January 24, 2018

CHIP Extended as Congress Ends Government Shutdown

Since Congressional Democrats and Republicans were unable to strike a bipartisan deal, funding for the federal government expired on Saturday, Jan. 20 prompting a three-day shutdown which officially ended on Monday, Jan. 22.

The shutdown of the federal government commenced on the one year anniversary of Donald Trump’s inauguration as the 45th President of the United States.

The House of Representatives initially passed a continuing resolution (CR) on Jan. 18 to provide ample federal funding through Feb. 16. In a bid to attract Democrats and moderate Republicans, the CR legislation also included a six-year extension of the Children’s Health Insurance Program (CHIP), a joint federal and state policy that provides low-cost health coverage to approximately eight million children of families that earn too much money to qualify for Medicaid but not enough to afford private insurance. Long-term funding for CHIP expired in September 2017.

To placate demands from conservative Republicans, the House passed CR delayed three taxes enacted by the Patient Protection and Affordable Care Act (PPACA), commonly referred to as Obamacare. The bill postponed PPACA’s medical device tax for two years until calendar year 2020 and its “Cadillac” tax on high-end insurance plans for two years until calendar year 2022. Although it will be assessed in calendar year 2018, Congress also delayed the “health insurance tax (HIT),” an excise tax assessed on premiums associated with policies sold by health insurance companies, until calendar year 2019.

Senate Majority Leader Mitch McConnell (R-KY) attempted to pass the House CR in the upper chamber on Jan. 19. The sticking point for Senate Democrats, however, was the decision by Republican Congressional leaders to not include a legislative solution for the “Dreamers,” a group of approximately 800,000 people who immigrated to the United States as children and received temporary protection from deportation under the Obama-era “Deferred Action for Childhood Arrivals (DACA)” program. In September 2017, President Trump announced the DACA program would officially expire on March 5, 2018. In lieu of additional executive action, the president directed Congress to pass legislation codifying the policy into law.

Although in favor of a permanent solution for DACA, Congressional Republicans preferred to pass legislation dealing with the Dreamers separate from the pending government funding bill. Senate Democrats rejected this strategy and opposed the House passed CR.

The shutdown proved short-lived after a bipartisan group of approximately 25 bipartisan senators convinced Senate Majority Leader McConnell and Senate Minority Leader Chuck Schumer (D-NY) to accept a strategy for funding the government and addressing the Dreamers issue. McConnell agreed to hold a vote on a permanent DACA solution at a later date in exchange for passing a new CR funding the government through Feb. 8, extending CHIP for six years, and delaying the PPACA taxes. The vote, however, will only be held as long as the Democrats agree to avoid another government shutdown. The House is not bound by the Senate DACA agreement.

The ACR’s Government Relations office will continue to keep all members abreast of the latest surrounding government funding for the 2018 Fiscal Year via Advocacy in Action eNews.