could win Republican support if they push for significant changes in airline security and intelligence gathering.  All indications are that they will do this and receive bi-partisan support.

5. Immigration Reform:  Any attempts to revise the debate on immigration reform seem all but impossible in the new environment in the Senate.  Even before the GOP victory in MA, the Senate Democrats did not have the 60 votes to pass a reform measure.  The White House floated a trial balloon last month saying that some immigration bill could get done this year, but there is no clear path forward on how (or whether) to create a path to citizenship that opponents won’t see as an attempt to provide amnesty for illegal immigrants.

6.  Health care:  Most pundits this morning are predicting that the GOP win in MA puts health care reform on hold – mostly because that win denies Senate Democrats the 60 votes they need to break GOP filibusters and the growing resistance from rank-and-file members to pressing ahead with the current bill.  Some Democratic leaders nevertheless vowed to enact health care legislation, although the path to do so will be much more difficult now.  The options are few, and extremely complex, mostly involving legislative tactics that would be difficult to pull off in the best of circumstances.  One option includes paring the bill down to something that has wide bipartisan support, trying to attract a handful of GOP moderates to support the measure or trying to move a compromise quickly, before Senator-Elect Brown is sworn in.  Under another scenario being discussed, budget reconciliation could finally play a role — with the House initially adopting and clearing for the President the Senate-passed health care bill and then sending to the Senate a set of Democratic negotiated compromises under budget-reconciliation procedures. Legislation considered under budget reconciliation cannot be filibustered, and needs only a simple Senate majority for passage.  But several House members have already indicated that they’re not prepared to pass the Senate bill alone – even if it means health care reform would die.  This issue is extremely fluid right now so more to come later.

7.  Appropriations/Spending:  The GOP win in MA is also likely to have a major impact government spending and fiscal discipline.  With the November general elections on the horizon, that will give pause to many Democrats in conservative states and districts as Congress this year considers President Obama’s fiscal 2011 budget and lawmakers work on appropriations bills.  It also probably means that Obama will redouble his efforts to emphasize administration efforts to restore fiscal discipline, which will be spotlighted both in his State of the Union address next week and in the new budget he will submit to Congress on February 1st.  Democrats certainly will highlight any agreement they eventually reach on restoring pay-as-you-go rules into law and on forming a commission to make recommendations on reducing future deficits and debt, but it’s unknown whether their response will translate into tighter constraints on spending this year.  The White House and most Democrats argue the economy is too fragile to begin making any significant cuts now.

Majority Leader Unveils Senate Health Care Bill

Last night, Senate Majority Leader Harry Reid (D-NV) released the long awaited health insurance reform package that merges bills advanced by the Senate Health, Education, Labor and Pensions (HELP) Committee and the Senate Finance Committee. The Congressional Budget Office estimates that the legislation, the Patient Protection and Affordable Care Act (H.R. 3590), would cost roughly $848 billion over 10 years and to extend coverage to 31 million people by 2019. However, it would leave 24 million without coverage.

Full Bill: HR 3590 Patient Protection and Affordable Care Act

Senator Reid’s bill includes a public insurance option with a state opt-out, and creates state-based insurance exchanges to expand access to affordable insurance and create new non-profit co-ops. Initial procedural votes on the legislation could take place as early as this weekend. Analysis of the Senate health reform legislation will be available momentarily.

Update from Washington, DC

The House and Senate continue to negotiate a health care reform bill, which has left some open time for both chambers to consider FY10 appropriations bills.  The first order of business this week will be to extend the current continuing resolution (CR) for most federal agencies since the current CR expires on Saturday, October 31st.

FY10 Appropriations

Last week congressional leaders discussed including the extension into the conference report on the Interior-Environment appropriations bill, similar to how the original one-month CR was added in conference to Legislative Branch spending bill.  They decided against this path forward likely because the Interior bill may face controversy over unrelated provisions.  The CR extension is expected to go to December 15th, a little more than a week before Christmas.  To date, Congress has completed action on just four of the 12 spending bills for the fiscal year that began on October 1 (Agriculture, Energy & Water, Homeland Security, and Legislative Branch).  The UW has secured two earmarks in the Energy & Water bill.  The first is a $1 million mark for biofuels work and the second is $880,000 for accelerating research on tidal energy production.

