The Senate convened today to begin floor consideration on its reconciliation package calling for $39.1 billion in savings over 5 years.  Debate is limited to 20 hours and cannot be filibustered (the 20 hours will expire Wednesday at 6:00 p.m.).  A simple majority is needed for the package to pass the chamber. 

The House will meet tomorrow and consider three measures under suspension.  In addition, the chamber is scheduled to consider the Private Property Rights Protection Act of 2005 (H.R. 4128), which is in response to the Kelo vs. City of New London Supreme Court Case.  H.R. 4128 would limit state and local governments usage of eminent domain powers for economic development purposes.  Floor consideration could also occur later this week on the conference reports to the FY 2006 Foreign Operations appropriations bill and the FY 2006 Energy and Water appropriations bills.  The House Budget Committee is expected to mark-up its compilation of all of the proposals from the authorizing committees (which approved their recommendations last week) to reduce spending by $50 billion over five years.

Supplemental:  Last week, the White House sent Congress a supplemental package for Katrina relief.  This is the third supplemental sent to the Hill and would reallocate $17.1 billion in previously appropriated funds for levee reconstruction, infrastructure work, and road repairs in hurricane affected areas.   It would do so by rescinding $2.3 billion from 55 previously-appropriated programs.  Congress has approved more than $62.3 billion in emergency hurricane relief bills last month, but more than $40 billion remains unspent by FEMA.

Second tax incentives package introduced:  Concerning hurricane relief efforts, a second package of tax incentives totaling up to about $8 billion over ten years was introduced last week to spur economic growth in the disaster areas.  The measure will skip the markup stage and head to the House floor, where it could be considered sometime this week.

HOUSE ENERGY AND COMMERCE APPROVES MEDICAID SAVINGS

Last Friday, the House Energy and Commerce Committee approved its Medicaid budget reconciliation package on a mostly party line vote of 28-22. The package is intended to save a net of $11 billion in federal Medicaid expenditures by making reforms in how Medicaid pays for prescription drugs; restricting the means by which some seniors transfer assets in order to become eligible for the program; giving states new options for requiring cost sharing; and allowing states to offer a benchmark benefit package to some populations. The bill provides an additional $1 billion in funding for the Low-Income Home Energy Assistance Program, and also provides $2.5 billion in Katrina-related Medicaid relief. Any Medicaid beneficiary from an affected county or parish in Louisiana, Mississippi, or Alabama will receive their care funded with 100 percent federal dollars for eleven months. Amendments passed during the Committee vote:

• an amendment to restrict a state's provision of the new benchmark benefit package to only those individuals who could be categorically eligible for the program (deemed necessary because of concerns from CBO that too much flexibility could increase overall program costs as states sought to expand Medicaid broadly);  
• an amendment to require any such new benefit flexibility include dental services;
• an amendment to exempt from cost-sharing the special category of beneficiaries who are in Medicaid because they had been diagnosed by the CDC with breast cancer;
• an amendment to exempt children with special needs and similar populations from the new cost-sharing requirements;
• an amendment that would overturn state efforts to develop preferred drug lists or prior authorization for anti-psychotics and anti-depressants (over the opposition of Chairman Barton who cautioned that it would produce a sizable CBO score and possibly jeopardize the package) and;
• an amendment to restrict hospitals' ability to charge out of network patients who show up in the emergency room.   For additional text, please visit the committee website at :  http://energycommerce.house.gov/

OTHER RECONCILIATION UPDATES

House Financial Services Committee: As part of the reconciliation process required by the FY 2006 budget resolution,  the House Financial Services Committee approved $470 million over five years in mandatory savings. The Committee passed a proposal that would transform the funding for a housing grant program from mandatory to discretionary spending subject to annual appropriations for a savings of $270 million. The Committee also approved a proposal that would increase to from $100,000 to $130,000, the ceiling on bank deposits guaranteed by the Federal Deposit Insurance Corporation and index the limit to inflation for a savings of $200 million. The committee's recommendations have been forwarded to the House Budget Committee.

