by Christoper E. Condeluci, Principal and sole shareholder of CC Law & Policy PLLC in Washington, D.C.
I Told You There Would Be DRAMA
- Shortly after Congressional Democrats and the Biden Administration successfully enacted their COVID Stimulus Package (better known as the “American Rescue Plan”) back in March 2021, everyone turned their attention to the Democrats’ efforts to enact BOTH the “Hard Infrastructure” Package as well as a “Soft Infrastructure” Package. AND, with Democrats holding the keys to Washington, DC (with Democrat-control of the House, Senate, and the White House), most policy analysts – including me – believed that the Democrats could indeed enact BOTH Packages by year’s end.
- Analysis: BUT, many folks – including me – overlooked that it was NOT easy for Congressional Democrats to enact the American Rescue Plan in the first place. Sen. Manchin (D-WV) had issues with the overall cost of that Package (it was $1.9 trillion), and Sen. Manchin did NOT like the temporary nature of some of the provisions included in the American Rescue Plan. Sound familiar, eh?!?
BUT, my prediction that “there would be DRAMA” was NOT influenced by Sen. Manchin and how the American Rescue Plan exercise ultimately played out. Rather, influences on my prediction date back to the 2020 election season, where progressive and moderate Democrats battled it out on issues like Medicare-for-All and the overall role of the government. We all have to remember that – as an example here – about 95% of Democrats supported a government-run Medicare-for-All-like health care system. Do you know who was among the 5% on the other side of this issue? Answer: PRESIDENT BIDEN. Actually, in the Democratic Presidential Primary debates then-Candidate Biden was the only individual who did NOT raise his hand when all of the Candidates were asked whether they supported Medicare-for-All. I am NOT trying to make this about Medicare-for-All. I am just trying to illustrate for you that there were fissures forming between progressive and moderate Democrats WELL-BEFORE Sen. Manchin was even a part of the equation. Fast-forward to the last 6 months, we saw these fissures on FULL DISPLAY. AND – at least in my opinion – it’s these fissures (progressives vs. moderates) that contributed to the BBBA NOT getting a vote before the end of 2021. It’s NOT necessarily ALL on Sen. Manchin. Actually, if you were to think back to early- to mid-2020 when these fissures started to become evident, Sen. Manchin was NOT even on anyone’s radar, and at the time, most policy analysts considered Sen. Manchin a relatively non-impactful legislator, having very little sway on policy matters. Oh, how times change…
I Also Told You It Would Take a LONG TIME
- Throughout September and October of this year, House and Senate Democratic Leadership continually told everyone: “WE WILL HAVE A BILL.” The implications of this – which were often times confidently reported by the media – was that Congressional Democrats could actually get the BBBA across the finish line by Halloween.
- Analysis: BUT, as I told you, it’s NOT as easy as Leadership – and the media – were making it out to be.
That’s because you don’t really “HAVE A BILL” – and in particular, a “reconciliation” bill – UNTIL (1) the bill gets to the Senate AND (2) the Senate Parliamentarian has the opportunity to review the legislative language to determine if the underlying provisions violate the “reconciliation” rules or not. All of that takes a TON of TIME. And that’s NOT because the Senate Parliamentarian (Elizabeth MacDonough) is slow in doing her job. It’s because 50 Senators need to agree on the legislative language that makes up the underlying “reconciliation” bill BEFORE the Senate Parliamentarian can actually get to work. And what happened to Congressional Democrats is that (1) they could NOT get 50 Senators to agree on the BBBA’s underlying legislative language, soooooo (2) they could NOT get all of the necessary rulings they needed from the Parliamentarian before the BBBA could be brought to the Senate floor. Again, the process takes a LONG TIME. So long that – NOW – Congressional Democrats and the Biden Administration ran out of time.
The Overall Cost of the BBBA Continues To Be an Issue
- In my opening statement above, I mentioned $3.5 trillion. Why? We all know that the BBBA – in its current form – hovers around $1.75 to $2 trillion, right?!?
- Analysis: Well, the Congressional Budget Office (CBO) was asked to assume that ALL of the provisions in the current iteration of the BBBA were funded for 10 years (instead of assuming that, for example, the Child Tax Credit was only extended for 1 year; and instead of assuming that free pre-school was funded for only 6 years; and instead of assuming that the “enhanced premium subsidies” were only available through 2025). And based on this 10-year projection, CBO estimated that this version of the BBBA would cost around $3.5 trillion.
