For the first months of united Republican governance in Washington, the new administration and Congress accomplished little: confirmation of a new Supreme Court justice, repeal of some late Obama-era regulations, and reform of the Department of Veterans Affairs. The failure to repeal and replace the Affordable Care Act, despite seven years of promises lingers as a signal failure of Republican administration. And now, with apologies to T. S. Eliot, September is looking to be the cruelest month. The September work period will be a critical test for the President and the Republican majority in Congress, as members return this week to face a daunting workload of time-sensitive legislation with only three weeks within which to get it all done.
Congress must pass a measure to keep the government funded beyond the end of the current fiscal year, which ends on September 30. Congress also faces a September 29 deadline to raise the nation’s debt limit and avoid default. Now, on top of these two controversial items, Congress will have to make an initial down-payment on relief for Houston and parts of Texas and Louisiana in the wake of Hurricane Harvey.
Beyond keeping the government open and able to pay its debts, Congress will need to renew the authorizations for a number of important federal programs that are set to expire at the end of this month, adding pressure to a time-limited legislative calendar. Finally, Republicans are also eager to pass a budget resolution is order to enable the use of the reconciliation process, which is the most likely path forward to enacting some version of tax reform.
Republicans in Congress are divided on how to go about raising the debt ceiling. Treasury Secretary Steven Mnuchin has asked for a “clean” debt ceiling increase, one that does not come with any policy riders or conditions. Members of the House Freedom Caucus, on the other hand, want to pair any increase in the debt ceiling with spending cuts, which are not agreeable to more moderate Republicans and will certainly be opposed by Democrats. In the Senate, where Republicans hold a slim majority, a measure to lift the debt ceiling will need the support of at least eight Democratic members in order to pass. Senate Majority Leader Mitch McConnell has stated “there is zero chance” Congress does not succeed in increasing the debt ceiling, and House Speaker Paul Ryan, who favors a clean bill, has separately and repeatedly given positive assurances that the debt ceiling will be raised before the end of the month.
There is speculation on Capitol Hill that a measure to increase the nation’s borrowing authority could be paired with a funding bill that will be needed to avert a government shutdown when the current fiscal year ends on September 30. The new, urgent need to begin to provide disaster relief to the communities inundated by Hurricane Harvey could also find such a bill to be a convenient legislative vehicle. A bill that funds that government for several weeks, or months, raises the debt ceiling, and makes a down-payment on Harvey relief would likely command majorities in both chambers. Such a package would allow Congress to address simultaneously its most pressing issues on the September agenda.
Although this path would appear to contain something for everyone, nothing comes that easily these days in Washington. While there is little appetite among congressional Republicans for a government shutdown to start the new fiscal year, President Trump has complicated the process by threatening to veto any funding bill that does not provide the funds requested by the Administration for construction of a border wall with Mexico. Congress may be able to sidestep the veto threat for the stopgap funding measure it will consider in September, but if the issue is avoided this month it will certainly return when Congress tackles a spending bill for the rest of the fiscal year, probably in December. Democrats are united in their opposition to the border wall funding, and a number of Republican members are opposed, as well, which sets up a difficult task for congressional leadership. Earlier this year, President Trump made similar demands for border wall funding during debate over the remainder of FY 2017 appropriations, but was appeased by the eventual bill that included other enhancements for border security. Recent comments by some House Republicans suggest that the fight over the border wall will be put off till December, a tip of the hat, perhaps to the need to come up with emergency funding for Harvey victims.
Rumors surrounding the potential that the administration will revoke President Obama’s Deferred Action for Childhood Arrivals program, which allowed persons who are in the country illegally but were brought here by their parents when they were children to remain in the country and work or attend school, may provide one path to resolving the issue of border-wall funding. Some are suggesting the President could trade support for legislation protecting the same population in return for wall funding. At the moment, both the White House and congressional Democrats reject such a package, as do immigration restrictionists, who might be willing to support legislation protecting those brought illegally to the country as minors but whose price is not a border wall but more stringent restrictions on legal immigration to curb family-based and unskilled immigrants from coming legally.