House Ways and Means Committee:  Last week, the Committee approved (by a vote of 22-17) its reconciliation bill, which includes $8 billion in savings.  The bill includes reductions to the Child Support Program through a provision that would eliminate the federal match for state expenditures of child support incentive payments from $1.6 billion in savings to the federal government over five years.  In addition, the measure reduces the federal match rate for child support administrative costs from 66 percent to 50 percent over five years, which would be a direct cost shift to states, and realize a net savings to the federal government of $3.9 billion over five years. The bill also tightens eligibility requirements for foster care and adoption assistance, including provisions that clarify federal matching for children in unlicensed relative homes and eligibility for foster care and adoption assistance, for a federal government savings of $577 million over five years. The committee's reconciliation recommendations also include a five-year reauthorization of the Temporary Assistance for Needy Families (TANF) block grant and related programs, which includes new funding for child care and the President's healthy marriage initiative totaling $1 billion. The committee's reconciliation package has now been sent to the House Budget Committee for inclusion in the comprehensive House reconciliation bill.

The House Resources Committee:  The Committee approved budget reconciliation language that will open the Arctic National Wildlife Refuge (ANWR) to oil and gas drilling and permit states to opt-out of offshore drilling moratoriums to meet the panel's goal of raising $2.4 billion over five years. The OCS language represents a compromise that protects coastal states up to 125 miles offshore but lets neighboring states opt-out of congressional and presidential moratoriums if they choose. It also codifies current congressional moratoriums into law, avoiding annual renewals through the appropriations process. Savings within the measure include $2.5 billion for ANWR drilling; $152 million for changes to mining laws; $3 million for expediting the sale of public lands in the West; $50 million for expediting development of oil shale on Western lands; $600 million by letting coastal states opt-out of offshore moratoriums; and $122 million for selling land in the District of Columbia.

SENATE PASSES LABOR-HHS-EDUCATION APPROPRIATIONS BILL

Last week, the Senate passed the $604 billion FY 2006 Labor-HHS-Education Appropriations Bill (H.R. 3010). The bill provides a total of $141.7 billion in discretionary funding. An  amendment offered by Senator Tom Harkin (D-Iowa) to provide $8 billion (considered emergency funding and not required to be offset by cuts) for development and production of a vaccine to combat avian flu was adopted.

Funding for the Department of Health and Human Services is $65.4 billion, an increase of $1.6 billion over the FY 2005 level and $2.9 billion over the President's budget request. Key provisions include:

• $100 million for the Preventive Health and Health Services Block Grant (eliminated in the budget request and $18.5 million less than FY 2005)
• $710 million for the Maternal and Child Health Block Grant (a $14 million decrease from the budget request and FY 2005 level);
• $1.8 billion for Community Health Centers (a $105 million increase from last year's level but slightly lower than the $2 billion requested in this year's budget);
• $636.8 for the Community Services Block Grant (CSBG) (eliminated in the budget request and fully restored to the FY 2005 level);
• $2.1 billion for the Ryan White AIDS program (a $10 million increase from FY 2005);
• $2.2 billion for the Low-Income Home Energy Assistance Program (a $300 million increase from FY 2005);
• $6.9 billion for Head Start (an increase of $31.2 million from FY 2005); and
• $1.7 billion for the Substance Abuse Prevention and Treatment Block Grant.

Funding for the Department of Education (DOE) is $56.7 million, an increase of $132.2 million over the FY 2005 level and $490.3 million over the President's budget request. Key provisions within the DOE include:

• $12.8 billion for Title I (an increase of $100 million from FY 2005 and $503 million less than the budget request of $13.3 billion);
• $10.7 billion for the Individuals with Disabilities Education Act, Part B (an increase of $100 million from FY 2005 and $408 million less than the budget request);
• $100 million for Title V - State Grants for Innovation (which is $98 million less than the FY 2005 level and an increase of $2 million from the budget request);
• $1.3 billion for Vocational Education (which was eliminated under the budget request and a decrease of $16 million from FY 2005); and
• $13.2 billion for Pell grants (an $836 million increase from FY 2005, funding supports a maximum grant of $4,250).

Funding for the Department of Labor (DOL) is $11.9 billion, a decrease of $129 million from the FY 2005 level and $295 million over the President's budget request. Key provisions within the DOL include:

• $1.5 billion for the Dislocated Worker assistance (same as FY 2005 level and an increase of $132.5 million over the Administration's request).