ACA 2014 and Employers: Reading the Tea Leaves—Part III

Retail giant Target this week announced that it would discontinue health insurance coverage for part-time workers, beginning April 1, 2014. Target joins other big-name employers like Home Depot and Trader Joe’s in making the change.

Significantly, Target EVP of Human Resources Jodee Kozlak cited the availability of Affordable Care Act health insurance exchanges as a reason for dropping coverage.

“Health care reform is transforming the benefits landscape,” said Ms. Kozlak, and “the launch of Health Insurance Marketplaces provides new options for health care coverage,” including “newly available subsidies” for many enrollees.

Is Target’s decision a harbinger of what employers will consider in 2014 and beyond? The tea leaves tell us, yes.

Mark Bertolini, CEO of health insurance company Aetna, must also be reading the tea leaves. In a January speech in San Francisco Mr. Bertolini predicted that by 2020 enrollment in public and private health insurance exchanges could reach 75 million, as more employers evolve health benefits toward defined contribution-type models.

To be sure, employers will proceed cautiously to change health benefits, and costs will remain a principal decision-driver. But the changes at Target and elsewhere demonstrate that the Affordable Care Act, with all of its cost and compliance uncertainty, compels employers to think creatively about health benefits. In 2014 many employers will take a serious look at what Ms. Kozlak calls the “new options available,” including health insurance exchanges.

With some 5 million U.S. employers, from mom-and-pop stores to global titans, employer creativity about changes in health benefits will express itself in an infinite number of ways. Many employers will gravitate toward consumer-directed, high-deductible, HSA-based health plans. Self-funding will become a more popular insurance option. Some employers no doubt will manage worker hours to stay below the new 30-hour weekly “full-time” threshold. And many will refer some or all of their workers to public or private health insurance exchanges, as Aetna predicts.

But Target’s announcement reminds us that in 2014 and beyond every employer-sponsored health benefits plan will have one constant: Change.

*Graphic source: Aetna presentation at 32nd Annual JP Morgan Healthcare Conference Jan. 15, 2014

2014 Affordable Care Act Legislation? Reading the Tea Leaves II

In his annual State of American Business address last week, US Chamber of Commerce CEO Tom Donahue appeared to tone down previous positions favoring total repeal of the Affordable Care Act.  Employee Benefit Adviser magazine reports that Mr. Donahue said “…the Chamber has been working pragmatically to fix those parts of Obamacare that can be fixed,” including the employer mandate to offer health coverage.

But realistically, what are the chances that Congress and President Obama will agree to legislation to “fix” the ACA employer mandate?

Let’s consider four key points:

One, the employer mandate has several design flaws—a mistaken definition of “full-time” employee as averaging 30 or more hours a week; an unusual definition of “large” employer as having 50 or more full-time employees; and a labyrinthine IRC 6056 employer reporting scheme. At a minimum these three provisions must, and will be, fixed.

Two, these and other flawed provisions can only be repaired through legislation, either to repeal or surgically amend the existing statutory language.

Three, legislation to make the necessary changes requires a consensus among Democrat and Republican lawmakers and the acquiescence of President Obama.

Four, the tea leaves tell us that neither Democrats nor Republicans will agree to legislative changes this year. Democrats will oppose legislation that would dramatically alter the President’s signature legislative accomplishment.

Likewise Republicans, betting that voter unhappiness with the Affordable Care Act rollout and cancellation of existing health plans will be an Election Day winner, will not support changes that President Obama and vulnerable Democrats could characterize as “perfecting Obamacare.”

What do the tea leaves predict, therefore, about 2014 and ACA changes? President Obama established an important if controversial precedent last July 3 when he unilaterally delayed the 2014 start date of the employer “play or pay” mandate until 2015.  The decision meant that the White House could interpret its authority under the law to flexibly implement key statutory provisions.

Given point one above, as well as all the rollout difficulties the Administration has encountered with the federal and state insurance exchanges, including too few younger and healthier enrollees in the risk pool mix, the tea leaves tell us that President Obama will once again delay the employer mandate—until at least 2016.

Look for hints of additional delay or flexibility in ACA implementation in the State of the Union address on January 28. The President will acknowledge the government’s missteps in rolling out the federal exchange website and perhaps make some recommendations for building a political consensus for legislative change. If he’s a tea drinker, who knows, he might just try to read the tea leaves!

Affordable Care Act 2014: Reading the Tea Leaves — I

Reading the Affordable Care Act (ACA) tea leaves is a little like reading a foreign language you haven’t fully learned: you can translate a few words but you can’t discern the full meaning.

