Blog Post

After the shutdown: What to expect from the budget conference committee

October 29, 2013

    Juliette Mullin, Editor

    On Wednesday, a 29-member budget conference committee—convened by the deal to end the government shutdown—will begin six weeks of negotiations on a budget blueprint for the nation.

    The bipartisan committee was created on Oct. 17, when President Obama signed a short-term deal to end the 16-day federal government shutdown and keep the government open until Jan. 15. The deal also raised the debt ceiling until Feb. 7.

    The committee is scheduled to issue budget recommendations to Congress on Dec. 13. But can they accomplish in less than two months what Congress hasn't been able to do in years?

    I sat down with Piper Su, the Advisory Board's health policy advisor, last week to discuss the task before the committee, how it differs from the 2011 debt supercommittee, and the potential for reforms to federal entitlement programs and the Affordable Care Act.  

    WHAT IS THE BUDGET CONFERENCE COMMITTEE?

    Daily Briefing: To many, this budget conference committee—which came out of a deal to end the government shutdown and prevent a U.S. default—sounds a lot like the supercommittee of 2011, which was born of a similar crisis and ended with no consensus and a federal budget sequester.

    Can you explain the purpose of this new committee, and how it compares to the 2011 supercommittee?

    Piper Su: The supercommittee frankly had a lot more teeth to it. There was an actual financial trigger and a consequence to not taking action, there was a longer time frame, and its membership was designed to drive more toward a larger deficit-reduction conversation, as opposed to exclusively including budget committee members.

    [In comparison,] the current committee is structured much more like a traditional budget conference committee.

    [Don't forget] that the Congressional budget is primarily a financial roadmap— it doesn't necessarily prescribe specific policies. [Typically,] a federal budget will put in place financial targets and overall program spending, but it doesn't necessarily specify how you get to those numbers.

    This is important to understand as people are talking about, "Is this a vehicle for Medicare payment changes?" or "Is this a vehicle for entitlement reform?" Likely not, in terms of prescribing a lot of  actual program policy decisions. The outcome of this discussion would more likely be  an agreement on a financial target structure.

    DB: If the conference committee delivers its recommendations on time, what's the next step for Congress as it nears a Jan. 15 budget deadline?  

    Su: If they are able to agree upon recommendations, those targets would presumably be the framework for reaching a budget agreement by Jan. 15.

    [That could allow you to] have an actual federal budget as opposed to another continuing resolution, which is the tool that is used most frequently over the last few years because of the inability to produce an annual federal budget using the traditional process.

    DB: If the committee fails to deliver recommendations at the end of the six-week period, what are the consequences and where does Congress go next?  

    Su: So there's really no immediate consequence in terms of the actual budget.

    [However,] if this group is unable to come to any agreement, you essentially set up a four-week time period—with the holidays in the middle of that—where you have to come up with a budget by Jan. 15. And you've probably got very little consensus to work with as a foundation at that point. Essentially, you set yourself up for another last-minute negotiation like we had at the end of September without any particular roadmap in sight.

    Given those dynamics, a January deal could likely include another continuing resolution with the budget levels included in the Budget Control Act, including additional sequestration cuts that are scheduled to take effect primarily on the defense spending side of the ledger.

    IS HEALTH CARE ON THE AGENDA?

    DB: Health care is an inevitable component of any major budget discussion, and Republican leaders have pledged to push for major changes to Medicare and Medicaid during these negotiations. What are the key health care issues and reform proposals that you expect the committee to tackle?

    Su: What I expect to see tackled by this committee in the next six weeks is—to be perfectly honest—not much in terms of actual health care policy changes or entitlement reform changes.

    I think that in the beginning, two weeks ago, when people were talking about the potential for this conference committee process, you heard some members talk about using it as a vehicle for an entitlement reform conversation or a tax reform discussion.

    Over the last week, you've seen that die away a little bit…. [House Budget Chair] Paul Ryan made the comment that a big budget agreement in this timeframe isn't doable and we should focus on something that's doable. [He] specifically referenced a targeted conversation about stopping the sequestration cuts. Similarly, [Senate Majority Leader] Harry Reid [recently said] that this was not a vehicle for a grand bargain.

    So even at the end of last week, we're seeing the expectations diminish in terms of what they're actually able to address and accomplish… It doesn't bode well for a substantive conversation on health care policy or entitlements. To the extent that entitlements do come up, it would probably be a discussion around some of the smaller changes that have been raised in recent years and could have some bipartisan support—things like means testing for Medicare premiums or combined deductibles for Medicare Parts A and B.

    DB: The Affordable Care Act played a major role in the government shutdown. What role do you expect it to play in these budget negotiations?

    Su: It's certainly still going to generate a lot of discussion, and certainly the ongoing concerns around the operation of the insurance marketplace websites is not doing much to take it off the table. 

    But I don't think that the ACA has much chance of being a real piece of a budget conference agreement, although some of those issues will certainly come up. People may continue to talk about delay or repeal of the medical device fee, or the health insurer fee, but it is unclear whether the conference would really take action on those types of issues.

    That's not say the ACA couldn't be tweaked outside of the budget conference process. The administration […] already announced a change of sorts in terms of the enrollment period for individuals eligible for the new insurance marketplaces. And I think that if we find that the website is still not functioning properly in late November/early December, there may be some discussion about making small changes to other parts of the timeline because people simply won't be able to enroll in the same capacity as the original plan anticipated.

    DB: If the committee members did want to push for changes to the timeline of the ACA rollout, how can they make that recommendation in the context of the budget conference committee?

    Su: Because some sources of the funding for implementation and outreach activities are related to the federal budget allocation, I suppose they could try to creatively use their budget levers to drive that conversation.

    And even though the conference committee is structured around the federal budget, that doesn't mean that there aren't other policy issues that could be included in the recommendations of the committee. The current conversation appears to be more narrowly tailored, but the past few months have taught us that the path for congressional negotiation is anything but predictable.

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