Government Update — July 2017
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First and foremost, Happy 4th of July!

Recently in Congress: The week started with the Senate’s version of their “repeal and replace” Affordable Care Act, but late Tuesday, Senate Majority Leader McConnell pulled the bill from consideration until after the 4th of JulyRecess.  Meanwhile, House Republicans continued their budget negotiations this week and they voted on two immigration bills that aligned with President Trump’s agenda: Kate’s Law and a measure dealing with sanctuary cities. The first bill, named for a woman who was shot by a man who had illegally reentered the country after being deported for a separate crime, would toughen sentences for offenders who have reentered the country illegally multiple times. The sanctuary-cities bill would punish jurisdictions that refuse to comply with federal immigration authorities.

HEALTHCARE BILL (Senate)

Senate Health Care Bill (Postponed): On Tuesday, Senate Republicans canceled a vote on their version of the bill to repeal major parts of the 2010 Health Care Law. The decision not to hold the debate this week raises questions about whether the bill can pass at all this year; however, Sen. McConnell said “we’re going to press on" and added “that Republicans think the status quo under the 2010  health care law is unsustainable.” Senator Alexander, the Chairman of the Senate Health, Education, Labor and Pensions Committee, said there was no path for voting on proceeding to the health care bill until after the July Fourth recess. The Trump administration continued to lobby GOP senators to support the measure, and on Tuesday invited them to a 4 P.M. meeting at the White House.

Senate Health Care Bill: As reported on Monday evening, the Senate GOP health care bill would increase the number of uninsured Americans by 22 million over a decade to 49 million, slightly less than a House measure, per the Congressional Budget office.  The Senate bill would save $321 billion over a decade, $202 billion more than the House passed health care bill. 

CBO Scores Senate Health Care Bill: The nonpartisan Congressional Budget Office estimates that 22 million more people would be uninsured in 2026 under the Senate's healthcare replacement bill. Average premiums are expected to fall in 2026 after initially rising. The CBO's estimate of the plan's effect on the number of uninsured Americans could influence whether Republican senators support it. The estimated growth in the number of uninsured Americans is slightly lower under the Senate plan than the bill that passed the House last month, which the CBO said would lead to 23 million fewer covered in 2026.  Per the CBO, “average premiums for single individuals would rise by 20 percent and 10 percent in 2018 and 2019.  By 2026, average premiums in most of the country would drop about 20 percent.”  The updated bill would impose a six-month waiting period on individuals who buy insurance, but let their coverage lapse for more than 63 days in the prior year. That provision would start in 2019 and it’s an apparent response to the individual mandate, or the provision that requires Americans to have insurance or face financial penalties. The CBO report said an estimated 15 million more people would be uninsured next year, "primarily because the penalty for not having insurance would be eliminated.  Lower spending on Medicaid than under current law and "substantially smaller average subsidies in the individual market would lead to more Americans uninsured in the following years.” 

Coverage: The effects on coverage would start to occur quickly. In 2018, 15 million more people would be uninsured under the bill than under current law. Under the Senate bill, average premiums for plans for single individuals would be about 20 percent higher in 2018 than under current law, in large part because the penalty for not having insurance would be eliminated, so fewer healthy people would enroll. Premiums would be about 10 percent higher than under current law in 2019. Younger people would pay less for plans, but in 2020 average premiums for benchmark plans for single individuals would be about 30 percent lower than under current law.  Insurance for people who buy it on their own would cover a smaller share of benefits. The Senate bill would let states limit the requirements for essential health benefits.

Medicaid: The Senate bill would reduce the growth in Medicaid spending by $772 billion over a decade compared to current law, less than the $834 billion in Medicaid savings estimated for the House bill. A direct comparison may be misleading, though, as the Senate bill envisions a stricter future limit on Medicaid spending. 

GOP Senators Hesitant to Advance Health Bill to Floor: A handful of Republican senators suggested they would vote against a procedural vote on the Senate health care bill if GOP leaders try to advance the debate on the measure this week and they are Sens. Paul (KY), Johnson (WI), Collins (ME), Lee (UT), and Heller (NV).

Revisions: Republicans are still revising the Senate bill and additional changes are expected before a final vote.   Changes are being made in hopes of addressing the conservatives’ concerns.  Also, other changes could be made to address the concerns of more moderate members.  Per the CBO, Republicans have additional money they can use to make coverage more generous and still achieve the necessary savings required under reconciliation rules.

White House Reaction: President Trump would like Congress to send him a final health care measure by the time lawmakers depart for their annual August recess, but he is not, for now, taking a position on whether the Senate has to vote on its version this week.

Democrats Opposition: Per Senate Minority Leader Schumer, “this CBO report should be the end of the road for Trumpcare.” Democrats are united in their opposition to the bill.

TAX REFORM

Key provisions of Republicans’ planned overhaul of the tax code were under scrutiny this week.  House Speaker Ryan set out to accelerate work on tax reform with a speech before the National Association of Manufacturers last week, describing it as a key pillar of his party’s 2017 agenda. Ryan, and later two White House officials, said that a tax-reform bill would be moving through Congress by the fall, but Republican lawmakers still have some big policy differences to resolve and the coming weeks are likely to be consequential for tax policy. Ryan and House Ways and Means Committee Chairman Brady are speaking less and less about using a border-adjustment tax, a tax on certain imports, to pay for broad rate cuts. Dropping this tax would diminish their plans to make tax reform revenue-neutral unless they can find another high-dollar pay-for. What’s more, Ryan has said he wants many provisions of a tax-reform bill to be permanent, a requirement not shared by some in his party and a move that again raises the bar to successfully advance an overhaul package.

SCOTUS (Travel Ban)

On Monday, the Supreme Court allowed the Trump administration to implement parts of a revised travel ban, but also agreed to decide the legality of the controversial executive order later this year. The court did leave one category of foreigners protected, those "with a credible claim of a bona fide relationship with a person or entity in the United States," the court said in an unsigned opinion. The justices will hear arguments in the case in October. Last week, President Trump said that the ban would take effect 72 hours after being cleared by courts. The ban would apply to citizens of Iran, Libya, Somalia, Sudan, Syria and Yemen. The Trump administration said the ban was needed to allow an internal review of the screening procedures for visa applicants from those countries. That review should be complete before October 2nd, the first day the justices could hear arguments in their new term.

THE WALL

Customs and Border Protection has narrowed the initial set of bidders for a prototype of the Trump administration's border wall and expects to make a decision sometime this summer.  Up to eight prototypes could be built in the San Diego sector alongside existing fencing.  A decision will then be made to assess how the new barriers works alongside existing ones before deciding which designs to approve. The Customs agency was asked if they had ruled out areas where a wall or other barriers cannot be built and a spokesman stated that there are about 130 miles along the southern border with Mexico with lakes, canyons and other natural barriers, which would rule out building a physical structure. Homeland Security Secretary Kelly has said the department does not intend to build a wall “from sea to shining sea” along the entire length of the 2,000 mile border with Mexico. The fiscal 2017 omnibus spending bill provided nearly $350 million to replace 40 miles of existing fencing with higher, stronger steel structures. DHS is seeking $2.6 billion in fiscal 2018 to begin constructing the first 74 miles of what could ultimately become President Trump’s wall: 60 miles of border and levee wall in the Rio Grande Valley of Texas and 14 miles of replacement wall near San Diego.