Washington Watch:

Gridlock in Congress Continues

As May arrived, the U.S. Congress found it was deeply mired in stalemate and gridlock as the days and weeks fly by with little progress on key legislative fronts. With very few legislative successes and only 14 weeks of scheduled work remaining before Fiscal Year 2005 officially starts on October 1, 2004, the politically divided Second Session of the 108th Congress faces great hurdles in the hopes of achieving legislative victories. Most attention is focused in the Senate where a narrow Republican majority finds itself stymied by Senate rules and procedure. As the November national election approaches, it remains to be seen if real progress can be made as both parties jockey daily for political advantage with the electorate. Pending disability policy hangs in the balance as the Congressional calendar shrinks, the number of priority bills accumulate, and partisanship builds.

One key legislative battle pertains to the Fiscal Year 2005 Budget Resolution. A Budget Resolution serves as an internal blueprint for the Congress to develop spending and revenue policy. Discretionary spending limits are not the driving force for the controversy over the Budget Resolution. An $821 billion cap was agreed to for FY 2005 appropriations. Instead, it is the policy on whether or not to pay for any tax cuts by reducing spending or raising new revenue sources that has thus far tied the Congress in knots. The White House and the House of Representatives are adamant that future tax cuts not be linked to PAYGO rules that require offsets to spending increases or tax cuts. Four moderate Senate Republicans (Senators McCain (AZ), Chafee (RI), Collins (ME) and Snowe (ME)), along with all but one Democrat (Miller (GA)), continue to insist that PAYGO provisions apply to tax cuts so that the federal deficits are not increased. Several attempts at resolving the impasse have been tried but no solution to appease the White House and both parties in each House has been found thus far. Failure to reach an agreement on the Budget Resolution would have a significant impact on entitlement and discretionary disability programs.

In addition to the PAYGO provision, the Budget Resolution could instruct Congressional Committees to cut entitlement programs such as Medicaid. Thus far, the Senate has rejected efforts to cut Medicaid but the House has voted to reduce Medicaid by $2.2 billion over 5 years. Even if such instructions are given to the authorizing committees, it is unclear that these instructions would be followed in an election year. In any event, the Budget Resolution requires close scrutiny, as Medicaid policy could be adversely affected.

If the Congress fails to adopt a Budget Resolution, each House would be left to its own devices on deciding how to develop its FY 2005 discretionary spending through the appropriations committees. Without a Budget Resolution, appropriators would have to set the overall spending levels for the 13 appropriations bills. It would then be an internal battle between appropriations subcommittees as to which ones are given additional dollars to spend. The Arc and UCP follow closely the two subcommittees that handle almost all of the federal discretionary disability spending: Labor, Health and Human Services, and Education and Veterans Affairs and Housing and Urban Development. The $821 billion cap leaves little room for significant increases in discretionary spending. That level is actually $2 billion below the level requested by the Bush Administration and less than a 1 percent increase over current spending. Given the short amount of time for this Congress to act and the delay in adopting a Budget Resolution, there is already planning underway by some to shortcut the appropriations process by passing far fewer than the 13 appropriations bills by combining many or all of them into omnibus appropriations bills.

Most disconcerting to the Republican conservatives is the need to vote to increase the debt limit later this year if a Budget Resolution is not agreed to. Fiscal conservatives are wary of such action so close to elections.

All in all, there are high stakes politics and policy encapsulated in the Budget Resolution. The months of May, June, parts of July, and September loom large as the days for legislative action dwindle. The Arc and UCP Public Policy Collaboration will work all available angles to protect Medicaid and other entitlements and to secure increased funding for key disability programs throughout the remainder of this Congress.