Summary
The timing of a Senate vote on a continuing resolution (CR) for fiscal year (FY) 2023, level-funding the federal government through December 16, remains uncertain. Senate Majority Leader Chuck Schumer’s (D-NY) deal with Sen. Joe Manchin (D-WV) to include reforms to energy permitting, the process for obtaining federal approval for energy projects (e.g., oil and gas pipelines), has complicated the process. Still, we do not anticipate a government shutdown.
CRs are relatively clean and typically only include provisions with broad bipartisan support. Whether the CR will include the reauthorization of the Food and Drug Administration (FDA) user fee programs, which also expires on September 30, is questionable. The CR may also include additional assistance for Ukraine as well as emergency funding to address the clean drinking water crisis in Jackson, Mississippi. Congress is not expected to provide the Biden Administration with funding requested for COVID-19 and monkeypox ($22.4 billion and $3.9 billion, respectively). Congressional Republicans have shown no appetite for appropriating additional funding, as evidenced at the recent hearing on the monkeypox response (WHG summary).
FDA User Fees
Congress has until September 30 to reauthorize the Food and Drug Administration (FDA) user fee programs for the next five years. Lawmakers are looking to attach the reauthorization of the user fee programs on to the CR. While many members are pressing for a timely and clean reauthorization of the user fee package, debate continues on which, if any, policy riders to include. Reform of the agency’s Accelerated Approval Pathway is a bipartisan provision that could be included in the final package. Other policy riders, such as oversight of diagnostic tests, cosmetics, and dietary supplements, could be included in a year-end omnibus.
If Congress fails to pass reauthorization before September 30, FDA Commissioner Robert Califf has indicated that carryover funding for the prescription drug user fee program (the program that would run out of funding first) would last approximately 5 weeks into the new fiscal year. At that point, the agency would have to prepare to issue furlough notice to employees funded by the user fees. Notably, the reauthorization of the FDA user fee programs has only been delayed once in the past 25 years.
Regulatory Update
The proposed rule to fix the “family glitch” arrived at the Office of Management and Budget (OMB) for review on Thursday. In April, the Treasury Department and Internal Revenue Service (IRS) issued a proposed rule to revise criteria for Affordable Care Act (ACA) premium tax credit (PTC) eligibility in the individual market. In short, the proposed rule would fix the “family glitch,” which prevents family members from accessing PTCs if an employee’s self-only coverage meets the affordability threshold. As a result, family members could qualify for a PTC and purchase subsidized individual coverage on the ACA Marketplace for the 2023 coverage period and beyond. The final rule is forecasted for December 2022.