Washington Update

Administration and Congress Reach a Budget Deal

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A compromise bipartisan federal budget plan, H.J. Res 59, that sets overall funding levels for the next two years and temporarily removes the threat of another government shutdown was approved in December by Congress and signed into law by President Obama.

The budget plan calls for spending $1.012 trillion in FY14 and $1.014 trillion in 2015, and breaks the logjam that has tied Congress in partisan knots and led to a 16-day shutdown of the government last October.

The agreement replaces the mandatory across-the-board sequester cuts, slated to take effect in January, with more targeted spending reductions for two years, and provides non-tax revenue, including new fees on airline tickets and higher pension contributions from newly hired federal employees.

The budget agreement contains a number of items of interest to academic dentistry, they are as follows:

  • Beginning in October 2014, Medicaid will permit states to delay paying claims for preventive pediatric services in order to first collect medical child support and health insurance payments from non-custodial patients. This could delay the arrival of Medicaid payments at dental clinics serving children covered by Medicaid.
  • The agreement also contains two offsets, or budget-balancing mechanisms, related to higher education. The first raises revenue by changing the formula used in the federal student loan default reduction program. The second changes the source of funding used to pay nonprofit firms for servicing student loans.

While the deal sets the topline spending numbers, it still requires Congress to allocate those funds and approve separate appropriations bills to fund agencies and programs. The government is currently being funded by a continuing resolution, which expires January 15, 2014, requiring Congress to act by that date or approve another temporary spending measure.

The outlook for the specific programmatic funding through the appropriations process remains up in the air at this time. This includes funding for the National Institutes of Health, the Ryan White Program, the Health Careers Opportunity Program and community health centers. ADEA is hopeful that funding for these programs will remain at FY12 levels as the House and Senate negotiators hash out their differences.

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