Interestingly – but I suppose not surprisingly – Congressional Democrats and the Biden Administration were quick to point out that CBO was merely estimating a “hypothetical” bill. And to an extent, they are correct, this is a “hypothetical.” BUT, it is important to understand that primary reason why Congressional Democrats and the Biden Administration are ONLY funding the Child Tax credit for 1 year; and ONLY funding free pre-school for 6 years; and ONLY funding the “enhanced premium subsidies” through 2025 is to keep the cost of the BBBA to around $1.75 to $2 trillion (something that moderates in the House and Senate demanded). AND, it is super important to understand this: Congressional Democrats and the Biden Administration are making these provisions TEMPORARY because they expect that if the Democrats remain in charge through 2028, they will EXTEND all of these provisions to future years (say, through 10 years from now). Even if Democrats lose the majority in the House or Senate, and/or they end up losing the White House in 2024, Congressional Democrats and the Biden Administration hope that these programs become so popular that Republicans are forced to extend them. Soooooooo, if we start with the base-line understanding that (1) Congressional Democrats and the Biden Administration – in their heart-of-hearts – WANT these provisions to be funded at least through 10 years, and we also understand that (2) the whole reason why these provisions are time-limited is to keep the overall cost of the BBBA around $1.75 to $2 trillion, you fully grasp that IF Congressional Democrats and the Biden Administration had their way, the ultimate cost of the BBBA would be…wait for it…around $3.5 trillion. Sooooooo, it’s not so much of a “hypothetical” is it? Note, Congressional Democrats and President Biden have said that they would make sure that this “hypothetical” BBBA is fully paid for. And BTW, I take them at their word, and I believe they do indeed want to pay for all of this increased government spending. BUT, the hardest thing for any political party (be it Republican or Democrat) is to come to an agreement on proposals to pay for things (e.g., tax increases and spending reductions). Sooooooo, suggesting that a $3.5 trillion package would be fully paid is a noble goal (whether pledged by Republicans or Democrats), but it is itself a “hypothetical.”
Will the BBBA – In Any Form – Get Enacted Into Law?
- As stated above, that is the $1.75 trillion/$2 trillion/$3.5 trillion question. And – at least in my opinion – it will come down to (1) Sen. Manchin or (2) Sen. Sinema (D-AZ).
- Analysis: It may seem like I am defending Sen. Manchin, but I am NOT trying to do that. I am just trying to call-it-like-I-see-it. And one thing I see – much to many Democrats’ chagrin – is that Sen. Manchin has been consistent on what he opposes and what he supports, which dates all the way back to this Summer.
Sooooooo – while again super frustrating for many Democrats – if Congressional Democrats and the Biden Administration want to enact the BBBA at least in some form, it is advisable to move forward with parts of the BBBA that Sen. Manchin supports, which include, among other things, (1) extending a “means-tested” Child Tax Credit; (2) offering “means-tested” free pre-school funding; (3) extending the “enhanced premium subsidies,” but NOT making the premium subsidies available in Non-Medicaid Expansion States; (4) certain climate change reforms, but NOT things like government subsidies for certain electric cars or a fee on methane emissions; (5) allowing the government to negotiate the price of prescription drugs; and (6) even tax increases on corporations and high-income earners. I will note, you have heard a lot of policymakers, political pundits, and folks in the media say that “1 single Senator should NOT be able to derail President Biden’s and Congressional Democrats’ economic agenda.” Ummmmm, ask Republicans how they felt about late Sen. McCain (R-AZ) and his famous thumbs-down on ACA “repeal and replace.” It’s just how the process works people. 1 Senator can indeed “derail” the policy goals of the majority of a particular political party, including the goals of a sitting President in that same political party. Having said all of that, I think 1 or 2 things will happen come January and February 2022:
- On the one hand, progressive Democrats balk at agreeing to all of the areas of the BBBA that Sen. Manchin supports (as discussed above), and the pressure and the ill-will directed toward Sen. Manchin is so vitriol that it pushes Sen. Manchin to switch parties (by becoming an Independent and caucusing with Republicans). In this universe, the BBBA is dead.
- On the other hand, progressive Democrats realize that they have no other choice but to agree to Sen. Manchin’s wishes, and progressives agree to a BBBA that looks a lot like the BBBA format noted above. Here, progressive Democrats claim victory for, among other things, drug pricing reforms and the extension of the “enhanced premium subsidies”; along with much-needed funding for low- and middle-income families with children through the extension of the Child Tax Credit and free pre-school; and most importantly, climate change reforms, minus government subsidies for union-made electric vehicles and fees on the oil and gas industry. In this universe, the BBBA is enacted and Congressional Democrats go into the mid-term election season with a full-head of steam. BUT, in this universe, Sen. Sinema looms large if BOTH Sen. Manchin and progressive Democrats want to increase taxes to pay for this form of the BBBA.