While these issues play out, the House of Representatives will forge ahead on its appropriations work for FY 2018. The chamber has already passed four of the 12 annual appropriations bills, and during its first week back in session members will take up the remaining eight appropriations bills as one package. H.R. 3354, the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2018, will serve as the legislative vehicle for the remaining appropriations bills, subject to a rule. House Republicans plan to bundle this package of bills with the two packages into a single omnibus measure for FY 2018. Despite this work, it is highly unlikely that the House legislation would ever become law. The discretionary funding levels established in the legislation would exceed the limits set by the Budget Control Act (BCA). Democrats oppose these spending levels, as well as many of the policy riders included in the legislation. The support of eight Democratic members of the Senate would be necessary in order for the House legislation to pass. It is a forgone conclusion that House and Senate leaders and appropriators will have to negotiate a bipartisan agreement for FY 2018 spending, as they did in 2013 and 2015. How much time they have to work out the details will depend on the duration of the stopgap funding measure the House and Senate are able to adopt this month. Most observers think the stopgap bill will fund the government until December, allowing time to try to negotiate a spending deal for the balance of the fiscal year.
Beyond requiring emergency relief funding, the flooding caused by Hurricane Harvey is a blunt reminder that Congress must reauthorize the National Flood Insurance Program (NFIP) before it expires on September 30. The program, administered by the Federal Emergency Management Agency, helps homeowners obtain flood insurance, which is not otherwise provided by private insurers. The policies are heavily subsidized, and the program has been under intense scrutiny following its handling of claims following Superstorm Sandy in 2012 and a ballooning $25 billion debt. Numerous members have called for reforms, including proposals for privatization, to the program. Texas Republican Jeb Hensarling, Chairman of the House Financial Services Committee, is calling on Congress to pass a package of seven NFIP-related bills approved by his committee in late June to reform the program and reauthorize it for five years. There is opposition, however, to Chairman Hensarling’s legislation, with opponents arguing that the reforms would increase deductibles for policyholders and limit coverage. The debate over the issue tends to be less partisan and more geographic, with members’ positions determined by their states’ tendency to flooding. The Senate Banking Committee is also reportedly working on a draft bill, and some of its members have already introduced their own legislation, but the committee has not yet acted on a bill. Given the extensive damage already sustained in Texas and with a few months left in the Atlantic hurricane season, there may be enough public pressure for Congress to act before the deadline on either a less polarizing version of the Hensarling legislation or a short-term extension of current authority, allowing members more time to debate a long-term measure that will resolve the financing issues while maintaining affordable coverage.
Congress must also act in September to reauthorize the Federal Aviation Administration in order to ensure its authorities and funding do not lapse after September 30. Committees in both chambers have been hard at work on developing legislation, but their proposals differ significantly in some areas. House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) introduced the 21st Century Aviation Innovation, Reform & Reauthorization (AIRR) Act, a six-year reauthorization bill which contains a controversial proposal to privatize the country’s air traffic control (ATC) system, a move supported by President Trump and included in his first budget submission to Congress. The full committee voted to approve Chairman Shuster’s legislation on a party-line vote, 32-25, but the proposal has yet to be considered by the full House because it does not appear to have enough support for passage. A bipartisan proposal has emerged in the Senate, where Commerce, Science, and Transportation Committee Chairman John Thune (R-SD) and Ranking Member Bill Nelson (D-FL) have introduced a four-year reauthorization bill that does not privatize ATC operations. The bill was approved and reported to the Senate by the Committee on a voice vote. Chairman Thune has acknowledged publicly that there is insufficient support in the Senate for the ATC privatization. With little time to conference the two measures and a lack of consensus over the ATC privatization provision, Congress will likely move to enact a short-term extension of current authority until a long-term solution can be negotiated. Rep. Sam Graves (R-MO), Chairman of the House Transportation & Infrastructure Subcommittee on Highways and Transit, has told the press that the drafting of a short-term extension measure is already underway.
