Summary
President Joe Biden will meet with Sen. Shelley Moore Capito (R-WV) on Wednesday, June 3, to continue their negotiations over an elusive infrastructure package. While the Biden Administration is encouraged by Senate Republicans’ latest infrastructure proposal, the window for reaching a deal appears to be closing. Over the weekend, Transportation Secretary Pete Buttigieg said that “clear direction” on how to advance infrastructure legislation is needed by the time Congress returns from recess on June 7.
The two sides have moved closer to an agreement on a price tag, but they remain far apart on scope and pay-fors. The “clear direction” sought by Secretary Buttigieg may mean indications from Senate Republicans that they will provide some concessions on how to pay for infrastructure investments, which has been the primary sticking point throughout discussions with the White House. However, raising taxes and undoing other Republican tax reforms from 2017 is a “red line” for Senate Minority Leader Mitch McConnell (R-KY). Still, the Administration’s efforts to negotiate in earnest with Senate Republicans, while seemingly fruitless, are critical for securing support from moderate Senate Democrats – particularly Sen. Joe Manchin (R-WV), who has pushed for bipartisanship. The Democratic caucus will need to stick together to advance infrastructure legislation through budget reconciliation, their fallback option.
| White House | Senate Republicans | |||
| March 31 | May 21 | April 23 | May 27 | |
| Price Tag | $2.25 trillion | $1.7 trillion | $568 billion | $928 billion |
| Scope | Traditional infrastructure and nontraditional infrastructure (including home health, housing, schools, research and development, manufacturing) in American Jobs Plan | Traditional infrastructure only | ||
| Pay-Fors | Increase corporate tax rate to 28 percent (up from 21 percent), other tax reforms | Implement user fees (e.g., electric vehicles), repurpose appropriated federal funds (e.g., coronavirus relief) | ||
With the President’s fiscal year (FY) 2022 budget request, House and Senate Budget Committees will begin preparing the FY 2022 budget resolution, which sets overall spending levels and provides instructions for budget reconciliation. The nearly $6 trillion budget request includes Biden’s $2.3 trillion American Jobs Plan (WHG client summary), his $1.8 trillion American Families Plan (WHG client summary), and $1.5 trillion in discretionary spending.
Regulatory Update
Having moved into June, we can expect to see the proposed calendar year (CY) 2022 Medicare payment updates as early as by the end of the month. These include the Hospital Outpatient Prospective Payment System (HOPPS), Medicare Physician Fee Schedule (MPFS), and the End-Stage Renal Disease Prospective Payment System, among others. A majority of the proposed CY 2022 payment updates are currently pending review at the Office of Management and Budget (OMB) (see here).
In addition, OMB is now reviewing a proposed rule entitled, “Patient Protection and Affordable Care Act; Updating Payment Parameters and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule (CMS-9906).” Though no formal detail is included on the proposed rule’s contents, the Centers for Medicare & Medicaid Administration (CMS) noted in “Part 2” of the final CY 2022 Notice of Benefit and Payment Parameters that it would be pursuing additional rulemaking this year to propose new QHP issuer user fee rates (higher than those finalized by the Trump Administration). Notably, CMS also hinted it intends to “revisit” Trump-era proposals – which CMS ultimately did not finalize – that would have authorized states to use private sector entitles for enrollment in lieu of centralized Exchange website, as well as regulations governing State Innovation Waivers (i.e., 1332 waivers).