House passes measure, 235-193; multiple issues to resolve before December 22 deadline

By a vote of 81-14, the Senate on Thursday, December 7, 2017, cleared a two-week continuing resolution, or "CR" (H.J. Res. 123), keeping the government open through December 22. The measure now goes to the President for his signature. Earlier, the House passed the measure by a vote of 235-193, with 14 Democrats supporting it and 18 Republicans voting against.

H.J. Res. 123 would extend the current continuing resolution, which expires Friday, December 8. That CR funded the government at fiscal 2017 levels, with an across-the-board cut to keep spending in line with caps mandated by the 2011 Budget Control Act (BCA). The latest CR would also direct additional funds to states that are running out of money under the Children's Health Insurance Program (CHIP, see later), which covers about 9 million low-income children whose family incomes are too high for Medicaid. The CR also extends the National Flood Insurance Program through December 22. The two-week CR does not include any additional disaster aid for areas affected by a series of hurricanes in August and September.

The House passed a fiscal 2018 omnibus spending package (HR 3354) on September 14 by a vote of 211-198, but the Senate has not voted on any spending bills, though the Senate Appropriations Committee reported out the last of its 12 spending bills the week of November 20.

Several disputes unresolved. Appropriators and the congressional leadership now have a number of issues to resolve over the next two weeks to avoid a shutdown of the government just before Christmas, including: an agreement to change the spending caps for fiscal 2018; Medicare "extenders"; funding for community health centers (CHCs); a long-term reauthorization of CHIP; funding for a wall on the southern border; and a solution for the Deferred Action for Childhood Arrivals (DACA) program, which the President rescinded earlier this year. House conservatives want that chamber to pass a fiscal 2018 spending bill that raises defense spending levels beyond BCA levels but keeps non-defense spending at the sequester caps.

House Minority Leader Nancy Pelosi (D-CA) called the two-week CR "a waste of time" in a press conference on Thursday, saying it included inadequate funding for disaster relief, CHIP, the opioid crisis and the Department of Veterans Affairs. Republican Study Committee Chairman Mark Walker (R-NC) told reporters on Thursday that House GOP leaders have assured conservatives that end-of-year negotiations over spending bills will not include cost-sharing subsidies for the Affordable Care Act (ACA), DREAMers or the debt ceiling. "The three things we were told are not going to happen as part of our agreement: no CSRs, no DACA, no debt limit," Walker said.

Sen. Susan Collins (R-ME) said Thursday, however, that she believes her agreement with Senate Majority Leader Mitch McConnell (R-KY) to support the conference report on the tax reform bill is contingent on House passage of a bipartisan package of measures, such as cost-sharing subsidies and reinsurance, intended to stabilize the ACA's insurance marketplaces.

Pelosi, Senate Minority Leader Charles Schumer (D-NY) and Republican leaders went to the White House on Thursday for a meeting on spending priorities, which could move the parties closer to a top-line agreement on defense and non-defense spending levels for the rest of the fiscal year.

CHIP provisions. H.J. Res. 123 includes language addressing state funding shortfalls for CHIP, which expired on September 30. The provision creates a special rule for certain "emergency shortfall states" during the first quarter of FY 2018, allowing CMS to reallocate additional funds to states in the greatest need of additional CHIP funding. Most states have been using leftover funding from fiscal 2017 along with redistributed 2016 funds from CMS to keep their programs running, but several states have now hit their funding maximum due to a rule that redistributed funds must be proportionate to the size of a state's CHIP program. The measure would allow these states to access additional funding despite this proration rule.

According to CMS, $1.171 billion of the $2.9 billion in the redistribution fund has been issued to date. So far, those contingency funds have been enough to prevent any states from running out of CHIP funding, but there is still no deal on a longer-term extension. A Finance Committee spokeswoman said Chairman Orrin Hatch "remains confident this will be resolved before the year's end," but some states are starting to get nervous and are preparing to send notices to families that may soon lose coverage.

While there is agreement on the overarching policy to extend CHIP for an additional five years, lawmakers are still negotiating the offsets. The House passed a CHIP reauthorization bill in November with controversial pay-fors opposed by Democrats. The Senate Finance Committee passed a "clean" CHIP bill out of committee (i.e., without offsets), but the Republican leadership has yet to bring that measure to the Senate floor. If negotiators are unable to reach agreement on a long-term reauthorization of CHIP by December 22, the issue would likely be revisited when leaders meet in January to work out a spending bill for the rest of fiscal 2018.

———————————————