November 14, 2022
OVERVIEW
The red wave never materialized on November 8. It looks like the House will be controlled by Republicans, but by the slimmest majority. The Senate will stay in Democratic control. While vote counting continues due to so many mail-in ballots in the West, Congress is back in session this week. They need to complete the appropriations process (likely in an omnibus package that will have lots of legislative measures tacked on) and the National Defense Authorization Act, among other issues. The 118th Congress will be sworn in on January 3, 2023 and the G2G team is planning to attend many of the swearing in events in Washington. See details on election results and what it means for 2023 below.
ELECTIONS
THE WAVE THAT WAS A RIPPLE:
With the votes counted and Senator Cortez Masto (D-NV) declared the winner (although a recount is underway), Democrats have retained the Senate for the next two years. Overall, except for just one Democratic pickup in Pennsylvania with John Fetterman’s defeat of Mehmet Oz and the pending runoff in Georgia between incumbent Senator Raphael Warnock (D) against Herschel Walker (R), the political parties each held their current seats.
Meanwhile, in the House, which party will control the chamber in 2023 is still up in the air as there are 19 seats that have yet to be called. Republicans have won 212 seats (17 pickups) to Democrats’ 204 (5 pickups). The biggest surprise of the weekend was Marie Gluesenkamp Perez’s (D) defeat of Joe Kent (R) in Washington-03, which is currently held by Rep. Jaime Herrera Beutler (R), who lost her primary to Kent, a Trump-endorsed candidate. So far, it is the only race in The Cook Political Report’s “lean” or “likely” columns to go the other way. The pundits estimate 217 for Republicans and 213 for Democrats, with five true toss-ups still up in the air as counting continues: Arizona-01, Arizona-06, California-13, California-22, and California-41. Democrats could still retain the House, but only if they sweep all five.
CHAMBER CONTROL TO DETERMINE LEGISLATION, FUNDING, JUDICIAL APPOINTMENTS:
HOUSE OF REPRESENTATIVES:
How does party leadership of the House impact you? If GOP control the House, which does look more likely, they would have a razor thin majority that includes division among Trump-backed Republicans and traditional Republicans loyal to the congressional process and deal-making as well as a some moderates. If Democrats can get just a few to vote with them, this could lead to gridlock and/or inability to move Republican-favored legislation off the House floor. Republicans would also likely block President Biden from delivering on a sweeping legislative agenda and work to cut spending over the next two years. House Republican leader Kevin McCarthy, who aims to become speaker, has said he plans to use the debt limit as leverage to extract spending cuts, just as his party did in 2011 under Speaker John Boehner. One area of agreement is Defense spending and Ukraine support. However, Republicans have clearly said they want more oversight of this spending. They also have stated plans to conduct numerous oversight hearings of the current Administration, loosen regulations, cut taxes, and possibly start impeachment proceedings. Given the tension, President Biden would like use executive actions more often, as he did in August when he announced a far-reaching student-debt relief plan and as previous President Obama did with the sweeping Deferred Action for Childhood Arrivals (DACA) program in June 2012.
On the other hand, if Democrats win the <218 seats needed to control the chamber, they would control the House and align with President Biden’s agenda, which ranges from more efforts addressing pandemic preparedness, Cures 2.0, health and bioeconomy funding, childcare tax credit, and climate change. However, there is a big question as to who would lead the Democrats in the House. Speaker Nancy Pelosi (D-CA) had stated she would not run for Speaker again after 2022, but she has demonstrated she can control the caucus. There are rumors of Majority Leader Steny Hoyer (MD-05) and House Democratic Caucus Chair Hakeem Jeffries (NY-08) battling out who steps up to the lead the Democrats, but other key leaders include Majority Whip James Clyburn (D-SC) and Assistant Speaker Katherine Clark (D-MA). Before January 3, 2023 when the 118th Congress is sworn in, the current Democratically-controlled House has the ability to raise the debt ceiling cap before the new Congress starts as long as they stay united. But unity is a challenge with many moderate Democrats frustrated with especially tough re-election battles this year and openly opposing Pelosi.
