February 2010 : Government Affairs


Government Affairs

At the beginning of the 111th Congress, there was a massive shift toward pro-active legislating. Coming off the 2008 elections, Democrats enjoyed large majorities in the House, a filibuster-proof majority in the Senate, and control of the White House. The first policy output was a massive, nearly $800 billion stimulus plan. The House then proceeded to tackle other major policy issues, such as climate change, health care reform, and financial services regulatory reform. The Senate has legislated at a slower pace, but is poised to move health care reform, climate change, and regulatory reform.

With 2010 being an election year, a flurry of legislation is expected in the first half of the year, and then the political races will take precedence, with major legislative action minimal. We would like to take this opportunity to briefly review the major legislative action from this session and provide thoughts on 2010.

Legislative Overview

Stimulus Legislation (American Recovery and Reinvestment Act of 2009, “ARRA”)

Signed into law on Feb. 17, 2009, the ARRA aimed to provide an “economic stimulus” for a sluggish economy by focusing on:

  1. Creating and preserving jobs
  2. Spurring economic activity through tax cuts, tax incentives and direct aid
  3. Providing transparency and accountability for the use of funds.

The $787 billion legislation allocated $288 billion in various tax benefits, $275 billion for contracts, grants and loans, and $224 billion for entitlements.
The legislation has provided opportunities for contracts and grants across multiple industries, with a specific focus on infrastructure.

Climate Change (H.R. 2454, the American Clean Energy and Security Act, “ACES”)

The House passed comprehensive legislation seeking to reduce greenhouse gas emissions, lessen dependence on fossil fuels, encourage development and use of renewable energy sources, and create green jobs.

The Senate EPW Committee reported a bill out of committee (Kerry-Boxer), but action has since stalled. Kerry is working with Lindsey Graham and others to find a third-way bill that will balance the concerns of environmentalists, utilities, business, consumers and resource groups (coal, nuclear, natural gas, etc.).

After the Copenhagen summit concludes, the Senate will return to the issue in 2010. Senator Kerry spoke at Copenhagen and promised a bill in 2010. Should the Senate pass a bill, a lengthy conference is expected with the House, as emissions targets, allowances and the functioning of a cap-and-trade system could vary between the Houses.

Healthcare Reform (H.R. 3962, the Affordable Health Care for America Act; H.R. 3590, the Patient Protection and Affordable Care Act (Senate bill))

The House passed comprehensive health care reform legislation seeking to provide health insurance for the uninsured, guarantee access to affordable health care and reduce delivery costs, and reform the health insurance marketplace.

Among the many provisions of the House bill include the following:

  • Creation of an exchange for consumers to shop for public and private insurance plans
  • Inclusion of a public insurance option to compete with private insurance plans within the exchange
  • Non-discrimination for coverage, including pre-existing conditions
  • Prohibits lifetime and annual limits on benefits
  • Limits variable rates due to health status, gender or other factors
  • Proposes an essential benefit package that will serve as the basic benefit package for coverage in the exchange and will become the minimum quality standard for employer plans
  • Inclusion of preventive services with no cost-sharing, mental health services, oral health and vision for children, and out-of-pocket caps in the essential plan
  • Offers credits and subsidies to make coverage affordable
  • Expands Medicaid eligibility
  • Individual and employer mandates to obtain/provide coverage
  • Investment in health care workforce
  • Various reforms aimed at cost-savings.

The Senate passed H.R. 3590, their version of the health care reform bill. This bill differs from the House bill primarily in that it lacks a public option and pays for the bill with a tax on high-cost “Cadillac” health benefits and targeted industry fees.

2010 Legislative Outlook

The year 2010 is an election year for the House and certain Senators.

Potential major legislation includes:

  • Completion of health care reform legislation
  • Climate change/energy legislation
  • Targeted job creation/stimulus legislation
  • Estate tax Reform
  • Annual budget and appropriations
  • Discussions on immigration reform.

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