Nevertheless, the tea leaves tell us a few things about ACA 2014:

First the data—The New Year begins with over 2 million people having selected a plan through the federal or state health insurance exchanges (HIX) during open enrollment from October 1-December 24, 2013.

And the window for selecting an HIX plan will remain open until March 31, 2014, allowing even more to enroll. Chances are that the White House will come pretty close to hitting its 2014 plan selection goals.

But that leads to a second key point: how many of those individuals who have initiated enrollment will pay their premium on time and every month? Some speculate that up to half of those who have selected a plan may not complete enrollment by paying their monthly premium—in other words, they won’t actually be insured. That’s why many insurers are giving applicants until January 10 or later to pay their January premium. Who knows what they’ll do in February. The tea leaves tell us that the payments issue could become the ACA 2014 Achilles Heel.

Third, the “mix” of enrollees in the exchanges, known as the risk pool, will determine their financial viability. The ACA is built on the principle that younger and healthier enrollees’ premiums subsidize affordable premiums for older and sicker enrollees. If not enough “young invincibles” sign up in 2014, ignoring the ACA Individual Mandate, adverse selection could destabilize risk pools, leading to much higher premiums in 2015.

Of course, one of the biggest ACA 2014 questions is, what will employers do? And will Congress enact legislation to correct the ACA’s flaws? Predicting these will require another cup of tea. And we’ll read those tea leaves in subsequent blogs.

Predicting 2014 Human Resources Policy: Reading the Tea Leaves

Democrats and Republicans in Washington DC agree that it’s impossible to predict HR-related legislation and regulations for 2014 — a battleground “mid-term” election year.

Since Democrats control the White House and the Senate, and Republicans control the House of Representatives, gridlock becomes the New Year’s default option.

With 21^st Century forecasting models unhelpful in politics, this blog turns to a 19^th Century alternative: tea leaves. According to Wikipedia, the Dutch introduced into the British Isles a belief that the future could be predicted by “reading” the tea leaf residue in cups. Therefore, over the next month or so we’ll look at the tea leaves to forecast what’s likely to happen in 2014 on five key HR-related issues:

• The Affordable Care Act: The Obama Administration says that as of January 1 over 1 million people have enrolled in the federal health insurance exchange and another 1 million in various state exchanges. What does 2014 hold for ACA? Will it be repealed? What about the employer “play or pay” mandate now set for 2015?

• Immigration Reform: The Senate in 2013 approved a comprehensive bill that offers a “pathway to citizenship” for some 12 million illegal immigrants. What will the Republican-controlled House do? Will comprehensive immigration reform become law?

• Tax Reform: Behind the scenes an effort is underway on Capitol Hill to reform America’s labyrinthine tax code—to reduce income tax rates and close loopholes. Does this initiative have a chance? How might it affect retirement benefits like pre-tax saving in 401(k)-type plans?

• Social Security Restructuring:  Social Security is running a cash flow deficit—annual payroll tax revenues have fallen short of annual benefit payments since 2010. Will Congress and the White House agree on a package of benefit and revenue changes to shore up the trust fund? How might this affect employer payroll taxes?

• Mandatory Paid Family & Medical Leave: Rhode Island, California and New Jersey have enacted legislation to require employers to provide paid family and medical leave to their employees. Similar legislation has now been introduced in the US Senate and House that would apply nationwide. What are the pros and cons of paid FMLA? Will it become law in 2014?

Finally, while it’s not human resources policy per se, President Obama has focused attention on “income inequality,” in particular the 20-year+ stagnation of median wages that has squeezed the middle class. Apart from spurring economic growth, however, specific legislative solutions remain elusive, with the White House pushing an increase in the federal minimum wage. This blog will look at income inequality and forecast possible legislative scenarios.

Stay tuned to Ceridian’s website as we try to decipher what the tea leaves “tell” us about 2014 Human Resources Policy.

Federal Budget Deal: A Christmas Carol

“On balance, the benefit of having a deal is better than no deal.” Senator Lisa Murkowski (R-Alaska)

In Dickens’ holiday classic three ghosts visit cranky Ebenezer Scrooge on Christmas Eve and he awakens transformed by the experience. Unlike his late colleague Jacob Marley, Scrooge gets a second chance and changes his ways.

In this week’s 2-year budget agreement Congress mimics Scrooge’s redemption. Republicans and democrats have learned their lesson: this fall’s government shutdown drove public disapproval of Congress to historic highs—to over 80% in many polls.

The “Ghost of Christmas Future” is telling senators and representatives that they will be turned out of office next Election Day if they don’t mend their ways and compromise on big issues.

Brokered by democratic senator Patty Murray (WA) and republican representative Paul Ryan (WI), the new budget deal will fund the government for two years, putting another shutdown off the table.

