106th Congress: Key Issues and Early Agenda V

CONTENTS FOR THIS SECTION

Health

Public Health

Health Program Reauthorizations
Medical Records Privacy

Tobacco

Science and Technology

Research and Development Budget Pressures
Space Programs

Telecommunications and Computers

Telecommunications

Internet Issues

Trade and International Finance

Fast-Track Negotiating Authority
Preferential Tariff Measures
Global Financial Crisis; Reform of the International Financial Structure

Transportation

Federal Aviation Administration (FAA) Reauthorization

Airport Improvement Program (AIP)
Budget Treatment of the Airport and Airway Trust Fund

Health

Public Health

Health Program Reauthorizations. The 106^th Congress may consider legislation to reauthorize certain programs of the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and the Agency for Health Care Policy and Research (AHCPR). While NIH and CDC do not require comprehensive reauthorization, authority for a number of individual programs had expired by the end of FY1998. Some were extended in health bills passed at the end of the 105^th Congress, but others were not addressed or did not see final action. Potential NIH-related issues include clinical research, research facilities, alternative medicine, NIH administrative structure, establishing a trust fund for biomedical research, and research on women's health, bioengineering, genome sequencing, and prostate cancer. An ongoing issue is how NIH sets its research priorities and how it will manage large increases in its appropriations (see Research and Development Budget Pressures,). Expired CDC program authorities include the preventive health and health services block grant, and prevention programs with respect to injuries, prostate cancer, sexually transmitted diseases, and infertility. AHCPR's authorization expired in 1995. Legislation was introduced in the 105^th Congress to extend and revise the authority and mission of AHCPR. It would have renamed AHCPR as the Agency for Healthcare Quality and expanded the agency's responsibilities in the area of health care quality research. Similar legislation may be considered by the 106^th Congress.

Medical Records Privacy. The ability to ensure privacy of health records increasingly is at risk due to several trends. These include the growing use of information technologies in health care, structural changes in the health care delivery and payment systems, and information gathered from genetic testing. Such factors underscore the fact that existing legal safeguards to protect patient confidentiality are limited. In particular, concerns are raised about the increasing number of parties who have routine access to personally identifiable health records in institutions involved in health care treatment, payment, oversight and health research. The passage of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) placed deadline pressure on Congress to consider medical records privacy legislation. Congress now has until August 1999 to enact a privacy law or else the Act requires the Department of Health and Human Services (HHS) to promulgate regulations on privacy protection within the following 6 months. Six comprehensive bills on medical records privacy were introduced in the 105^th Congress, but none passed.

Tobacco

The announcement on June 20, 1997, of a proposed $368.5 billion settlement between state attorneys general and the tobacco industry sparked a year of intense congressional debate on federal tobacco policy. Under the terms of the agreement, the industry would reimburse states for their tobacco-related medical costs, pay for tobacco-control programs, agree to substantial restrictions on tobacco-product advertising, and submit to regulation by the Food and Drug Administration (FDA), in return for immunity from civil lawsuits. Attempts by the 105^th Congress to pass comprehensive tobacco legislation to implement the proposed agreement ended when the McCain bill (S. 1415) died in the Senate on June 17, 1998.

Subsequently, the states and industry resumed negotiations. On November 23, attorneys general from 46 states signed a $206 billion settlement with the major tobacco companies. The deal follows earlier individual settlements with four states (Mississippi, Florida, Texas, and Minnesota) totaling almost $41 billion. The new multistate settlement is a scaled-down version of the 1997 proposed agreement that does not require federal action for implementation. It lacks many of the tobacco-control provisions that were included in the McCain bill. The new agreement has reignited a number of controversial tobacco issues that are likely to be the subject of congressional oversight and legislation in the 106^th Congress.

Chief among these is the issue of federal Medicaid reimbursement. Recovery of smoking-related Medicaid costs was a major component of the states' lawsuits against the tobacco companies. Under federal law, states must reimburse the federal government for its share of any Medicaid expenditures that states recover from liable third parties. State governors and attorneys general are strongly opposed to any federal efforts to recover tobacco settlement funds from state lawsuits. President Clinton has indicated that he would consider legislation to allow states to keep all the funds, provided they are spent on anti-tobacco and other public health programs.

The potential public health impact of the new multistate agreement is also likely to be of concern to Congress. Experts believe that the settlement's limited public health provisions are unlikely, by themselves, to have much impact on reducing underage tobacco use. But if states commit a substantial portion of the annual payments to comprehensive tobacco control programs, and if those efforts are tied to a national strategy, the agreement could lead to significant reductions in tobacco use. State legislators across the country are already at odds, and under increasing pressure from lobbyists, over how to spend the money.

