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The latest on the debt ceiling

As we creep closer to hitting our debt ceiling, which the Treasury says will occur before the end of the month, House Republicans are trying to come up with a strategy aimed at extracting some policy concessions from the White House and Democrats in Congress in exchange for raising the debt ceiling.

While Republicans in the House and Senate have shown no appetite for a repeat of last year’s show down that led to a government shutdown, Republicans in both chambers, however, would like to tie the increase in the debt limit to some policy proposal favored by the GOP.

While Republicans agree they would like something in return, there is a great deal of divergence of opinion over what that something should and could be.

Some have advocated tying an increase in the debt limit to approval of construction of the Keystone XL pipeline. Others have proposed tying it to changes in the Affordable Care Act – though nothing as draconian as de-funding – while others have urged House leadership to use the debt ceiling debate as leverage to push through some pieces of tax reform.

On Wednesday, a proposal was floated late in the week that would tie the increase in the debt ceiling to restoring military benefits that were cut in the Ryan-Murray budget deal. Late in the week, there was increasing talk in GOP circles about the possibility of linking an increase with the doc fix. 

Farm bill finally passes

The farm bill is finally headed to President Obama’s desk for his signature – a whopping five years after debate on the issue began. The bill, which previously had cleared the House, passed the Senate by a bipartisan margin of 68 to 32.

The nearly 1,000 page bill, which represents nearly $1 trillion in spending over the next 10 years, includes a cut of $8 billion to the Supplemental Nutrition Assistance Program (more commonly known as the food stamps program), eliminates controversial direct payment subsidies to farmers regardless of whether they actually grew crops or not, and expanded crop insurance.

The president is expected to sign the bill next week. 
Click here to view the Washington Business Brief, Washington finding ways to work together

A bad week for the President’s healthcare law

The president’s signature healthcare law faced another rough week. According to a new report by the Congressional Budget Office (CBO), the Affordable Care Act could reduce the number of full-time workers in the United States by 2 million in 2017 and 2.5 million in 2024. A copy of the report can be found here.

Republicans in the House and Senate pounced on the report as proof that Obamacare is every bit the "job-killer" they promised it would be.

The report says the reduction comes "almost entirely" from a decrease in the amount of time laborers choose to spend at work, rather than a substantial decline in the amount of work businesses are offering.

The law's incentives and subsidies may give some workers less of a reason to work. Under the Affordable Care Act, individuals who earn up to 400 percent of the federal poverty level qualify for assistance to buy health insurance. Some may want to keep their hours down in order to qualify; others may see the subsidized coverage as an opportunity to reduce their hours for other reasons.

The estimated effect of the law on the workforce, which was part of a regular update of the nonpartisan CBO's 10-year budget and economic outlook released Tuesday, was a significant departure from earlier estimates. Previously, the CBO estimated Obamacare would reduce household employment by 800,000 in 2021. According to the new report, employment would fall by 2.3 million that year. The report only covered the years 2014 to 2024, but the agency said the employment effects would likely continue after that time period.

Both CBO Director Douglas Elmendorf and the White House cautioned that the new figures should be interpreted carefully. The White House focused on the employee choice aspect. "That is different from saying ... the employer's going to destroy a job because of the Affordable Care Act [and] now they can't get it," senior administration officials said in a call with reporters.

The numbers changed substantially, Elmendorf said Tuesday, because the agency found new channels, like the requirement for employers to provide coverage for all full-time employees, through which the Affordable Care Act would reduce the labor supply. The CBO also drew on new evidence of how changes in tax rates and Medicaid expansions and contractions have affected the labor supply in the past. 

Immigration reform update

The roller coaster ride of immigration reform continues. There was renewed optimism about the prospects for immigration reform after House Republican leadership unveiled their principles for immigration reform - principles that went as far as including a path to legalization for undocumented workers. The renewed optimism increased after the president refused to say he would veto legislation that reached his desk that fell short of full citizenship for illegals.

That initial optimism took a decidedly less optimistic turn this week when several Republican leaders downplayed the chances for reform this year. Senate Minority Leader Mitch McConnell (R-KY) all but declared immigration reform dead in the Senate. Rep. Paul Ryan (R-WI) said the question of immigration reform passing in this Congress was "clearly in doubt" and stressed an "enforcement first" approach to immigration reform, an approach that was echoed by House Majority Leader Eric Cantor (R-VA).

Even Speaker of the House John Boehner (R-OH) conceded this week that it would be difficult to move immigration reform this year.

Republicans in both chambers have questioned whether the president and his administration can be trusted to oversee the implementation of the border security measures that would be a part of any immigration overhaul.

Doc fix deal reached

This week, a bipartisan bicameral deal was reached to replace the Medicare Sustainable Growth Rate (SGR) formula. The so-called “doc fix” legislation would permanently fix a problem Congress must grapple with every year.