The Interior-Environment appropriation bill is scheduled for House action this week if an agreement can be reached on one controversial provision related to EPA regulation of vessel emissions on the Great Lakes.  The UW College of the Environment stands to gain a $4 million earmark in that bill to conduct, compile, and disseminate research on how best to restore and protect the Puget Sound.

The House is also scheduled to consider a bill that would reauthorize Small Business Administration (SBA) programs that provide entrepreneurs with access to capital.  The legislation is a combination of eight bills that would extend some stimulus programs that allowed the SBA to increase loans, provide more capital to low-income areas and renewable-energy industries, and make loan guarantees to small health care firms purchasing health information technology.

The Senate may try to take up the Commerce-Justice-Science bill after pulling it from floor consideration last October 13th after Democrats failed to come up with enough votes to limit debate and amendments to the bill.  One amendment that is holding up progress would require the 2010 Census to include questions about citizenship and immigration status, which is opposed by the Obama Administration.

Meanwhile, the Senate will focus on the economy this week and try to finish a bill that would extend unemployment benefits.  The measure would provide an additional 14 weeks of benefits to unemployed individuals nationwide and would give six more weeks on top of that to states with a three-month average unemployment rate of at least 8.5 percent.  The Senate may also take up its FY10 Military Construction-VA appropriations bill.

Because the appropriations process has been slow this fall, mostly due to the health reform debate, Congress is now thinking that a year-end omnibus bill may be necessary to complete the remaining FY 10 appropriations bills.  Additionally, the remaining appropriations measures may be used to enact further legislation to help the unemployed and boost job creation.

Health Reform

Debate on health care reform is not expected to begin until next week at the earliest, as Democratic leaders in both chambers are still trying to finalize the legislation they intend to bring to the floor. The House hopes to release their renegotiated health reform measure this week so that they can vote on the package by November 6th.  It is possible, that the House will work through that weekend and into Monday and Tuesday before taking a small break for Veterans Day. 

Unveiling the bill would answer questions about the shape of the public option and clear the way for final decisions on how to raise revenue to pay for it.  While House liberals are looking for a public plan based on Medicare rates, House Leaders are leaving room for moderates’ preferred version after Senate Democrats indicated they were likely to include a public option in their overhaul.  Leaders still have a few thorny issues to resolve before they introduce a bill, such as questions about abortion services, insurance for immigrants, cost of medical devices, and hospital payments.

Meanwhile, the Senate continues to work on merging the two reform bills from the Senate Finance and HELP committees, and appears to be moving toward a stronger public option than currently included in the Senate Finance Committee bill.  Senate Democratic leaders have other issues to resolve, including whether the final bill would include an employer mandate; a long-term insurance program for those who become disabled; financing to make up for revenue lost by increasing the value of plans considered high cost that would be taxed under the bill; and how to make premiums more affordable since individual coverage will be required by law.

Energy and the Environment

The Senate Environment & Public Works Committee will hold three days of hearings this week on a revised draft of climate change legislation the panel is looking to mark up soon.  On Tuesday, the committee will hear from five administration officials – Energy Secretary Chu, Interior Secretary Salazar, Transportation Secretary LaHood, EPA Administrator Jackson, and Federal Energy Regulatory Commission (FERC) Chairman Wellinghoff.

Last week, the House passed legislation that would lead to the creation of a federal research strategy for solar energy.  The bill (HR 3585) directs the Energy Department to establish a Solar Technology Roadmap Committee, which would develop a comprehensive federal solar research plan.  Bill supporters noted rapid growth in solar manufacturing by European nations and China in recent years.  The bill would authorize $350 million for the Energy Department in fiscal 2011, rising to $550 million in fiscal 2015, for a total of $2.25 billion over the five-year period.  Some members expressed concerns about the high cost of the bill even while supporting the underlying goals.   

The roadmap committee created by the bill would include at least 11 members appointed by the Energy secretary within four months of the bill’s enactment.  At least one-third of the members — but not more than half — would be required to come from the solar industry.  The bill also would require the appointment of a chairman from outside the federal government.  Within 18 months of enactment, the committee would be required to chart a course for research, development, and demonstration activities between the federal government and the private sector.  The Energy secretary would be directed to award merit-based grants for projects, with an emphasis on solar manufacturing research performed by industry-led consortia.

FY11 Appropriations

Today is the deadline for submitting proposals for the FY11 federal agenda.  Proposals will be reviewed and evaluated over the next several weeks.  In January 2010, the Office of Federal Relations will share the results of that work when we present our FY11 Federal Agenda.  If you have any questions about this process, please contact me or Jonathan Nurse.