SENATE:
In the Senate, Democratic control of that chamber means Biden will avoid the challenge former President Obama faced trying to fill Supreme Court vacancies in his last term. At the time, Republicans blocked then Judge Merrick Garland’s (now Attorney General) nomination to the court through the end of Obama’s presidency. That move led to former President Trump filling that and two additional seats, shifting the Supreme Court to the right and opening the door for it to overturn Roe v. Wade in June with the Dobbs decision. If Warnock wins in the December runoff with Walker in Georgia, the Senate can move nominees otherwise stuck in committee. In the current 50-50 Senate, all committees in the chamber are split evenly. When there is a deadlocked vote on a nominee, the full Senate must vote to dislodge it and move toward a final approval. But with an added seat in the chamber, Democrats will get another slot on each panel, enabling Biden’s picks that have party-line support to move ahead.
Despite the added seat, the Democratic majority will still require bipartisanship to move much legislation. While Biden and Minority Leader Mitch McConnell (R-KY) have a track record of making deals dating back to Biden’s time in the Senate and as VP, including in 2012 when the two averted a “fiscal cliff” of tax hikes and budget cuts with a last-minute New Year’s Eve deal.
The two may need to team up again to avoid a debt limit crisis and a government shutdown, always a threat with year-end appropriations bills. Some areas where they seem able to work together include providing additional military support for Ukraine, countering China, boosting trade, and accelerating the permitting of energy projects. While overall NIH funding support is bipartisan, more COVID and pandemic spending is not supported across the board. Finally, the defense spending numbers are generally higher when Republicans lead the chamber.
HEALTH
COVID:
On Friday, the Department of Health and Human Services (HHS) signaled it will extend the COVID-19 public health emergency (PHE) beyond January 12, 2023. Many health care stakeholders recently urged the Administration to maintain the PHE and related policies through the winter to help address a potential COVID surge and to grant states more time prepare for the Medicaid redetermination process slated to re-start once the emergency ends. The move also provides the telehealth industry additional time to convince Congress to further extend, or make permanent, regulatory flexibilities that vastly expanded virtual care during the COVID-19 pandemic. In the past, HHS has extended the PHE in 90-day increments, so the PHE is now expected to be extended until mid-April. HHS most recently extended the PHE on October 13, which carries the emergency through January 12.
MENTAL HEALTH:
The Senate Finance Committee unveiled a draft bill to integrate mental health with primary care and physical health care and invest in mobile crisis services and surrounding community supports. It also would provide a two-year pay bump for Medicare behavioral health integration services and direct the Centers for Medicare and Medicaid (CMS) innovation center to consider behavioral health integration when developing new models.
The draft legislation would clarify that peer support specialists can provide behavioral health integration services to Medicare beneficiaries as a part of a broader care team and direct the administration to develop Medicare quality measures that show how much clinician practices are integrating behavioral health with primary care. It also would direct CMS to provide technical assistance to primary care providers interested in integrating mental health care services. CMS would have to issue guidance outlining flexibilities for partnering among states, Medicaid managed care organizations, and community-based organizations to address the social determinants of health and beginning in 2025, CMS would create a single global payment under the physician fee schedule to fund mobile crisis response team services, including screening and assessment, supporting de-escalation of patients’ mental health or substance use disorder crises and referring for health and social services. It would also require CMS to create bundled payments for crisis stabilization services for Medicare beneficiaries under the Outpatient Prospective Payment System to cover up to 23 hours of crisis stabilization services, including observation care, screening for suicide risk, screening for violence risk and assessment of immediate physical health needs. Lastly, it directs CMS to issue guidance to states on how to build a crisis care continuum financed by Medicaid or the Children’s Health Insurance Program as well as establish a technical assistance center to provide planning grants to states so they can implement those policies.
This is the fourth Senate Finance Committee discussion draft, just released on November 10, which is timed for potential inclusion in the year-end omnibus bill. Senators have also released discussion drafts on children’s mental health and telehealth, which were incorporated into the gun safety proposal passed in June.