The settlement does not incorporate FDA's 1996 tobacco regulation. Last month, the Fourth U.S. Circuit Court of Appeals ruled that the agency does not have statutory authority to regulate tobacco products. The Administration has appealed the decision to the U.S. Supreme Court. Federal anti-tobacco lawmakers may revive legislative efforts to grant FDA authority to regulate tobacco products. Legislation to cap attorneys' fees may also be reintroduced in light of the $8.2 billion awarded by an arbitration panel to the private lawyers hired by Florida, Mississippi, and Texas.

President Clinton is considering another increase in federal excise tax (currently 24 cents a pack) to fund anti-tobacco and other public health programs. The settlement, however, allows for a dollar-for-dollar reduction in industry payments to the states if the federal government raises tobacco taxes.

Science and Technology

Research and Development Budget Pressures

Congress approved a 4% increase for federal research and development (R&D) spending in FY1999 above the President's request. Congress provided the additional funds in part by approving an emergency supplemental appropriations bill that raised discretionary spending caps by over $20 billion (P.L. 105-277). While this increase reflects continuing congressional support for strong R&D capabilities (R&D accounts for a little more than 14% of discretionary spending), existing law which limits the growth of discretionary spending will constrain future R&D funding. The Office of Management and Budget estimates that FY1999 discretionary spending exceeds the FY2000 discretionary spending cap by about $21 billion.

The National Institutes of Health (NIH), with slightly less than a $2 billion increase in funding ($15.6 billion), accounted for 75% of the growth in civilian R&D in FY1999. Many in the scientific community and Congress have called for funding increases in civilian R&D across a broad spectrum of scientific disciplines, rather than concentrating funding increases in one particular area of science. In an effort to foster this objective, in 1998, the Senate passed the Federal Research Investment Act (S. 2217) which called for doubling funding in 14 civilian R&D agencies (including NIH) over the next 12 years. This bill, if enacted, would have likely slowed the growth of health related research, which has grown from 25% to over 40% of total civilian R&D funding since FY1980. This legislation may be reintroduced in the 106^th Congress.

Space Programs

NASA's space station program continues to generate controversy, even following the successful launches of its first two segments at the end of 1998. Concerns about Russia's ability to fulfill its commitments and about NASA's own cost overruns are the focus of the debate. Congress has defeated 19 attempts to terminate the space station program since 1991, but criticism of the program continues. Key questions for the 106^th Congress will be how to accommodate the program's substantial cost increases without harming other NASA programs and whether to transfer additional funding to Russia. Separately, congressional interest in the U.S. commercial space launch services industry has been sparked by allegations that certain U.S. satellite manufacturing companies may have improperly transferred missile-related information to China in the course of launching U.S.-built satellites on Chinese launch vehicles. The multifaceted concerns raised by those allegations involve export control, national security, and political donation issues. Also at issue is how to make the U.S. launch services industry more competitive with countries like China, so that customers will use U.S. services instead. House and Senate committees are expected to continue their investigations of the allegations and monitor Clinton Administration compliance with congressional direction in the FY1999 DOD authorization bill (P.L. 105-261) to return control of satellite export decisions to the State Department. Legislative efforts to further the competitiveness of the U.S. commercial launch services industry are likely.

Telecommnications and Computers

Telecommunications

Telecommunications issues received significant attention, but remained unresolved, at the close of the 105^th Congress. Increasing interest in the rapidly growing telecommunications sector and its impact on the U.S. economy and its citizens will continue to make these likely high profile issues in the 106^th Congress.

Internet Issues

Despite a general reluctance to regulate the Internet, Congress has been drawn into such regulation in response to concerns about a variety of issues. Chief among them is how to prevent children's access to unsuitable material on the Internet, particularly pornography. Congress' first attempt to deal with the issue (the 1996 Communications Decency Act or "CDA") was overturned by the Supreme Court in 1997. In 1998, Congress passed the Child Online Protection Act (P.L. 105-277, Title XIV of Division C) which its sponsors hope will survive legal scrutiny. The new law differs from the CDA in two main respects: (1) it prohibits communication to minors only of material that is "harmful to minors," rather than all material that is indecent, and (2) it applies only to communications for commercial purposes on publicly accessible Web sites. A temporary restraining order preventing enforcement of the act was issued in November by a federal judge; trial is expected early in 1999.

Protecting privacy on the Internet has been another area of congressional interest. Congress passed legislation protecting children's privacy in 1998 (Title XII of Division C of P.L. 105-277), but the issue of privacy for adults remains. Congress and the Administration both prefer industry self-regulation in this area, but frustration at industry's slow pace has led to warnings that legislation may be proposed in 1999.

Also unresolved was the question of whether Congress should limit unsolicited commercial e-mail ("junk e-mail" or "spam"). Debate over whether spam is a legitimate marketing technique and protected by the First Amendment, whether senders of such e-mail should be required to identify it as advertising and provide consumers with an "opt-out" option, or whether such e-mail should only be permitted if an established business relationship exists with the recipient, is expected to resume early in the 106^th Congress. Related issues that may arise include encryption and computer security, particularly with regard to critical infrastructure protection.

