A long-dormant fund worth more than half a billion dollars that is at the heart of Democratic opposition over how to pay for the nation’s anti-Zika virus efforts, even though using the fund was first recommended by the Obama administration.
Republican aides who worked on the initial deal in June confirmed to the Washington Examiner that it was the Department of Health and Human Services that steered Senate Republicans to a pot of $543 million that had been set aside for health insurance exchanges that were never established in the five U.S. territories.
The money “had just been sitting there,” a Republican aide close to the original negotiations told the Examiner. “Our understanding was this was not going to be a terribly controversial offset.”
But the House-Senate measure to provide $1.1 billion to help stop the spread of Zika has been stalled in Congress since July and is likely to go nowhere when the Senate holds another vote on the measure Sept. 6.
Senate Democrats are blocking the legislation in part because they, along with their House Democratic counterparts, unanimously oppose the GOP plan to pay for most of the bill, $750 million of it, by using funds from elsewhere in the federal budget.
“Democrats are not going to support setting a precedent where emergency spending has to get offset,” Matthew Dennis, a spokesman for the House Appropriations Committee ranking member Nita Lowey, D-N.Y., told the Examiner. “It would build a very dangerous precedent from the perspective of good government. The reason we have the power to do emergency spending outside budget caps is that it allows us to move more quickly, without having to haggle over offsets for everything.”
The non-partisan Congressional Research Service reported that most recent cases of emergency spending approved by Congress have not been offset with cuts elsewhere in the budget, but those emergencies have mainly involved hurricanes, floods and other weather disasters. Republicans say they are trying to balance the need for emergency spending for Zika, a mosquito-transmitted virus that causes grave birth defects, and fiscal responsibility in the face of a growing national debt and ballooning government spending.
In addition to the $543 million offset, the GOP hoped to pay for the Zika fight by redirecting $107 million from leftover funding from the 2014 Ebola outbreak and another $100 million in unused administrative funding within HHS. “We are just trying to find a way to pay the bills,” a GOP Appropriations Committee aide told the Examiner.
The $543 million was designated six years ago for the five U.S. territories to establish health insurance marketplace exchanges under Obamacare. Those exchanges were never created and in all likelihood will probably never be built because of the rules for healthcare coverage in the territories.
For example, Obamacare does not require territory residents to buy health insurance. In 2014, the Obama administration moved even further to exempt the five territories from health insurance coverage requirements, making it even more unlikely the exchanges will be created unless the healthcare law is rewritten.
As a result, the money for U.S. territory exchanges is now sitting unused.
In June, Republicans believed the fund would provide a good compromise for Democrats concerned about raiding other parts of the budget to pay for the Zika control bill and proposed its use to offset the cost of the legislation. Republicans believed HHS alerted them to the fund as compromise after a months-long standoff between Congress and President Obama, who sent Congress a $1.9 billion Zika funding request in February.
“It was like finding a pot of money,” one GOP aide told the Examiner.
Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank, called the money “the perfect pay-for” that even Democrats should support.
“It’s a completely unnecessary appropriation that could just be reallocated to a more highly valued use,” Cannon told the Examiner. “If you are not willing to cut this spending, you are not willing to cut any spending.”
Republican say they believed, given the nod from Obama’s own HHS, that Democrats were going to agree to the $1.1 billion deal. Republicans said they were surprised when, seemingly at the last minute, Democrats withdrew their support.
“We thought everything was going really well,” one GOP told the Examiner. “Then we got word Democrats said they weren’t’ going to support it.”
It’s not clear how or when Democrats dropped their support, or whether they were aware HHS initially alerted the GOP the unused $543 million. Health and Human Services representatives have not yet responded to a request for a comment from the Examiner, and a White House spokesman also said he had no comment.
Democrats say they oppose the bill’s offsets but contend they were led to vote against the measure because of several offending provisions in the bill, including the offsets. Lawmakers say they mainly oppose a provision that would prevent Zika funding from being used at seven health clinics in Puerto Rico that are affiliated with Planned Parenthood.
Democrats oppose language in the bill that would temporarily alter the law so that mosquito spraying could take place near water, which is prohibited under the Clean Water Act. And, they object to a move by Republicans that struck language to ban Confederate flags from display in U.S. military cemeteries.
Senate Republicans believe Democrats are mostly hung up on the offsets, but Democrats deny it.
“I don’t know if I would characterize one as more important or less important than the others,” Dennis said, suggesting the more important issue for Democrats is the funding for the Puerto Rican health clinics which provide contraceptive services to rural areas on the island.
“That’s a big deal,” Dennis said. “The way the language is written right now, it restricts contraceptive money from the only providers who are in the best place to provide the services.”
In a conference call with reporters on Sept. 1, Minority Leader Harry Reid, D-Nev., didn’t even mention the offsets as a reason for his opposition to the bill but complained of Republican inaction as the Zika virus has spread in South Florida.
“Everyone can read the press,” Reid told reporters on the call. “It’s a desperate situation. We did nothing on Zika except a Republican version to get rid of Planned Parenthood and fly the Confederate flag again and a few other little goodies.”
House Speaker Paul Ryan, R-Wis., accused Democrats of “shameless political posturing,” in their opposition to the Zika funding bill. “Democrats in the administration and Congress have shown over and over again that they’d rather mischaracterize history to demonize Republicans instead of swiftly address a public health crisis,” Ryan said in August. “That’s a new low.”
