With a two-week recess looming and the 2012 elections coming ever more into focus, Congress addressed a temporary fix on a critical deadline and set the stage for the budget debate, tax reform and other key considerations to be taken up over the Spring and Summer as it completed its most recent work period late last week.  Much of the recent spotlight in Washington, DC, though, has been on the Supreme Court’s caseload – in particular the Court’s scrutiny of the 2010 Health Reform Law.  With Congress out of session in order to accommodate both the Easter and Passover holidays and not  returning until April 16, below is a summary of current, noteworthy news items from the nation’s Capital.

Supreme Court Hears Oral Arguments on Health Reform Law

Last week – amid much public spotlight – the Supreme Court conducted a three-day review of the Patient Protection and Affordable Care Act (“PPACA”), which was signed into law in 2010 and sought to reform the nation’s healthcare insurance system.  Three issues were reviewed by the Court, to wit:

  • whether the Anti-Injunction Act prevents judicial review of PPACA until the law is fully implemented, which is not scheduled to occur until 2014;
  • whether the law’s most controversial requirement – known as the individual mandate and requiring that each person with the financial ability to do so purchase healthcare insurance – violates the Constitution; and
  • lastly, whether PPACA might be upheld by the Court even if it should strike down the individual mandate and, if so, what provisions might continue.  

A summary follows of the events that unfolded before the Court:

Monday, March 26: On the first day of oral arguments, the Court examined whether the Anti-Injunction Act of 1867, which stipulates that lawsuits opposing the collection of a tax cannot be considered by a court before taxes are collected, raised ripeness issues for constitutionality considerations prior to full implementation of PPACA in 2014.  Not until 2014 does the law cause Americans to pay a penalty if they are uninsured.  Those then without insurance would have to so report at the filing of their income tax returns, with the penalty collected simultaneously with payment of federal income taxes.

Because neither the Obama Administration nor opponents of the bill advocated this position, the Court asked experienced Supreme Court lawyer Robert A. Long to argue in favor of a delay. 

Tuesday, March 27: On Tuesday, the Court engaged whether the individual mandate violates Constitutional limits on federal powers and authority.  While risky to predict an outcome based upon the questions asked of counsel during oral arguments, two potential swing votes in the case, Chief Justice John G. Roberts Jr. and Justice Anthony M. Kennedy, directed their questions to the Obama administration’s Solicitor General Donald Verrilli.  Challenging questions were posed about potential limits should the Court uphold the overhaul’s requirement that Americans must have health insurance. 

Wednesday, March 28: On Wednesday – the last day of deliberation over the health care law – oral arguments centered upon what the Court should do with the remainder of PPACA, if stripped of the individual mandate.  Justices appeared to question the role of the Court to decide what will happen to the rest of the law should they strike down the individual mandate.

With oral arguments concluded, the Court will begin working internally to decide all three issues.  A ruling by the Court is expected by the end of June.

Supreme Court Rules in Important Patent Case

Also last month, the Supreme Court unanimously ruled in the case Mayo Collaborative Services v. Prometheus Laboratories, that medical tests requiring a link between drug dosages and treatment are not eligible for patent protection.  Prometheus brought the case after the Mayo Clinic, initially a licensee of the relevant technology, created and began utilization of a similar procedure.  In defending itself, Mayo contended that Prometheus was seeking to guard an idea based on natural law not eligible to be protected by patent.  Writing for the Court, Justice Stephen G. Breyer said that natural laws may not be patented standing alone or in connection with processes that involve “well-understood, routine, conventional activity.”  In its response to the ruling Prometheus said that “Without the availability of patent protection, the future of health care will suffer as companies may opt out of new research and development.”  

House Budget Authorization Bill

On Thursday, the House of Representatives passed a $3.5 trillion budget plan by a vote of 228 to 191 vote.  The bill calls for reducing the federal deficit through significant reductions in domestic programs, while lowering tax rates for individuals and businesses.

The House budget plan, which was opposed by every Democrat in the House as well as 10 Republicans, will now head to the Senate where it is expected to be voted down.

