The Senate just voted to reauthorize the Individuals with Disabilities Education Act (IDEA) 95-3. The next action will be for the Senate to conference with the House on HR 1350 that was passed in April 2003.

The House bill would allow governors to set the attorneys' fees in their states for IDEA cses in which parents prevail. Critics say the restrictions would cut down on the availability of lawyers for such cases and especially penalize poor families.

A Senate Republican led task force has recommended a number of proposals to limit medical liability awards, make it easier for small businesses to band together to purchase coverage and create tax credits for individuals who purchase insurance. The estimated cost for the proposals would be $93 billion over five years.

Task force members are planning on producing a broad bill but conceded that the package probably would not pass the chamber.

Several of the initiatives are a rehash of proposals already offered and rejected. The medical liability legislation has failed to garner enough support to bring it to a vote and association health plans for small businesses have encountered stiff opposition.

In addition to these proposals, the task force also recommended programs aimed at expanding community health clinics and allowing faith-based organizations to get federal funds to run them, expanding drug-discount card savings beyond the Medicare population and creating incentives to encourage uninsured young adults to sign up for coverage.

The task force remained divided on how to make it easier for small businesses to increase purchasing power through association health plans. Members were divided on whether or not to allow businesses to bypass individual state regulations. Republicans say their plan would expand coverage for between 21 million and 29 million currently uninsured Americans.

On the House side, Republican leaders are pursuing a parallel strategy of passing proposals on these issues for a second time in the 108th Congress.

The House is scheduled today to take up three bills that mirror many of the administration’s proposals. They will consider two measures virtually identical to bills the House already passed. The first, HR 4281, would allow Association Health Plans to sidestep some state mandates, while the second, HR 4280 would cap non-economic malpractice awards at $250,000. The third bill, HR 4279, would allow employees to transfer up to $500 of unused funds in flexible savings accounts to the newly created health savings accounts or the following year’s flexible savings accounts.

Peyser Associates clients and avid readers of peyser.com will not be surprised to hear that House Appropriations Committee Chair Bill Young (R-Florida) on Wednesday instructed subcommittee chairs to begin working on their spending plans for the fiscal year beginning October 1. Committee staff are saying the plan is to have all 13 bills through the full committee by late July. Specific allocations of funding for each subcommittee have been discussed between Young and the subcommittee chairs. While the full committee must approve those allocations before mark-ups can occur, subcommittee chairs have enough to go on now to begin their planning.

This news confirms our expectation that House mark-ups could begin in mid-June. In the days ahead, we will know more about which subcommittees are expected to move when.

The Senate is not quite so far along as the House, but we expect similar movement there after the Memorial Day recess.

Yesterday, the Senate voted 92-5 for a bill that would create $170 billion in new tax breaks for business while also cracking down on a number of tax shelters. The $170 billion in corporate tax cuts over the next decade would replace export subsidies previously granted to U.S. firms by Congress that prompted $4 billion in retaliatory tariffs by the European Union.

It would reduce income taxes for U.S. manufacturers and includes more specific provisions that have been characterized by critics as a windfall for special interests but defended by supporters as incentives needed for job creation. The five senators voting against the bill were Judd Gregg (R-New Hampshire), Jon Kyl (R-Arizone), John Sununu (R-New Hampshire), Bob Graham (D-Florida) and Ernest Hollings (D-South Carolina).

The bill would also allow U.S. companies to bring profits earned overseas back to this country at a discounted rate for one year, put new limits on the outsourcing of work by federal contractors and make it less profitable for companies to move headquarters abroad to avoid U.S. taxes.

The $170 billion price tag would be offset by the repeal of the export subsidies and by curbing a number of corporate tax abuses by increasing penalties for violations, making it easier for the Internal Revenue Service to pursue tax shelters and other such steps.

Today, the Senate is expected to move quickly and on a bipartisan manner on the Reauthorization of the Individuals with Disabilities Education Act (IDEA).

IDEA is the main federal education program for the nation's 6.5 million disabled students.

Senator Judd Gregg (R-New Hampshire), chairman of the Health, Education, Labor and Pensions Committee (HELP), worked with ranking Democrat Edward Kennedy of Massachusetts to write the underlying bill. The HELP committee passed that underlying bill almost a year ago - but funding levels were left out of the bill so that it could be debated on the floor.

Senator Tom Harkin (D-Iowa) and Chuck Hagel (R-Nebraska) have offered an amendment that would increase funding by $2.2 billion annually over the next eight years to get to 40% of the average per-pupil cost of educating every child with a disability - the amount the federal government authorized in the original 1975 law to reimburse states.

Earlier today, the Senate defeated an effort to extend federal unemployment benefits.