The deal has pluses and minuses:

On the plus side and echoing Senator Murkowski, at least they reached a deal and avoided another shutdown. And HR and payroll professionals won’t have to endure another end-of-year nail-biter about a payroll tax holiday or whether income tax rates will be extended. This year Congress should leave town with no last-minute hysterics.

Another big plus is that the deal is bipartisan. It passed the normally acrimonious House by a vote of 332-94 and the Senate by 64-36.

Finally, the idea of democrats and republicans working together on something, in this case the federal budget, bodes well for the future on issues like immigration, Social Security and taxes.

But the budget deal has its minuses too. First and foremost, it does almost nothing about government deficits or the country’s unsustainable public debt—now over $17 trillion. In fact, the deal lets the debt keep growing.
Second, this is really a very small agreement—federal discretionary spending actually increases from $986 billion in FY 2013 to $1.012 trillion this fiscal year and $1.014 in FY 2015. And the deal addresses neither runaway entitlement spending nor tax revenues.

True, annual government deficits are projected to decrease over ten years, but only by a cumulative $23 billion—a drop in the proverbial bucket. Indeed, the nation’s public debt would keep rising over those ten years since Washington DC would continue to run annual multi-billion deficits.

Taking account of the pluses and minuses, what’s the takeaway?

First, notwithstanding a deep ideological chasm Congress found a way to reach across the aisle and avoid shutting down the government over the federal budget.

Second, think incremental policy change for the next year as opposed to sweeping reform. Congress will be hitting singles, not home runs. Comprehensive immigration reform, for example, is off the table for now. Ditto a “Grand Bargain” of spending and tax reform.

Third, expect a toning down of heated partisan rhetoric on Capitol Hill. To be sure we’ll still have full-throated political debates, but the constant verbal warfare is likely to abate at last.

What would Charles Dickens say about all this? Probably that the budget deal experience, like Ebenezer’s, represents a second chance. The public will be relieved that another nasty shutdown has been averted; but they will remain skeptical that Congress has truly redeemed itself.

Happy Holidays!

Healthcare Reform: The Sequel?

President Obama’s healthcare reform initiative is in the national spotlight these days, as officials scramble to fix the website data hub at the heart of the Affordable Care Act.

But behind the scenes another healthcare reform project is underway, part of an effort to reduce America’s unsustainable $17 trillion public debt—the highest since World War II as a share of the economy. While an agreement to cut government spending and raise additional tax revenue is unlikely right now, Capitol Hill budget experts have targeted tax policy for employee health benefits as among the best options for reducing Uncle Sam’s gargantuan debt burden.

The Congressional Budget Office, in a November paper, Options for Reducing the Deficit: 2014-2023, identified the present law tax “exclusion” for employer-provided health coverage as the most expensive revenue loser in the U.S. tax code.

More specifically, CBO concludes that exempting employer and employee payments for health insurance from income and payroll taxes “costs the federal government about $250 billion in foregone revenues each year.” (Italics added)

Little wonder then that the search for new sources of government revenue to reduce federal budget deficits could impact today’s tax-free treatment of employer-provided health coverage. Indeed, it’s almost impossible to conceive of a bipartisan deficit reduction package that would not involve in some way curtailing the present law exemption.

One big complication, of course, is the Affordable Care Act provision—scheduled to take effect in 2018—that will impose a 40% excise tax on high-value employee health plans. Obviously, a change in the tax law affecting employer-sponsored coverage would need to take account of this new excise tax.

In its new paper CBO presents two alternatives: The first builds on the ACA excise tax by moving up its effective date and expanding its impact. Specifically, CBO suggests “accelerating” the excise tax start date to 2015 from 2018 and lowering the threshold for “high value” health plans—hitting “Chevrolet” plans instead of only “Cadillac” plans.

This option would reduce federal budget deficits by $240 billion between 2015 and 2023, which is the good news. But this option would also dramatically affect employer-provided health coverage decisions, possibly pushing employers to offer only low-premium, high-deductible health plans for workers and their families. And some employers would be likely to drop coverage entirely, sending more households to the new health insurance exchanges.

The second CBO alternative would eliminate the ACA 40% excise tax and replace it with “a limit on the extent to which employer-paid health insurance premiums and contributions to FSAs, HRAs and HSAs could be excluded from income and payroll taxation.”

Specifically, this option would cap the total amount of employer and employee contributions for health insurance and out-of-pocket health costs that can be excluded from taxation at $6,420 a year for individual and $15,620 for family coverage. CBO says this alternative would decrease federal deficits by over $500 billion between 2015 and 2023, a huge contribution to cutting America’s out-of-control public debt.

