This Week in Washington – Dec. 4-8
Conference negotiations between the House and Senate on H.R. 1, the tax reform legislation, began in earnest late this week. Lawmakers look to resolve their differences quickly in the hope of passing a final version through both chambers next week.
Last night, GOP conferees met informally to reduce the number of outstanding issues for the full conference committee to consider. While the number of outstanding items isn't yet known publicly, there is every indication that it will be under 20, as members look to use the Senate version of H.R. 1 as a baseline. In general, this situation is better than the House bill being the baseline for finance issues that matter to hospitals; and in particular, the fate of private activity bonds. As was reported last week, PABs went unmentioned in the Senate bill, meaning that if the Senate position prevails in conference, no changes will be made to their tax-exempt status. The House bill removed their tax exemption. Advance refunding bonds are in a much trickier spot, because their tax-exempt status was removed in both bills. However, Senators are working on strategies as well to remove or narrow PABs' taxation.
The upshot on the conference committee's trajectory is that speed is of the essence. If speed is what matters, the shortest distance between here and passage is to take as much of the Senate bill as possible since it already has 51 votes in the upper chamber and complies fully with its necessary budget reconciliation instructions. If too many House items and too few Senate items are included in the final mix, it could endanger the vote of Senator Susan Collins (R-ME). Sen. Collins has indicated she intends to stick by her guns on various health care-related promises she extracted from Senate Majority Leader Mitch McConnell (R-KY) and President Donald Trump. She also wants the medical expense deduction salvaged and Affordable Care Act stabilization bills passed and signed.
Also of importance, next Tuesday is the special election in Alabama to fill the unexpired term of former Senator and now Attorney General Jeff Sessions. Neither Republican contender Roy Moore nor Democratic nominee Doug Jones are seen as reliable allies to passage. Per the law, the winner of this contest will be considered a Senator upon election, meaning that once the results are certified, likely near Christmas, he is entitled to be seated. In other words, there isn't much time, and there isn't much wiggle room.
At this point, the prognosis on passage is good, likely within a week. Congress needs to clear the decks of tax reform before they can begin lining up the legislative trains to finish the year. Among the must-pass items in 2018 are Medicare extenders and Children's Health Insurance Plan reauthorization. While it's possible to kick the can down the road a few months on both items, resolution of hot-button issues like the Affordable Care Act stabilization and future of the individual mandate may clear the air for both to not be used for any sour grapes over the Republicans' failed effort to repeal Obamacare.
The Kansas Hospital Association continues to work to ensure that the low-volume hospital adjustment is extended as long as possible and avoid any change in payments to Critical Access Hospitals' use of swing beds. As these and other matters develop during the end of the year rush, we will continue to keep you updated.