Democrats tried to attach the benefit to a corporate tax bill. But on a 59-40 vote in the Senate, they fell short of the 60 votes they needed to overcome objections that extending the benefits violated last year's budget agreement.

The amendment would have offered emergency federal unemployment benefits for six months, temporarily giving 13 more weeks of assistance to workers who have exhausted their state benefits which generally last 26 weeks.

The amendment was offered by Senators Maria Cantwell (D-Washington) and George Voinovich (R-Ohio). Senator Ben Nighthorse Campbell (R-Colorado) was considered a swing vote but stuck with the GOP leadership while Senator Kerry (D-Massachusetts) was not present.

This is the second time that Democrats have tried to extend unemployment benefits. With the support of 12 Republicans, the Democrats tried earlier this year, but the measure failed by a narrow margin.

As soon as tomorrow, the Senate may take up a bill that would reauthorize the Individuals with Disabilities Education Act (IDEA). IDEA is the main federal education program for the nation's 6.5 million disabled students. It guarantees special-needs children a free public education in the "least restrictive environment" and provides federal assistance to states and school districts.

Senate Majority Leader Bill Frist (R-Tennessee) said that the Senate would take up the bill after it finishes S 1637, a corporate tax bill.

In 1975, the original law authorized the federal government to reimburse states for up to 40% of the average pupil cost of educating every child with a disability. Congress is trying to reach that 40% percent level. The President's fiscal 2005 request only covers 20% of those costs.

Senators Tom Harkin (D-Iowa) and Chuck Hagel (R-Nebraska) have offered an amendment that would increase funding by $2 billion annually over the next eight years to get to the 40% level.

The bill also would streamline student discipline measures which critics say are too lenient toward special needs children with violent behavior.

It is perhaps indicative of the torpor of this congressional session that even the smallest sign of movement on important legislation is a cause for optimism. Recent soundings of some of our contacts on Capitol Hill have caused us to be optimistic that we may see some action on key appropriations bills before the August recess.

For months, it has been an article of faith in Washington that the only appropriations bills with a hope being completed by September 30-- indeed by the November elections-- have been Defense, Military Construction and Homeland Security. While recent contacts we've had confirm that, they do give us reason to believe that some substantial work may occur on some other appropriations measures this summer..

The present hold-up is due to the lack of an agreed-upon budget resolution between the House and Senate GOP leaderships. They are hung-up over the Senate's insistence on re-instating a relic of the 90's -- the "pay-go" rule. The quaint concept behind this rule is that any spending increase or tax cut beyond a baseline amount must be "paid for" by an equal spending cut or tax increase.

Ideally, in terms of the rules of the congressional budget process, a budget resolution should be in place before the appropriations subcommittees begin action. The resolution serves as the basis for allocations of Budget Authority to each subcommittee. In the absence of an agreement between the House and Senate on a budget, there is precedent for each body deeming its resolution to be the basis for subcommittee allocations.

We expect that if the budget dispute is not resolved by Memorial Day, the chairs of the House and Senate Appropriations Committees will ask their leaders for permission to move ahead with allocations based on their respective budget resolutions. This could lead to House subcommittee action beginning in mid-June and Senate subcommittee action in July.

We are in frequent touch with several subcommittees in both the House and Senate and will keep our clients and friends posted on developments.

President Bush asked congressional leaders this week for an additional $25 billion for military action in Iraq and Afghanistan. This is a reversal of the administration's earlier insistence that no money would be needed until next year. While many speculated that a supplemental would be requested, conventional wisdom was that it wouldn't be requested until after the November presidental elections.

The announcement this week is certain to trigger more election-year sparring over administration policy in Iraq.

The administration has launched an offensive aimed at countering Democratic criticisms that new drug discount cards are too confusing and only offer meager savings to senior citizens.

Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, has estimated the cards would save seniors 10% to 17% off the average retail price for name-brand drugs.

The drug cards were created by last year’s Medicare law and serve as an interim mechanism to help seniors with health costs until a full prescription drug benefit is created in 2006.

Democrats say the drug cards are confusing and offer little if any savings from prices already available to consumers at online pharmacies like drugstore.com and Costco.com.

McClellan predicted that prices will drop as card issuers and drug manufacturers begin to see what competitors are charging and negotiate better deals. Drug card issuers –including health insurers and pharmacies – can change their prices once a week. Seniors may only switch cards once after initial enrollment.

McClellan rejected a call from congressional Democrats to implement a 30-day “grace period” that would allow seniors to change cards after they sign up. He instead urged seniors to wait to sign up and compare prices carefully.

CMS is still opposed to liberalizing importation of prescription drugs from countries where they often sell for less than in the U.S.