Also set to expire on September 30 is the funding for the Children’s Health Insurance Program (CHIP). The popular program, which enjoys broad, bipartisan support, is a major source of healthcare coverage for children nationwide, providing insurance to more than 8 million children from low and middle-income families. Funding was last reauthorized by Congress in 2015, by a vote of 392–37 in the House and 92–8 in the Senate. Due to the bipartisan support, there is optimism for quick action in both chambers, but legislation has yet to be introduced in either chamber. Members of relevant committees will have to determine the length of the reauthorization and whether any additional proposals will be attached. (The reauthorization passed in 2015 was part of a larger Medicare program reform package.) The CHIP reauthorization may be paired with a provision to continue funding for federally qualified health centers (FQHCs), community-based health care providers that receive federal funds to provide services in underserved areas; this program is also set to expire on September 30. Another possible hitchhiker on the CHIP renewal is a package to extend several Medicare provisions that are scheduled to expire in December. Congress will also have to decide whether to include CHIP provisions that were instituted through the Affordable Care Act (ACA), including a 23 percent increase in the federal matching rate that states receive for CHIP and a “maintenance of effort” requirement for states to maintain current Medicaid and CHIP eligibility standards for children until 2019. President Trump’s FY 2018 budget proposal to Congress eliminated both of these CHIP policies, and their inclusion could spark a renewed debate over the ACA.
Another healthcare deadline will also draw the attention of Congress during this work period. Insurance companies have until September 27 to notify the federal government of the insurance plans they intend to sell on the public health care exchange for 2018, which could affect upwards of 18 million Americans who purchase their coverage on the individual market. Despite the failure to repeal and replace the ACA earlier this year, there appears to be a bipartisan effort underway to provide legislative fixes to the ACA aimed at stabilizing the individual insurance market and ensuring that premiums are affordable. A bipartisan caucus in the House of Representatives, the Problem Solvers Caucus, has endorsed an outline of proposals to address ACA issues. On the Senate side, Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) have announced plans to begin working on legislation to stabilize the markets. To initiate this effort, the HELP Committee has announced two separate hearings this week: one featuring several bipartisan governors and another comprised of state insurance commissioners. The hearings will focus on stabilizing health-exchange premiums and affordability for constituents who depend on the individual market for healthcare coverage. While it would be ironic for Congress to coalesce behind a bipartisan healthcare proposal to reform portions of the ACA in a year that has been so sharply divided over GOP efforts to repeal and replace the legislation, the chances for passage are still slim. Speaker Ryan’s office has stated that “he remains focused on repealing and replacing Obamacare,” and President Trump has publicly expressed his view that Congress should let President Obama’s signature law “implode.” Still, a package of minor legislative fixes that are acceptable for members of both parties, perhaps attached to a CHIP reauthorization measure, might provide a small victory for bipartisanship in an otherwise contentious and chaotic September.
While Congress navigates these must-pass measures, GOP leadership in the House will start laying the groundwork for one of its major legislative priorities, comprehensive tax reform, later this fall. Last week, the House Budget Committee released its FY 2018 budget resolution. Adoption of a budget is a necessary precondition to a reconciliation bill, a budgetary tool that will allow the tax bill to pass the Senate with only a simple majority, rather than the traditional cloture-proof 60-vote threshold. Without the budget resolution, Republicans would need some Democratic support in order to pass the tax overhaul, but that path is highly unlikely. The House Budget Committee is set to consider the FY 2018 budget resolution on Wednesday. Even if the measure is approved by the committee, it is unclear whether there is enough Republican support to pass it through the full House of Representatives, or when it would be scheduled for floor action, given the already-long list of items on the September agenda. Senate Republicans have yet to draft their own budget resolution for FY 2018, but given the likely need for a reconciliation vehicle, the budget resolution provides one more agenda item for an already too-busy month. Failure to adopt a budget resolution could complicate tax reform by requiring Republicans to pick up Democratic votes in the Senate, and that need would likely produce some version of legislation to reduce some taxes rather than legislation to reform the tax code.
Beyond these issues, the Senate also has nominations to consider, with an unusual number of executive branch positions still unfilled, either with nominees pending in the Senate or still awaiting nominees.