On Wednesday, House Ways and Means Chair Dave Camp (R-MI), Senate Finance Committee Chair Max Baucus (D-MY), Senate Finance Committee Ranking Member Orrin Hatch (R-UT), House Ways and Means Committee Ranking Member Sander Levin (D-MI), House Energy and Commerce Chair Fred Upton (R-MI), and House Energy and Commerce Ranking Member Henry Waxman (D-CA) introduced legislation that would replace the SGR formula. The legislation would: 

  • Institute a 0.5 percent payment update for five years
  • Improve the fee-for-service system by streamlining Medicare’s existing quality programs into one value-based performance program
  • Incentivize movement to alternative payment models
  • Make Medicare more transparent to patients and doctors

The bill is expected to cost in the neighborhood of $130 billion over 10 years. The new compromise legislation does not say how the replacement will be paid for – something that is likely to be a major sticking point between the two parties and the two chambers.

Senate fails to pass short term unemployment extension

On Thursday, the Senate narrowly failed to pass a short-term extension of unemployment benefits for those workers who have been out of work for more than six-months.

The benefits, which expired at the end of 2013, have been the subject of a great deal of debate and deal-making in the Senate over the last month. An earlier version of the bill was also defeated on the floor of the Senate when Democrats were unable to peel off enough Republican votes to overcome a filibuster.

But, unlike the previous bill, the new one would have fully covered the $6.4 billion cost of providing jobless benefits for an additional three months and would not increase the record federal debt load. In fact, supporters say it would provide enough additional revenue to help reduce the federal debt by $1.2 billion.

The bill uses something called “pension smoothing” – a process that allows companies to use historical data in determining pension contributions. This process will increase revenues and result in additional taxes that will be used to pay for the unemployment extension.

Even if the legislation had cleared the Senate hurdle, it still would have faced long odds on becoming law – Republican leadership in the House has shown little interest in moving the bill.

Political bits


New York 18th Congressional District: Former Rep. Nan Hayworth (R-NY) announced this week that she is running for the seat she previously held in Congress before being defeated by current Rep. Sean Maloney (D-NY). Maloney narrowly defeated Hayworth in 2012.

North Carolina 2nd Congressional District: Former American Idol runner-up Clay Aiken (D-NC) announced his bid for Congress this week. Aiken is seeking to knock off incumbent Rep. Renee Ellmers (R-NC) – who is also facing a primary challenge from her right.

Virginia 10th Congressional District: Robert Wasinger (R-VA), Chief of Staff to Rep. Kerry Bentivolio (R-MI), announced he was entering the GOP race to succeed Rep. Frank Wolf (R-VA). Wasinger, who is positioning himself as a grassroots conservative, lost a bid for a seat in his native Kansas in 2010.

Kansas: Physician Milton Wolf (R-KS) raised $216,000, while contributing $7,000 of his own money and loaning the campaign an additional $30,000, in the fourth quarter of 2013 and has $179,000 cash on hand in his primary bid against Senator Pat Roberts (R-KS).           
A look ahead


Monday, Feb. 10 – The House Energy and Commerce Committee's Health Subcommittee will hold a hearing on Examining Drug Shortages and Recent Efforts to Address Them at 2:00 p.m. in 2123 Rayburn.


Monday, Feb. 10 – The Senate Armed Services Committee will hold a markup of S.1856, to repeal section 403 of the Bipartisan Budget Act of 2013, relating to an annual adjustment of retired pay for members of the armed forces under the age of 62, at 6:00 p.m. in G-50 Dirksen.

Tuesday, Feb. 11 – The Senate Armed Services Committee will hold a hearing on current and future worldwide threats to the national security of the United States at 9:30 a.m. in G-50 Dirksen. Director of National Intelligence James Clapper and Army Lt. Gen. Michael Flynn, director of the Defense Intelligence Agency, are scheduled to testify.

Wednesday, Feb. 12 – The Senate Judiciary Committee will hold a hearing on The Report of the Privacy and Civil Liberties Oversight Board on Reforms to the Section 215 Telephone Records Program and the Foreign Intelligence Surveillance Court at 10:00 a.m. in 226 Dirksen.

Washington by the numbers            

2.3 million - The number of people the Congressional Budget Office estimates will quit
their jobs or reduce their hours due to the Affordable Care Act.

$2 billion - The amount CVS expects to lose from its yearly revenue when it stops selling cigarettes.

They said what?

"I move about with my TV show so that the drones can't find me, and that you won't know exactly where I am, as long as we have solar power and we can reach the satellite.” -- Former Minnesota Gov. Jesse Ventura, on CNBC, on his current situation before he runs for president in 2016. (National Journal)

Washington humor

"House Republicans unveiled a new plan that would allow undocumented immigrants to become citizens if they learn about American history, which will be great, because then they can teach it to Americans." –Jimmy Fallon