LEGISLATIVE WRAP-UP FOR 2005

December 28, 2005

Congress adjourned on December 22, capping a frantic finish to a tumultuous year.  In its last official act, Congress extended the USA Patriot Act for five weeks shortly after it adopted the Defense Department appropriations bill, a measure that also contained funding for avian flu prevention, hurricane relief and reconstruction, the Labor-HHS-Education appropriations bill and a one percent across-the-board reduction to discretionary programs.

The Senate is scheduled to re-convene January 18; the House will return for a pro forma session on January 3, then recess until January 31.  The president's budget request for fiscal year 2007 is due to be transmitted to Congress on February 6, when the process begins all over again.

Still to be wrapped up is a final vote in the House on the $39.7 billion, five year deficit reduction package, the budget reconciliation bill.  The measure includes spending cuts in college student loans, Medicaid, child support enforcement and the food stamp program as well as a Medicare physician payment freeze.  The reconciliation bill had passed the House December 20 by a vote of 212 to 206; the budget-cutting measure passed the Senate 51 to 50, with Vice President Cheney casting the tie-breaking vote.  But Democrats used procedural tactics that sent the bill back to the House for another vote.

Labor, health and education programs hard-hit

The road to final passage for the Labor-HHS-Education appropriations bill was especially difficult this year.  Saddled with a tight budget allocation that set the bar about $1.3 billion lower than last year's program level, House and Senate negotiators in November were forced to cut back spending on several fronts, including No Child Left Behind education programs, health professions training, maternal and child services, rural health and substance abuse treatment.  In order to avoid even deeper cuts to services, in fact, lawmakers reluctantly agreed to forgo their traditional congressional earmarks.

Reflecting wide dissatisfaction with the funding levels, on November 17, 22 House Republicans joined with Democrats to defeat the conference report on the measure, a rare occurrence in a year when party-line votes have typically won the day.  

A second House-Senate conference was convened in early December, but negotiators were not granted any additional funds to work with.  The appropriators reallocated funding to boost rural health care and training programs, and in a second try on December 14, the House narrowly approved the measure by a vote of 215 to 213, leading the way to Senate passage on December 20, as part of the Defense appropriations bill.

Physician payment cut avoided; pay-for-performance deferred

The deficit reduction package that awaits final approval by the House includes a provision that forestalls the planned 4.4 percent cut to physician payments, due to take effect January 1, 2006.  The freeze in payments, which alone costs $7.3 billion, represents another temporary fix to a problem Congress seems reluctant to address. 

During final negotiations on the measure, negotiators at the last minute dropped plans to link physician payments to quality performance measures.  Lawmakers heard from a variety of organizations that shifting to a pay-for-performance system before a solid structural design is in place would be disasterous.  Negotiators agreed instead to task the Medicare Payment Advisory Commission to come up with recommendations for replacing the current payment system, and report back to Congress by March, 2007.

Some final thoughts...and a look ahead

At a time when lawmakers in both political parties watch as their standing with the public drops to new lows, it was probably too much to expect that Congress and the President would wrap up their work in an orderly or respectable fashion.  In today's climate, even the old line about not knowing what goes into sausage or legislation isn't even mildly humorous anymore. 

As the past few months have shown, the political environment is steadily decaying:  Genuine policy differences lead to questions of patriotism.  Comity has given way to personal attack.  Trusted hand-shakes have disappeared from the scene.  And outreach has been replaced by trench warfare.

From a policy perspective, all this puts next year's debate in serious jeopardy, with the number of factions—spend more, spend less, spend a lot less, tax less, no spending cuts in an election year, more spending cuts in an election year—steadily multiplying.  This strongly suggests that 2006 could be even more difficult than this year has been, as forces both within and without Congress continue to work at cross-purposes.