Trade and International Finance

Fast-Track Negotiating Authority

"Fast-track" denotes the authority delegated by the Congress to the President to negotiate trade agreements that would be treated on a fast-track basis, i.e., limited debate and no amendments, in the Congress. The last such grant of authority expired in 1994. Legislation to renew fast-track authority (H.R. 2621) was defeated by the House in September 1998. An omnibus trade bill containing fast-track authority was reported favorably out of the Senate Finance Committee in July 1998 but did not go to the floor for consideration. The White House and Republican leaders in the Congress have indicated their desire to bring the issue up for consideration early in the first session of the 106^th Congress. Debate over fast track usually generates debate on overall U.S. trade policy: impact of previous agreements, such as NAFTA, on required upcoming negotiations in the World Trade Organization (WTO), and on other areas of trade policy. It also involves debate over how broad should the scope of U.S. trade policy be: Should it cover labor rights and concerns about environment? Should the United States form a free trade area with Latin America? What about the Multilateral Agreement on Investment (MAI)?

Preferential Tariff Measures

Generalized System of Preferences (GSP ) is a program that provides tariff preferences to certain imports from eligible developing countries. It was reauthorized during the 105^th Congress (P.L. 105-277, Title I, section 1011) but only through June 30, 1999 and therefore will likely be considered again during the first session of the 106^th. Caribbean Basin Interim Trade Program (CBI/NAFTA Parity) refers to legislation to provide certain Caribbean Basin countries with tariff preferences on a par with those Mexico receives under NAFTA. Several bills were introduced to provide CBI/NAFTA parity but none passed the 105^th Congress. Some Members and the White House have indicated that authorization may be attached to legislation to provide assistance to Caribbean victims of Hurricane Mitch.

Global Financial Crisis; Reform of the International Financial Structure

The financial crisis, which began in East Asia in 1997, spread to Russia and parts of Latin America by the summer of 1998. The crisis has been blamed on a number of factors, primarily the dependence of the affected economies on short-term debt that made them highly vulnerable to the vagaries of world capital markets and on ineffective, if not destructive, government economic policies. The crisis led to a sharp increase in the U.S. trade deficit in 1998, as U.S. exports plummeted in the wake of major a contraction in demand in Japan and East Asia. The financial crisis occurred as the 105^th Congress debated legislation to authorize additional U.S. contributions to the International Monetary Fund (IMF) of $18 billion. During the debate questions were raised about the IMF's policies in lending to stricken countries and associated U.S. policies to support them. Some critics considered conditions attached to such lending to be unreasonably stringent, while others considered them to be too lenient and to undermine discipline in financial markets. The adequacy of the international financial system to deal with future financial crises in a world of massive unrestricted capital flows also was called into question. These issues are likely to be the subject of congressional concern and hearings in the 106^th Congress.

Transportation

Federal Aviation Administration (FAA) Reauthorization

FAA reauthorization legislation was passed in both the House and the Senate during the 105^th Congress. Strong disagreement on airline competition issues and the length of the reauthorization period prevented final action on the measure. Instead, Congress provided for a six-month extension of existing programs which expires on March 31, 1999.

Airport Improvement Program (AIP). The AIP provides federal assistance for airport capital improvement projects. AIP issues include funding levels, system capital needs, funding distribution and noise mitigation, among others. Also at issue, is the possibility of raising or eliminating the cap on the passenger facility charge (PFC). The PFC is a federally regulated local tax on each airline passenger using an airport. The PFC is generally seen as either a complement to, or a replacement for, AIP spending.

Budget Treatment of the Airport and Airway Trust Fund. The trust fund typically maintains a sizable unexpended balance. This has led to constant calls to allow additional spending from this balance by moving the trust fund "off budget". This debate has been heightened by the establishment of budgetary "firewalls" for the highway trust fund as part of reauthorization of highway and transit programs during the 105^th Congress. Advocates of a change in trust fund budgetary treatment argue that in addition to providing for more spending, the change would insure that trust fund balances were actually used for aviation purposes. Opponents of this approach believe that it is counter to the notion of a unified federal budget and a distortion of the congressional budget process.

Airline Competition. Deregulation of the airline industry 20 years ago is generally viewed as having had positive overall results. Deregulation has produced some perceived inequities, however. Some localities and travelers believe they are paying higher fares for poorer or less adequate air service. FAA reauthorization legislation in the 105^th Congress tried to address these issues by providing for some changes in how service is provided and how access to certain airports is awarded. Several of the remedies considered in the last Congress are expected to be reexamined and additional remedies may be considered.

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