Washington Rundown for April 3, 2013 as provided by BIO for the Council of State Bioscience Associations (CSBA)
Prior to adjourning for the Easter Recess, Congress devoted most of March to the debate over competing government funding and budget proposals. The House and Senate agreed to a continuing resolution (CR) to fund the federal government for the rest of the fiscal year, which President Obama signed into law. Both chambers also passed competing budget resolutions for Fiscal Year (FY) 2014, though agreement on the budget is unlikely given the partisan divide over spending issues and whether tax reform should be revenue neutral. Additionally, both chambers’ tax-writing committees furthered the discussion on tax reform by holding hearings, issuing an options paper, and releasing draft legislation.
On March 12, House Budget Committee Chairman Paul Ryan (R-WI) released his budget for FY 2014. The resolution would balance the budget over ten years, largely by cutting $2.7 trillion in funding to several social programs. Ryan projects $4.63 trillion in overall savings over the decade, creating a $7 billion surplus by FY 2023. The Ryan budget would also change Medicaid and the food stamp program into block grants and would convert Medicare into a system of premium subsidies with additional means-testing for higher-income seniors. On March 21, the House approved the resolution by a vote of 221-207.
Senate Budget Committee Chairman Patty Murray (D-WA) released her own budget proposal this month. Chairman Murray’s proposal seeks to achieve $1.95 trillion in deficit reduction, calling for $975 billion in spending cuts and $975 billion in new tax revenue. On March 23, the Senate approved the Murray resolution by a vote of 50-49, marking the first time in four years that the Senate has passed a budget. Final passage followed a flurry of votes on budget amendments. One notable amendment considered was Senator Ted Cruz’s (R-TX) amendment to defund the Patient Protection and Affordable Care Act (ACA), which Democrats defeated.
Given the significant and seemingly insurmountable differences, it is unlikely that the two budgets will be reconciled. Budget resolutions provide the general framework on which Congress plans to base future appropriations bills, but the legislation lacks the force of law. However, some believe that the budget resolutions could provide a starting point for a grand bargain on tax and entitlement reform.
In terms of the White House’s involvement with the budget process, Press Secretary Jay Carney stated this month that President Obama will not make balancing the federal budget his top priority in negotiating the spending bill with Congress. Instead, the Obama Administration will focus on decreasing the amount the country borrows each year while fostering economic growth. Through entitlement and tax reform, the White House is hoping to broker a budget deal that will allow the federal government to achieve $4 trillion in deficit reduction over ten years. White House spokesman Josh Earnest announced that the Administration will release its budget on April 10.
In September 2012, Congress passed a Continuing Resolution (CR) to fund the government through the first half of FY 2013. The CR was set to expire on March 27. On March 6, the House passed a new CR to continue funding the government through the end of FY 2013. The proposal funded federal departments at current levels with the exception of full year appropriations for Defense, Military Construction, and Veterans Affairs. The CR also sought to soften the blow of the $85 billion in automatic spending cuts brought on by sequestration by providing greater flexibility to the Departments of Defense and Veterans Affairs in implementing the cuts.
The Senate passed its version of the CR on March 20. In addition to Defense, Military Construction, and Veterans Affairs, the Senate CR added full year funding levels for Homeland Security, Commerce, Justice and Science, and Agriculture. The House passed the Senate’s version of the CR on March 21. The final CR can be viewed here. President Obama signed the CR on March 26.
In a letter to Chairman Ryan, House Ways and Means Committee Chairman Dave Camp (R-MI) and other Committee Republicans laid out the basic framework for tax reform that they would like to see included in the FY 2013 budget. In addition to calling for a simpler tax code and a phased-in transition to two federal income tax brackets, Chairman Camp and leading House Republicans reiterated their opposition to new tax revenues. The Ryan budget committed to achieving these goals.
In contrast to the House budget, the Senate budget would raise $975 billion in new tax revenue and includes filibuster-proof fast-track procedures for tax reform that would require legislation to be reported by October 1, 2013. However, Senate Finance Committee Chairman Max Baucus (D-MT) has expressed concern over setting a rigid timeline for tax reform that could potentially hamstring efforts to have a deliberate and thorough debate about the issues.
