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Congress Approves 2015 Appropriations; National Council Looks Ahead to 2016 Budget Debate

Capitol Connector
Your source for the latest updates from Capitol Hill. We translate policy into practice so you can learn how policy trends will affect your work and how best to prepare.

Rebecca Farley

Director, Policy & Advocacy, National Council for Behavioral Health

Congress Approves 2015 Appropriations; National Council Looks Ahead to 2016 Budget Debate

December 18, 2014 | Federal Budget | Comments
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Capping a week of political drama, the Senate on Saturday night gave final approval to a House-passed budget bill that funds most government agencies through September 2015. Passage came after several days of procedural maneuvering that could have killed the bill’s passage. President Obama signed the $1.1 trillion bill into law on Tuesday, giving lawmakers a few months of breathing space until the 2016 budget debates begin early next year.

Overall, the Substance Abuse and Mental Health Services Administration (SAMHSA) received a $9.89 million cut from 2014 levels. Most line items in the SAMHSA budget also received small cuts, though some stayed level and others saw small increases. In this year’s difficult funding environment, Congress largely preserved funding for important priorities such as the Substance Abuse Prevention and Treatment Block Grant, Primary-Behavioral Health Care Integration, and Mental Health First Aid. Unfortunately, the Mental Health Block Grant saw a $1.2 million reduction, though last year’s requirement that 5 percent of block grant funds be earmarked for early intervention activities remained in place.

To see the National Council’s chart comparing 3-year funding levels for selected SAMHSA, NIH and criminal justice programs, please click here.

 

Bill Targets Affordable Care Act

The spending bill contains measures that target various provisions of the Affordable Care Act (ACA). Specifically, it would prohibit the Centers for Medicare and Medicaid Services (CMS) from providing new government funds to health insurers to subsidize potential revenue losses under the ACA’s “risk corridor” program. However, the provision would continue to allow the federal government to collect payments from insurers whose revenues are higher than expected, which it may then give to companies with losses.

Another provision would cut the ACA’s Independent Payment Advisory Board’s (IPAB) budget by $10 million. Budget cuts could also impede the IRS’ ability to enforce some portions of the ACA. The spending bill would cut IRS’s budget by $350 million – limiting its ability to determine whether U.S. residents are eligible for exchange subsidies, as well as administering financial penalties to individuals and employers who do not comply with the law’s individual and employer mandates.

 

Additional Hurdles Ahead in 2016

As fraught as was this year’s appropriations process, next year could get even uglier. A two-year budget deal that eased most sequestration cuts for 2014 and 2015 will expire next year, meaning that sequestration will return in full force in the 2016 appropriations cycle. These large-scale, across-the-board cuts have caused major angst and gridlock in Congress since they were first established in the Budget Control Act of 2011. Though few lawmakers have an appetite for the indiscriminate cuts, neither have they been able to work out an alternative that satisfies fiscal conservatives and advocates for the targeted spending programs alike.

“The big-ticket budget item that really will be the hard one is replacing sequestration in a responsible way,” said Senate Budget Committee Chairwoman Patty Murray (D-WA) in a recent interview. “Without action, without an agreement, the sequester will kick in and the effects will be devastating to defense and nondefense” spending.

Under sequestration, the top-line cap on non-defense spending will fall slightly to $492.3 billion from $492.4 billion in 2016. Additional cuts are slated for future years, affecting programs as diverse as medical research, homelessness prevention, infrastructure investments, and much more. Programs within SAMHSA’s budget fall into this category of spending, meaning they are at high risk for continued cuts in future years.

Lawmakers have proposed various ways to mitigate sequestration’s effects; for example, by redistributing the cuts in a more targeted manner or repealing them entirely. Whether and how the 114th Congress chooses to address these proposals remains to be seen.

 

Return to Regular Order?

After four years of a divided Congress, Republicans have expressed hope for a return to “regular order” in the appropriations process when they take control of both chambers in January. Rarely seen in recent years, regular order refers to the process by which each of the 12 annual spending bills is debated in committee, enacted separately by each chamber, and negotiated by a conference committee to reach a final deal before the start of the fiscal year on October 1. Major controversies over spending priorities have stymied regular order over the past several years, and these will continue to

Political experts also predict that the Republican-controlled Congress will enact a budget reconciliation bill in 2016. Used as a means for circumventing Senate filibuster rules in order to bring spending and revenue priorities into line with congressionally-approved public policies, reconciliation could be a vehicle for enacting major new fiscal priorities, such as changes to the Medicaid, or Social Security program or repealing portions of the Affordable Care Act. The National Council will be closely monitoring congressional activity on this front in 2016 and will keep readers updated on Capitol Connector.