The issue of drug prices is important to voters this election year, and many lawmakers on both sides of the aisle have responded by pushing for legislation to allow importation. Secretary Tommy Thompson has acknowledged that the issue had gained such momentum that an importation law could pass this year.

A bill to provide $5.2 billion over three years to improve the nation's transit security systems was introduced and marked in a Senate Banking Committee business meeting May 6.

The bill--announced by Chairman Richard Shelby (R-Alabama), Ranking Member Paul S. Sarbanes (D-Maryland) and Subcommittee on Housing and Transportation ranking member Jack Reed (D-Rhode Island)--would create a needs-based grant program within the Department of Homeland Security (DHS) to identify risks and vulnerabilities within transit systems across the country. "The Public Transportation Terrorism Prevention Act" would require DHS to develop strategies for alleviating those risks and create a framework for government agency coordination.

The size of the U.S. transportation system, which includes 3.9 million miles of roads, over 100,000 miles of rail, 600,000 bridges, more than 300 ports, and almost a thousand train and subway stations, provides a substantial number of attractive targets to terrorists and simultaneously makes it difficult to provide the level of security associated with air travel.

The bill would provide funding through three grant sources.

1. Capital Grant Program: Would provide $3.5 billion for security infrastructure such as surveillance, fencing, redundant-systems equipment, communications and tracking equipment, and detection systems for chemical, biological, radiological and explosive agents.
2. Operation Grant Fund: Would provide $800 million in 2005, $500 million in 2006, and $200 million in 2007 for workforce training, public awareness campaigns, canine patrols, and costs associated with events of national or international importance.
3. Research Grant Fund: Would provide $200 million for the study of chemical, biological, radiological or explosive detection technologies, imaging technologies, and others which may have the potential to be effective in deterring terrorist threats.

Republican leaders in the House and Senate were unable to resolve their differences with the White House over funding totals in the transportation reauthorization bill last night and admitted they will have to work out the funding total in conference. Whether lawmakers will actually be able to go to conference remains to be seen, as Senate Democrats are refusing to let Senate Majority Leader Bill Frist (R-Tennessee) name conferees, a matter that could be put to a vote later this week. Despite recent indications that the White House would support a $275 billion bill, up from its previous funding ceiling of $256 billion, Republican lawmakers and White House Chief of Staff Andrew Card failed to reach an agreement during a meeting that began late in the day of May 4.

The Bush administration has threatened to veto both S. 1072, the $318 billion Senate bill, and H.R. 3550, the $284 billion House-passed measure. Both bills exceed the administration's preferred $256 billion spending total, and House Speaker Dennis Hastert (R-Illinois) and Frist do not want to force the White House to veto popular, job-creating legislation in an election year.

On April 29, the White House met with the Republican leadership and agreed the three sides should come to an agreement on the funding total for the transportation bill before proceeding with the conference to reauthorize the Transportation Equity Act for the 21st Century (TEA-21). However, lawmakers abandoned that approach following yesterday's meeting.

It is unclear whether GOP Senators will be able to overcome the objections of Senate Democrats and proceed to conference. Senate Minority Leader Tom Daschle (D-South Dakota) is expected to continue blocking attempts to go to conference until he has a guarantee that the Senate number will be preserved and that Democrats will be included in the conference. Daschle is continuing to push for a "preconference" of the bill, fearing that without Democrats' involvement, GOP leaders will bow to pressure from President Bush and agree on a smaller funding total than was passed by either chamber. Daschle agreed last week to a cloture vote this week on the motion to proceed to conference, although Frist has not yet set aside time for the vote.

The cloture vote, which needs 60 votes to pass, will be held on the motion to conference the House transportation bill, the first step in a multistage process of naming conferees. Typically, lawmakers move towards conference by passing these motions by unanimous consent, but Senate Democrats have refused to comply.

It has been reported that the White House did not want to entertain suggestions of a five-year bill, which should quash speculation that with fiscal year 2004 half done, the administration might support a $256 billion bill over five years.

Tuesday the Senate adopted an amendment from Tom Harkin (D-Iowa) which would block the Labor Department from adopting new rules governing the payment of overtime. The vote of 52-47 garnered the support of 5 GOP members, and was similar to a vote late last year which also sought to overturn the then-prospective rules during the debate over the Labor-HHS appropriations bill. After President Bush threatened to veto the bill, the Harkin amendment was abandoned in conference.

After criticism of the rule changes increased, Labor Secretary Elaine Chao changed the regulations, issuing new ones in April that would protect more workers (including police officers and firefighters) than the original version. Democrats claimed the revised rules did no go far enough, as the measure still strips eligibility from several occupations including IT workers and journalists.