Vaccine Mandates for Private Employers
- As you all know, on September 9th, President Biden announced a series of “vaccine mandates”: (1) for Federal employees and Federal contractors; (2) for private employers that receive Federal funds (through, for example, contracting with Medicare and Medicaid); and (3) for private employers with 100 or more employees that do NOT receive Federal funds. These vaccine mandates were swiftly met with lawsuits to suspend and set-aside these requirements.
- Analysis: For purposes of this update, I will ONLY focus on #2 and #3 above, and I will chronicle where things currently stand in the courts.
Private employers with 100 or more employees that do NOT receive Federal funds:
- On November 4th, OSHA issued guidance detailing how this vaccine mandate will work.
- On November 5th, the 5th Circuit Court of Appeals announced a nationwide suspension of OSHA’s guidance.
- On December 17th, the 6th Circuit struck down the 5th Circuit’s suspension, meaning that OSHA’s guidance snaps back into place.
- OSHA responded with informal guidance with updated effective dates. For example, implementing a vaccine program and also requiring employees to wear facial coverings will be effective January 10th. For those employers choosing weekly testing, the weekly testing must begin on February 9th. OSHA indicated that the agency will NOT impose penalties on employers who do NOT comply with these requirements before these effective dates, but OSHA asks employers to undertake a “good faith” effort to comply in the run up to Jan. 10th and Feb. 9th.
- On December 20th, challengers to OSHA’s guidance asked the Supreme Court to over-rule the 6th Circuit and suspend OSHA’s guidance once again. It is currently unclear when the Supreme Court will rule. So at least for now, OSHA’s guidance is once again EFFECTIVE, and implementation/enforcement will start January 10th.
Private employers receiving Federal funds (e.g., contracting with Medicare and Medicaid):
- On November 4th, HHS issued guidance detailing how this vaccine mandate will work.
- On November 29th, a District Court suspended this vaccine mandate in 10 States.
- On November 30th, a District Court announced a nationwide suspension this vaccine mandate
- On December 15th, the 5th Circuit limited this nationwide suspension to the 14 States that filed the lawsuit in District Court (plus the 10 States that were party to the November 29th ruling).
- This means that as of December 15th, this vaccine mandate is effective in all States except: Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina, Utah, West Virginia, Kentucky, Ohio, Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota and New Hampshire.
- It is unclear whether and when the Supreme Court will be asked to step in.
Free COVID Tests for Individuals Covered By Private Health Plans?!?
- On December 2nd, President Biden announced that the Administration will be issuing guidance – by January 15th – that would require insurance carriers and self-insured health plans to pay for the costs of at-home COVID tests for covered participants.
- Analysis: Despite this announcement, NO ONE has ANY idea how this free-testing mandate would or could work.
And – at least from where I am standing – I CANNOT see how the Administration has the authority to require private health plans to pay for at-home COVID tests. It would appear that the Biden Administration is going to try to look to the first 2 COVID Stimulus Packages enacted back in 2020 as authority to cover the at-home tests. Under those Packages, insurance carriers and self-insured plan are required to pay for a COVID test that a physician finds is “medically appropriate” for a covered participant for as long as the COVID public emergency is in place. As an FYI, the COVID public emergency is still in place. BUT, the problem I see is this: Are at-home COVID tests “medically appropriate”? In some cases, yes, a physician may request an at-home COVID test because it is “medically appropriate” for the participant. BUT, what about instances where the participant just wants to take at at-home COVID test without consulting a physician? In this case, this test was not deemed “medically appropriate” by a physician. Instead, the participant simply went to the pharmacy and picked up an over-the-counter at-home test to see if they are COVID positive (or negative). The above point is super important because HHS has already issued guidance confirming that unless a COVID test is found to be “medically appropriate” by a physician, the carrier or plan does NOT have to pay for the COVID test. In addition, OSHA’s vaccine mandate guidance (that is once again effective) specifically states that employers do NOT have to pay for the COVID tests for those employees who must undergo weekly testing as called for under OSHA’s guidance. In other words, there is precedent where insurance carriers, self-insured plans, and employers are NOT required pay for a COVID test. Is the Biden Administration about to change this precedent? Again, I CANNOT see how the Administration gets from here-to-there without an act of Congress. Maybe the Biden Administration is coming to the same conclusion I am coming to. For example – just today – President Biden announced how his Administration intends to battle the Omicron variant. Interestingly, there was nothing in this announcement reiterating the requirement that private health plans are going to have to pay for at-home COVID tests. Instead, the President announced that the Federal government will make available at-home COVID tests – FREE – to anyone who wants an at-home test.