Health Reform Legislation Passes Finance and Delays Student Aid Reform

Yesterday, 10/13/09, the Senate Finance Committee approved a health reform package on a largely party-line vote of 14-9, with only Senator Olympia Snowe (R-ME) crossing the partisan divide. The vote in Senate Finance was the last of the five House/Senate committee (3 House committees, 2 Senate Committees) votes before consideration by the chambers.  Leadership and select members of the committees of jurisdiction will need to work together to merge bills that have been produced. In the Senate, the reform package will need to clear 60 votes to avoid a filibuster, while in the House only a simple majority is needed. At present, a public insurance option appears to be the major point of contention between the more conservative version of reform produced by the Senate Fiance Committee  and legislation advanced by the Senate HELP Committee and the House. After bills pass the Senate and House, differences will again need to be worked out between the chambers so that a single bill can be sent to the President.

Passage of health care reform may be linked to the student aid overhaul that was approved in the House over the summer. If Senate Democrats are unable to pull together the 60 votes necessary to pass health care reform, they may tie the legislation to the student aid bill in the form of a budget reconciliation package that would only require a simple majority to pass. As a result, the Senate companion to the House (H.R. 3221) student aid bill is currently awaiting further developments on the health care reform front. The University of Washington, and much of the higher education advocacy community, is using the extra time allotted for the student aid bill to seek some improvements in the legislation.

Update from Washington, DC

The congressional agenda this week will sound familiar to those who have been following the action:  Both chambers will focus on appropriations measures as the fiscal year winds down on September 30th, and Senate and House committees will continue to resolve differences on health care reform proposals.

Appropriations

Congress has until Wednesday night to pass a continuing resolution (CR) to keep the government running when FY10 starts on Thursday. The CR being discussed in the Senate would give lawmakers in that chamber 30 days to finish work on the FY10 spending bills.  But the healthcare measure is also expected to come to the floor within a few weeks so many believe an additional extension will likely be needed.

The CR is needed to give lawmakers additional time after the end of the fiscal year Wednesday to complete the 12 annual appropriations bills.  The House has finished work on all 12, while the Senate has completed only five.  It is close to wrapping up work on the FY10 Interior-Environment Appropriations bill.  Under the CR, most government programs will be funded at FY09 levels, with a few exceptions such as veterans’ health care and the Census Bureau.

Meanwhile, the House will take up conference reports on a handful of spending bills this week if House and Senate differences over earmarks can be resolved. The controversy rests with earmarks designated for private, for-profit entities.  In response to complaints that earmarks are a source of corruption, House appropriators added provisions to their appropriations bills requiring that earmarks to for-profit entities undergo a competitive bidding process.   The Senate, however, did not agree with this move.  Late last week, House and Senate leaders reached an agreement:  House earmarks designated for private, for-profit entities will be competitively bid, Senate earmarks will not, and those earmarks that are listed in both bills will not be competitively bid this year but will in future years.  One thing is certain, the earmark process will continue to morph as congress injects more and more transparency into the process.

Overall, Democrats plan to spend $75 billion, or 7 percent, more in fiscal 2010 than they did in fiscal 2009 on the 12 annual spending bills, not including emergency spending.

The Office of Federal Relations continues to monitor the earmarks that we have secured in the House bills.  The next hurdle is to protect those earmarks as they move through the conference negotiations. 

Health Reform

The health care debate will continue to take center stage in both chambers as lawmakers continue to look for a path forward.  Senate leaders continue to say that a health bill could be on the floor by the end of the week.  While that timetable appears unlikely, it is clear Democrats want to move the bill as soon as possible, with one of the unknowns being how long it will take congressional budget office to score a bill once versions crafted by the two committees – Finance and Health, Education, Labor and Pensions (HELP) – are merged.

The House continues to push toward having a single bill crafted from the work of three committees, which they hope to have finalized by the end of the week and ready for floor action the following week. 

The Office of Federal Relations is working closely with the health sciences schools (medicine, dentistry, nursing, public health, etc.) to protect graduate medical education funding and ensure that programs and grants being proposed through health reform have a positive impact on those entering the health professions.

As always, please let us know if you have questions or would like to discuss how to engage the congressional delegation with your issues and concerns.

Best,

Christy Gullion, Director