Government affairs

Following weeks of negotiations—including a couple of short-term spending measures—both the House and Senate have finally passed a $1.1 trillion omnibus spending measure, H.R. 2029, that funds the government through Sept. 30, 2016. It now awaits the President Obama’s signature.

The spending package includes spending for all 12 agencies including:

• $141.3 billion for Agriculture
• $66 billion for Commerce-Justice-Science
• $572.7 billion for Defense (including $58.6 billion for Overseas Contingency Operations (OCO) funds)
• $37.2 billion for Energy-Water
• $44.6 billion for Financial Services
• $41 billion for Homeland Security
• $32.2 billion for Interior-Environment
• $884.1 billion for Labor-HHS-Education
• $4.4 billion for Legislative
• $173.3 billion Military Construction-Veterans Affairs
• $52.8 billion for State-Foreign Operations
• $114 billion for Transportation-HUD

With regard to the U.S. Postal Service, lawmakers once again preserved NALC’s long-standing six-day mail delivery language, mandating that such delivery frequency continue at not less than 1983 levels. With more than 227 members of Congress expressing their support for six-day through H.Res.12, attacks on six-day were not as prevalent as they were during the 113th Congress.

The preservation of the language not only presents a major victory for letter carriers, who have lobbied tirelessly on the importance of six-day, but it also signals a shift in tone on Capitol Hill during the 114th Congress.

“NALC encourages members to take advantage of this positive momentum and continue to educate their congressional representatives on other vital services such as maintaining door delivery and preservation of service standards,” NALC President Fredric Rolando said. “This positive momentum will allow us to work toward postal legislation that recognizes these and other important services on which the public depends.”

In addition, the omnibus spending measure allocated $55 million to continue overseas voting and mail for the blind. Language was also included that prevents the closure and consolidations of rural post offices.

With regard to the excise tax on high-cost health insurance plans, the omnibus included a two-year delay in implementation of the so-called “Cadillac tax” until 2020. In effect, tax thresholds and the qualified retiree/high-risk profession adjustment amounts for 2020 will be determined as if the two-year delay had not occurred, meaning that current-law (expected to be $10,200 for self-only and $27,500 for other-than-self-only coverage) and qualified retiree/high-risk profession adjustments ($1,650 for self-only and $3,450 for other-than-self-only coverage) will be increased using the current-law adjustment percentages (generally, CPI + 1% for 2019 and CPI for 2020). For example, if CPI is 2.4% (as CBO projects) for each of these years, then the starting threshold for self-only coverage in 2020 would be $10,800.

With regard to deductibles, any excise tax paid by an insurer or other coverage provider will be a deductible expense. This is a permanent change in the law, reversing the current statutory language that explicitly provides that the excise tax is not deductible. 

The omnibus package also included language directing the Government Accountability Office (GAO) to produce an age-and-gender adjustment study on the “suitability…of the premium cost of the Blue Cross/Blue Shield standard benefit option under the [FEHBP] as a benchmark for the age and gender adjustment,” and its recommendations for “any more suitable benchmarks,” within 18 months of the date of enactment. 

H.R. 2029 also included some other high-profile inclusions, such as an end to the ban on oil exports, reauthorization of the 9/11 responders health and compensation programs, reauthorization of intelligence programs, establishment of a voluntary cybersecurity information-sharing process between the government and private sector, and it extends but phases out wind- and solar-energy tax credits.

As a part of omnibus package consideration, Congress also voted on a $680 billion tax extenders package, which retroactively renews 2015 tax-year provisions. Over a dozen of the extenders were made permanent, while others were extended for a period of two years for 2015 and 2016. Among the permanent extenders are the research and development tax credit; capital expensing for businesses; and expanded versions of the child tax credit, Earned Income Tax Credit and American Opportunity Tax Credit for college expenses. The extenders package also includes a two-year moratorium on the medical device tax created by the 2010 health care overhaul. Further, it modifies a number of IRS policies and procedures with regard to taxpayer rights and the process for groups to obtain tax-exempt status.

The Joint Committee on Taxation (JCT) estimates that the measure’s provisions would reduce net revenues, and thereby increase deficits, by a total of $622 billion over 10 years, with the permanent provisions costing $560 billion.