In defending the measure, House Budget Chairman Paul Ryan (R-WI) said the budget represented a serious effort to address the county’s growing debt.  “We have an obligation, not just a legal obligation, but a moral obligation to do something about it,” Ryan said on the House floor Wednesday.

Contrastingly, Democrats took to the House floor to argue that the cuts outlined in the bill would devastate social programs relied on by the poor and vulnerable, like Medicaid, food stamps, and education programs.

In addition to changing Medicaid, the bill would alter Medicare, as the eligibility age would rise over time beginning in 2023 from 65 to 67.  Seniors would also be given the choice of using government assistance to purchase private health insurance plans or continue to take part in the current fee-for-service model.  However – key to containing costs, the bill would cap spending, meaning as health care costs rise, the cost burden could potentially shift to seniors.

House Budget Resolutions are an important procedural document, setting forth spending limits for appropriation bills.  With the budget now passed, Republicans in the House will now work to pass appropriations bills that outlay specific budgets for federal programs for Fiscal Year 2013.  With the Senate likely to oppose the House’s spending reductions, a shut down of the federal government remains an open possibility in the lead up to expiration of the current fiscal year on September 30.

Funding for Transportation Programs Receive Three-Month Extension

Also last Thursday – with federal funding for highway and mass transit programs set to expire on March 31, and Congress unable to reach an agreement on a long term extension, the Congress passed a 90-day funding extension.

The decision to pursue a short-term extension came only after leadership in the House and Senate were unable to bridge the divide.  The Senate had earlier passed a two-year extension that continued current funding levels, while House leadership had been urging members to support a five-year extension which would have cut overall funding for transportation projects by 17%.  The House legislation also includes a controversial pay-for mechanism that authorizes an expansion of oil and gas drilling in the United States.

In announcing the vote on the short term measure, Speaker Boehner reiterated his believe that the House would consider and pass the five-year, $260 billion measure when it returns. 

FCC Reform Passes In the House

On Tuesday, March 27, the House passed HR 3309, the “Federal Communications Commission Process Reform Act of 2012.”  The bill, which was adopted by a largely party-line vote, now moves to the Senate, where it is unlikely to be taken up by the Democratic leadership.  

The bill’s stated purpose is to improve the transparency and efficiency of the FCC (although Democrats in the House objected that the bill has a hidden agenda, which is to make it burdensome for the FCC to enact new regulations).  In particular, the legislation would impose additional steps on the FCC before it could propose or adopt changes to its rules and would prevent the FCC from taking action based on statistical reports or “ex parte” communications that had not previously been made available to the public.  Other noteworthy elements of the legislation include (i) revising the “Government in the Sunshine” requirements so that three or more Commissioners could meet privately subject to various limitations and requirements regarding who can attend such a meeting and provided that a record of the discussion during the meeting is kept and published and (ii) the adoption of a procedure whereby the Commission’s agenda and calendar, which currently are controlled by the FCC Chairman, could be altered by a bi-partisan majority of the Commission. To address some of the concerns addressed by Democrats, the bill was amended on the floor to provide that none of the new obligations shall impede the FCC from acting in times of emergency to ensure the availability of weather alert information or communications systems for first responders.  Yet, even as amended, only 12 Democrats voted for the bill, while no Republicans voted against passage.

Activity on Cybersecurity Expected

When Congress returns from its two-week Spring recess, the House is also expected to move several pieces of legislation relating to cybersecurity reform.  Committees are expected to hold markups on HR 3674, the Promoting and Enhancing Cybersecurity and Information Sharing Effectiveness Act of 2011 (“PRECISE”) as well as legislation amending the Federal Information Security Management Act (“FISMA”).  Both bills are expected to pass and be considered on the House floor the week of April 23, along with H.R. 3523, the Cyber Intelligence Sharing and Protection Act of 2011, legislation that passed on an overwhelming, bipartisan basis out of the House Permanent Select Committee on Intelligence in December.