Issues / Legislation » Legislative Weekly Reports

Week Ending May 13, 2016

Latest Legal Challenge to Affordable Care Act (ACA) Would Not Bring Down the Law

On Thursday, a federal district judge ruled that certain federal subsidies that help lower deductibles, co-payments and other out-of-pocket costs for low-income individuals and families under the ACA, were improperly funded by the Obama administration.  The case does not concern the larger tax credits provided to those who obtain coverage through the ACA health exchanges, but rather additional subsidies received by households with incomes that are less than 250% of the federal poverty level.  The judge delayed implementation of the decision pending an appeal by the administration.

Under the ACA, low-income households are legally entitled to these cost-sharing reductions.  Insurers provide the additional assistance and are reimbursed by the federal government.  At issue is whether the Congress must appropriate the reimbursements to insurers each year.  If this decision were to be validated upon appeal, low-income households would still retain the right to these subsidies.  In addition, insurers would have the right to pursue reimbursement under a law enacted by Congress long ago, providing an open-ended, permanent appropriation to pay valid claims against the government.   

Temporary Assistance for Needy Families Bills Passed

On Wednesday, the House Ways and Means Committee passed four bills by voice vote in anticipation of the need to continue funding for the Temporary Assistance for Needy Families (TANF) block grant beyond September 30. Overall, these GOP bills reflect a missed opportunity to pass legislation that would truly help struggling families escape poverty. As Ranking Member Sandy Levin (D-MI) noted in his opening statement, the House GOP leadership continues to fail to support legislation that would expand affordable housing, increase the federal minimum wage, provide paid family and medical leave, make college affordable, improve early childhood education, or expand the Earned Income Tax Credit to childless workers. Instead, it promotes cutting or eliminating the Social Services Block Grant, turning the Medicaid program into a block grant, and repealing the Affordable Care Act.

The “Social Impact Partnerships to Pay for Results Act” (H.R. 5170), co-sponsored by Reps. Todd Young (R-IN) and John Delaney (D-MD), would divert $100 million from TANF’s contingency fund to risky and untested public-private partnerships, allowing state and local governments to enter into contracts for social services with investment companies like Goldman Sachs. While the bill purports to refuse payments to investors if their projects are unsuccessful, Rep. Lloyd Doggett (D-TX) raised a number of concerns about how success can and will be determined. He noted that the bill fails to limit investors’ rate of return or provide a floor on what can be considered success. Rep. Doggett also noted that this bill does not require that these funds be used to help children. His amendment that would have required that at least 50% of the $100 million be spent on services that directly benefit children was defeated on a party-line vote.

The “Accelerating Individuals Into the Workforce Act” (H.R. 2990), sponsored by Rep. Robert Dold (R-IL), would divert $100 million from TANF’s contingency fund to fund a subsidized employment demonstration project for TANF recipients. Participating employers would receive a government subsidy for up to 50% of the wages paid for up to 12 months. The original bill failed to include provisions protecting unsubsidized employees from being displaced by subsidized employees. At AFSCME’s urging, Rep. Doggett introduced an amendment to include these protections, which passed on a bipartisan vote. Rep. Joe Crowley (D-NY) introduced an amendment that would have recognized the need for affordable, quality child care and other supports for TANF parents to participate in subsidized employment, but it failed on a party-line vote.

The “TANF Accountability and Integrity Improvement Act” (H.R. 2959), sponsored by Rep. Kristi Noem (R-SD), would limit states’ ability to “count” nonprofits’ spending – in addition to state and local government spending – towards meeting state spending requirements. And, the “Reducing Poverty through Employment Act” (H.R. 2966), sponsored by Reps. Jason Smith (R-MO) and Noem, adds poverty reduction through employment as a new TANF purpose. As Rep. Crowley noted, this bill is “not even a band aid on an open, gaping wound,” without additional investments in child care and other supports.

Chairman Kevin Brady (R-TX) expects to bring these bills to the House floor this summer

Clinton Proposes Plan to Boost Wages for Child Care Providers and to Ensure Affordable, High Quality Care

Former Secretary of State and presidential candidate Hillary Clinton put forward a plan to significantly increase federal investments in child care and early learning as part of her “Breaking Down Barriers” tour that is focused on supporting working families.  The plan would ensure that no family pays more than 10% of its income for child care and that child care providers be paid commensurate rates to kindergarten teachers. The plan also would double the number of children served by Early Head Start and the Early Head Start-Child Care Partnership; expand home visiting services by social workers and nurses to more than two million parents during pregnancy and early childhood; ensure universal pre-K for all 4-year-olds; and provide 12 weeks of paid family leave to care for a new child. Details are available at https://www.hillaryclinton.com/issues/early-childhood-education/.

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