December 22, 2017

Congress Prevents Shutdown and Patches CHIP

Congress passed a continuing resolution (CR) December 21 narrowly avoiding a looming government shutdown, waiving an arcane budgetary rule mandating draconian Medicare spending cuts and funding the State Children’s Health Insurance Program (CHIP).

Congress faced a daunting list of issues before the Christmas District Work Period on December 22. Federal lawmakers hoped to reach consensus on legislation to fund the government for the rest of the fiscal year ending September 30, 2018. The subsequent agreement on total appropriations would include a deal on how to allocate those resources between defense and non-defense initiatives. Finding bipartisan offsets for a five-year extension of CHIP, a health insurance program for nine million children, was a high bipartisan priority as well.

Stabilization of the Affordable Care Act’s (ACA) individual marketplace via the creation of a reinsurance program for costly beneficiaries and long-term funding for cost-sharing reduction payments to insurance companies were two additional focal points of Congressional negotiations. The need to allocate hundreds of billions of dollars to help the Gulf Coast and California recover from recent hurricanes and wildfires further complicated the legislative agenda.

Grandiose plans for a comprehensive appropriations bill for the rest of fiscal 2018 to fund routine federal government operations and address CHIP, the ACA marketplace and disaster relief ultimately succumbed to the pressures of a shortened legislative calendar and partisan bickering. Recent Congressional approval of a sweeping federal tax reform also forced lawmakers to divert their attention from these pressing policy needs to focus on President Trump’s top legislative priority.

Instead, the CR only allocates more funds for the federal government through January 19, 2018. The dire fiscal situation facing the CHIP program, which expired at the end of September, necessitated Congress to provide enough money to permit states to continue running this program for children of low-income families and pregnant women through March 2018.

The CR also includes provisions that enable Congress to avoid PAY-GO rules, or statutorily mandated reductions in federal spending when certain targets are exceeded. The PAY-GO rules were triggered by the tax reform bill that will add about $1 trillion to the federal deficit.

The Congressional Budget Office estimated that failure to waive PAY-GO rules would result in about $140 billion in across-the-board federal spending cuts. Although subject to PAY-GO reductions, federal law prohibits Medicare from comprising more than four percent of the total cuts.

The American College of Radiology (ACR) applauds Congress for avoiding a federal shutdown, ensuring the short-term viability of CHIP and waiving the harmful PAY-GO rules that would have potentially subjected physicians, including radiologists, to harmful Medicare cuts. The ACR will continue to closely monitor the ongoing negotiations surrounding federal appropriations and CHIP.