Congressional Appropriators Considering Proposal to Exempt Some 2021 Health Funding from Budget Caps

With all the uncertainty surrounding the COVID-19 pandemic’s duration, ANCOR is sharing how Congress is thinking through the 2021 budget process so that our members can be aware of funding topics that might arise for Medicaid in the fall. That is when Congress will be finalizing fiscal year 2021 (FY21) budget legislation. As reported by Politico Pro:

“House appropriators agreed on Wednesday to consider a plan proposed by former Centers for Disease Control and Prevention Director Tom Frieden that would move federal dollars meant to guard against health threats into a special fund that isn’t subject to fiscal 2021 spending limits.

‘Future health and economic security can best be protected by changing the way we allocate funds to protect us all from health threats,’ Frieden said in opening remarks during a hearing held by the House Appropriations Labor-HHS-Education spending panel. ‘We have seen the limitations that caps and sequestrations cause for discretionary funding. And we have seen that even mandatory funding doesn’t ensure stable support.’

‘We propose a new approach for specific public health programs that are critical to prevent, detect and respond to health threats,’ he said. ‘We call this the Health Defense Operations budget designation, and it would exempt critical health protection funding from the Budget Control Act spending caps so our public health agencies can protect us.’

Oklahoma Rep. Tom Cole, the ranking Republican on the panel, said it was ‘a very good idea’ that Congress should consider. Chairwoman Rosa DeLauro (D-Conn.) recently told POLITICO that she and Cole have spoken about the limits imposed by fiscal 2021 budget caps for health programs, which could hamper the federal government’s response to the coronavirus pandemic.

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The two-year budget deal signed by President Donald Trump last summer, H.R. 3877 (116), cemented $632 billion in non-defense funding this fiscal year, with just a $2.5 billion increase for fiscal 2021, which begins on Oct. 1.

In the coming weeks, House and Senate appropriators must figure out how to divvy up that $634.5 billion, distributing the additional $2.5 billion to domestic programs across the federal government — many of which are expecting at least a slight funding boost.

A pot of money for health defense programs that isn’t subject to fiscal 2021 spending limits would give appropriators greater flexibility in how they fund programs that could help fight the pandemic.”

The spending climate in broader political circles: ANCOR notes that this idea might face resistance in social circles that influence lawmakers. There, how much to spend on the crisis and health programs, including Medicaid, is still very much up for debate. For example, former Trump administration official and vocal administration ally Brian Blasé argued that Medicaid FMAP bumps can be a “gimmick”. In contrast, experts – including Georgetown University researchers – are arguing for stronger FMAP funding.