Politics, Policy & Power | Pros & Cons For The American Rescue Plan Act

03/15/21 10:34AM EDT

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Politics, Policy & Power | Pros & Cons For The American Rescue Plan Act - 3 15 2021 10 37 40 AM

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Politics

It is true. Relative to other crisis-related legislation over the last year, the American Rescue Plan Act is a little light on health and COVID-19 related provisions.

Arguably, as pandemic down shifts to endemic, the threat of COVID-19 is being reduced to the policy fig leaf necessary to accomplish certain goals.

While it has become remarkably easier for political forces here and abroad to scare the bejeebus out of Americans through customized channels like social media and pick-your-news cable, exploiting crisis is nothing new in American politics. Nor does it necessarily produce poor results.

With disease abating and governors around the country under political pressure of one sort or another to relax restrictions, the drive for a Universal Basic Income advocated by the left wing of the Democratic Party was replaced by an increase of the child tax credit from $1,000 to $3,000 and making it advanceable (i.e. paid monthly to the taxpayer) for tax year 2021. Advocates have already begun work to extend the policy and perhaps make it permanent.

While there is little research on the implications of an advance child tax credit on fertility, it is probably safe to conclude it cannot hurt. With the U.S. and the rest of the world facing a fertility crisis unseen in generations, it might just help.

Another worthy mention in the American Rescue Plan Act is funding of a public health workforce, and most important, data and informatics infrastructure. President George W. Bush, when he rolled out pandemic response in 2005, made state and local surveillance a priority.

Unfortunately, somewhere along the line, public health spending was replaced with Medicaid expenditures and failed, except in a few areas like Zika-fighting Florida, to increase commensurate with biological threats.

State and local health departments have generally been funded by pass-through grants from states and the federal government, leaving mayors and city councils out of the budgetary loop and able to ignore status quo funding levels despite their ballooning sales and property tax collections.

The absence of solid data collection and surveillance akin to what New York City built a dozen years ago left many relying on private sector data collection and dissemination with varying methods, agendas and documentation.

While there is a lot to dislike about the American Rescue Plan Act, the federal government reasserting its role in public health makes for some good policy and perhaps better management of the next crisis. At the state and local level, with a few notable exceptions, there is nowhere to go but up.

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Policy

Aside from the technology and delivery of health care, the most durable change to the U.S. economy is going to be a renewed commitment to working conditions and a related increase in workers’ influence.

Disease spread in the food processing industry, for example, demonstrated the vulnerability of the supply chain. Standards in nursing homes contributed significantly to mortality.

Tomorrow, OSHA is expected to release “emergency temporary standards on COVID-19, including with respect to masks in the workplace are necessary, and if such standards are determined to be necessary issue them by March 15, 2021.”

Given that wording, the rules are almost guaranteed to require masks for some industries, putting the Biden administration on a collision course with several governors and local governments that either never required face coverings or lifted mandates recently. Other requirements could be enhanced PPE like N95 masks, overhauled ventilation systems and regular testing.

Continuing a theme that has persisted in the early days of the Biden administration, industry lobbyists are raising concerns that the new rules will come too late and just as they are preparing to re-staff and rebuild in response to state and local changes to restrictions.

As the American Rescue Plan Act makes clear, COVID-19 is now less about fighting a virus – American scientific ingenuity has the last word on that point – than implementing administration policies. Worker safety is and will be a priority for the Biden administration regardless of how much disease is in the air.

Power

Left behind in the jet fumes of the American Rescue Plan Act is the small matter of PAYGO. (PAYGO, for those of you who like to avoid long reads on federal budget procedure, is the statutory requirement that tax cuts and mandatory spending be offset by tax increases or cuts in mandatory spending. Discretionary spending is exempt because it is subject to an appropriations process.)

Under statutory PAYGO, the American Rescue Plan Act triggers about $381 billion in cuts annually for the next five fiscal years via what is known as “sequester.” Because the law limits reductions in Medicare to 4% or about $36 billion in FY 2022 and exempts other large mandatory accounts like Social Security and low-income programs, the practical effect is $80-$90 billion in spending reductions. The sequester is not triggered until 15 days after the end of the session which should occur in early January 2022.

The House plans to consider legislation next week to waive the PAYGO requirements. (HR 1868) which will certainly be accomplished on the south side of the hill. The Senate is a more uncertain matter. The bill also extends the sequester relief currently in place from March 31 until December 31, 2021.

The most likely path for avoiding sequestration is tucking the PAYGO waiver into some must-pass legislation at the end of this year. No one seems convinced Congress will let the cuts to Medicare proceed but cooperation is at a low ebb between the parties and it is hard to see where the compromise may be at this point.

The impasse, for now anyway, means the sequester relief that has been a tailwind for Medicare-centric providers like AMED, LHCG and EHC, not to mention the MA plans like HUM is not likely to persist past March 31.

While we tend to be biased toward inaction, the pending PAYGO showdown increases the potential for some long-sought Medicare reforms to come off the shelf like post-acute reform, changes to MA plan payments, drug price policy, among other things.

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