During the debate over the budget resolution, the Senate approved an amendment to repeal the medical device tax that was included in the ACA. The amendment passed on a bipartisan vote of 79-20. Although the budget amendment is non-binding, it provides some momentum for the issue.
On March 21, The Senate Finance Committee released its first options paper on tax reform, entitled “Simplifying the Tax System for Families and Businesses.” The paper includes proposed options for tax reform that have been presented to the Committee in recent years. Some of the topics include: IRS collection and auditing, the “tax gap” and tax preparers, permanently repealing the AMT, adjusting limits on tax deductions and simplifying corporate and individual filing requirements. The paper does not take a position on whether tax reform should be revenue neutral. The release of the first options paper came after the first closed door tax reform meeting of the Senate Finance Committee to discuss options for simplifying the tax code and reforming rules for tax preparers. The Committee plans on a series of nine additional meetings and options papers on a variety of tax topics.
On March 12, Chairman Camp released his proposal for small business tax reform. The plan would permanently extend Section 179 expensing and expand the use of the simpler “cash accounting” method. The proposal would also provide two possible overall reform options for pass-through entities.
The House Ways and Means Committee held two hearings on March 19 and 20 to discuss tax reform. At the first hearing, the full Committee investigated the impact of federal tax reform on state and local governments. At the second hearing, the Select Revenue Measures Subcommittee met to discuss Chairman Camp’s discussion draft on financial products.
In February, the House Ways and Means Committee rolled out 11 working groups on a variety of tax topics. The working groups are still accepting public comment from a wide range of sources, such as stakeholders, other Members of Congress and the general public, through April 15, 2013. Click here for details on how to submit comments.
Job Approval: President Obama
|Gallup||March 27||Approve 49, Disapprove 43|
|Rasmussen Reports||March 27||Approve 53,Disapprove 46|
|CBS News||March 24||Approve 45, Disapprove 46|
Job Approval: Congress
|CBS News||March 24||Approve 11,Disapprove 81|
|Fox News||March 19||Approve 14,Disapprove 79|
|ABC News/Wash Post||March 10||Approve 14,Disapprove 82|
Direction of the Country
|CBS News||March 24||Right Track 32,Wrong Track 61|
|Rasmussen Reports||March 24||Right Track 33,Wrong Track 59|
|McClatchy/Marist||March 7||Right Track 34,Wrong Track 62|
|Cabinet Members||Incumbent||Status||Nominated Replacement||Confirmed|
|State||John Kerry||New to post||–||–|
|Treasury||Jacob Lew||New to post||–||–|
|Defense||Chuck Hagel||New to post||–||–|
|Interior||Ken Salazar||Retiring||Sally Jewell||Pending|
|Labor||Seth Harris||Acting||Thomas Perez||Pending|
|Health and Human Services||Kathleen Sebelius||Remaining||–||–|
|Housing and Urban Development||Shaun Donovan||Remaining||–||–|
|Transportation||Ray LaHood||Retiring||To be determined||–|
|Energy||Steven Chu||Retiring||Ernest Moniz||Pending|
|Veterans Affairs||Eric Shinseki||Remaining||–||–|
|Homeland Security||Janet Napolitano||Remaining||–||–|
|Vice President||Joe Biden||–||–||–|
|White House Chief of Staff||Denis McDonough||–||–||–|
|Director of Office of Management and Budget||Jeffrey Zients||Acting||Sylvia Matthews Burwell||Pending
|EPA||Bob Perciasepe||Acting||Gina McCarthy||Pending|
|Trade Representative||Ron Kirk||Retiring||To be determined||–|
|U.N. Ambassador||Susan Rice||Remaining||–||–|
|Chair of Council of Economic Advisers||Alan Krueger||Remaining||–||–|
|Small Business Administrator||Karen Mills||Retiring||To be determined||–|
The Washington Rundown is provided by the Biotech Industry Organization (BIO) and Republic Consulting, LLC.