With the Republican primary all but settled, Congress has approximately three months – a very narrow window of time – to resolve a host of issues before adjourning for the November election. Among the issues on Congress’ plate are: approving a budget for Fiscal Year 2013, reauthorization of FDA user fees, reauthorizing funding for federal transportation programs and addressing student loan rates. Ever looming behind each of these considerations and the entire Congressional agenda are an ongoing rancorous dialogue and partisan positioning around generational fiscal considerations, revenue needs, spending cuts and tax rates and reform.
Below is information on all of these issues.
FDA User Fee Legislation Makes Gains in Both Chambers
On Thursday, the Senate overwhelmingly approved a five-year reauthorization of the Food and Drug Administration’s user fee programs, overcoming a vigorous debate on a controversial drug importation amendment that had support from members of both parties.
After days of debate, the bill that would renew the FDA’s programs that help fund reviews of prescription drugs and medical devices passed 96-1. The measure also would create user fee programs for generic drugs and generic biologic drugs. The bill’s highlights include:
- Breakthrough Potential: Allows the FDA to speed up the approval of drugs that appear to have breakthrough potential by limiting requirements. The agency would also be able to approve drugs based on smaller, shorter clinical studies, in order to accelerate approval of innovative medicines for life-threatening diseases.
- Non-government Inspectors: Permits drug companies to use non-government inspectors to visit factories and assess whether they are meeting U.S. quality standards – of importance is that such visits and assessments would not take the place of routine FDA inspections.
- Device Approval: Should the FDA decide to reject a low-risk medical implant, the agency is required to provide a rationale for such a decision within 30 days.
Despite the substantial support for the bill, it was almost undone when Senator John McCain (R-AZ), offered a proposal along with Senator Sherrod Brown (D-OH), that would allow the importation of lower-cost prescription drugs from Canada. The amendment was ultimately rejected 43-54.
FDA User Fee legislation is advancing in the House as well. Earlier this month, the powerful House Energy and Commerce Committee approved similar legislation by a 46-0 vote. Passage in the House is expected in June.
House Passes GOP Budget Plan to Protect Defense Spending
Also earlier this month, the House of Representatives passed legislation that prevents scheduled deep spending cuts in defense spending set to take effect in January, 2013, and replaces those cuts with new reductions to a host of social programs, including health care and food stamps.
The bill, which passed 218-199, mostly along party lines, would cancel $98 billion in automatic cuts to discretionary funding set to take effect in January 2013, as a result of the debt ceiling agreement between the Congress and White House in August 2011. Those cuts include $55 billion to military spending.
In it’s place the House approved cutting non-defense programs through a process it calls reconciliation, which would save $310 billion over a decade if the legislation were enacted by October 1. Those cuts are aimed largely at domestic social programs such as Medicaid, Medicare, and programs for the poor including:
- Reducing nearly $34 billion in spending over the next 10 years on the Supplemental Nutrition Assistance Program, formerly known as the food stamps program;
- Cutting $16.7 billion by repealing the Social Services Block Grant;
- Saves $49 billion by reducing or eliminating funding programs and activities created by the 2010 health care overhaul, including the Prevention and Public Health Fund and aid to states for creating health insurance exchanges, and by reducing Medicaid funding for certain programs and activities;
- Saves $31.1 billion by modifying the Dodd-Frank Wall Street Reform law to terminate the government's authority to unwind failed non-bank financial institutions and eliminate automatic funding of the Consumer Financial Protection Bureau and by terminating the administration's Home Affordable Mortgage Program (HAMP);
- Saves $48.6 billion by capping non-economic and punitive damages, limiting attorneys fees and placing other restrictions on medical malpractice lawsuits;
Work Continues on Transportation Bill
After several weeks with little progress, Senator Barbara Boxer (D-CA), Chairwoman of the Environment and Public Works Committee, announced this week that members of the conference committee charged with negotiating differences between the House and Senate versions of the reauthorization of the transportation bill have reached agreements on several sensitive provisions including extension of road, bridge and public transportation programs through fiscal 2013.
The compromise being discussed would consolidate 90 Department of Transportation programs into 30. It would also eliminate all earmarks, which were a key component of previous transportation measures. The bill would also significantly expand the Transportation Infrastructure Finance and Innovation Act program, which allows localities to leverage federal loan guarantees with private financing. According to Boxer, the program will grow from about $100 million to $1 billion.
While this progress is good news, still under debate are the mechanisms which will be used to pay for the bill. The House passed bill included provisions expediting the Keystone XL Pipeline and prohibiting EPA from regulating coal ash as hazardous waste and allow the states to design their own standards for coal-ash storage. Senate Democrats and President Obama have promised to oppose the inclusion of such language.
Preventing Student Loan Rate Hike Becomes Controversial
One of the few areas agreement between President Obama and Presumptive GOP nominee Mitt Romney, preserving the current student loan rate, has suddenly become a partisan wedge in Congress. The current rate for federally guaranteed student loans is 3.4 percent, but without Congressional action, the rate will jump to 6.8 percent on July 1st.
In April, both President Obama and Romney called for Congress to take action to prevent the increase. Since then, however, Republicans and Democrats in both the House and Senate have been unable to agree on how to pay for such a measure.
The Senate on Thursday rejected two bills that would have prevented an increase in student loan interest rates. The Senate first voted down the GOP sponsored bill, by a vote of 34-62. That bill would have paid for the patch by eliminating a preventive health care fund in the 2010 health law (the House passed this bill in April). Next, Majority Leader Harry Reid (D-NV) offered legislation paying for the one-year interest rate extension by eliminating a tax preference for S corporations. That bill fell 51-43, when Democrats could not muster the 60 votes necessary to overcome the Republican filibuster.
With just over a month remaining before the rates increase, it is quite possible that this issue may not be resolved until the 11th hour as Democrats and Republicans continue to spar over how the extension is funded.