Needless to say, alternative two would completely disrupt our understanding of employer-sponsored health coverage as it has existed for some 70 years. More families would enroll in ACA exchange plans and employer coverage would essentially be redefined as consumer-directed, employee-managed health insurance. And, of course, unless offset by a new health insurance tax credit of some kind, it would be hard not to see this as a big tax increase.

To be sure, CBO in this paper is meeting its responsibility to put policy options for deficit reduction before our elected representatives. Congress may disregard or modify these two and has many other alternatives to reduce annual budget deficits and the public debt burden passing to future generations.

But the CBO paper makes one thing perfectly clear: healthcare reform is not over; President Obama’s Affordable Care Act is not the last word. That law is sure to be amended going forward and new tax-related initiatives are sure to appear that could further disrupt employee health benefits. The healthcare reform genie is out of the bottle.

FSA Carryover: At Long Last

Like long-hopeful sports fans whose patience is finally rewarded when their team wins the championship, advocates of change in the FSA “use-it-or-lose-it” rule have just won a huge victory.

In a move that had been expected, the U.S. Treasury Department and the IRS announced in Notice 2013-71 on October 31 that employers would be permitted to amend their health FSAs to allow workers to carry over into the immediately following plan year up to $500 of unused amounts remaining at the end of the plan year.

Significantly, Treasury specified that the $500 carryover “does not affect the maximum amount of salary reduction contributions” that participants are permitted to make, currently $2500, under the provisions of the Affordable Care Act. Workers could therefore carry over $500 in unspent FSA funds, making a maximum of $3000 available in the following plan year.

Over a decade ago Ceridian was one of the first and strongest supporters of HR 1590, legislation introduced by Minnesota representative Jim Ramstad, to allow a $500 FSA carryover. Business organizations like the American Benefits Council, the Business Roundtable, the US Chamber of Commerce and the National Association of Manufacturers all lined up in support of sensible modification of the FSA “use-it-or-lose-it” rule.

The argument for change was obvious: the “use-it-or-lose-it” rule, in requiring forfeit of unused end-of-year FSA funds, discouraged tax-advantaged saving for ever-rising out-of-pocket medical costs.

The argument against the FSA “rollover,” as it came to be known, was that it would somehow become a back door to out-of-control deferred compensation, something expressly prohibited under the governing regulations for Internal Revenue Code Section 125 cafeteria plans. Because of the deferred comp barrier, the “use-it-or-lose-it” rule remained a fixture of FSA regulation for decades.

Why the Policy Change Now?

Somewhat surprisingly, credit for the $500 FSA carryover goes to the Affordable Care Act (ACA)—specifically the provision capping annual FSA elections at $2500, which became effective for FSA plans that began during 2013.

Treasury officials hinted at the coming change in IRS Notice 2012-40, which established rules for employers to implement the $2500 FSA statutory cap. The 2012 guidance suggested that the FSA annual limit in many ways obviated the concern that FSA carryover funds might accumulate over time as deferred compensation. Put simply, the ACA cap on annual FSA contributions made a strict “use-it-or-lose-it” rule unnecessary.

Effective Date

Perhaps to make the $500 carryover coincide with the 2013 statutory limit on FSA contributions, Treasury and IRS decided to allow employers to adopt the carryover provision to health FSAs “for the current Section 125 cafeteria plan year,” i.e., for 2013 FSA funds.

To be sure, adoption of the carryover option comes at a price—“a Section 125 cafeteria plan that incorporates a carryover provision may not also provide a grace period in the plan year to which unused amounts may be carried over.”

In other words, employers will decide which option to choose: carryover or grace period, making it unlikely that many employers who offer a grace period will opt for the FSA carryover in this first year—2013.

The October 31 Treasury/IRS carryover announcement is good news for consumers. No longer will an important option for tax-favored saving for health costs contain an end-of-year trap door. More and more working families will be able to leverage the tax savings of FSAs without fear of forfeiting hard-earned wages.

Looking back over some 12 years of support for practical modification of the FSA “use-it-or-lose-it” rule, Ceridian can identify with the perspective of Janet Trautwein, CEO of the National Association of Health Underwriters: “This is an issue that NAHU has been working on for many years and we are glad to see these common sense changes finally come to fruition.”

Deciphering ACA Individual Mandate Delays: Making Sense of the Options

Breakdowns in the rollout of the government’s health insurance exchange have fueled speculation about delaying the ACA “Individual Mandate.” This is the requirement that Americans buy health insurance in 2014 or pay a tax penalty of $95 or 1% of income, whichever is greater.

Three options are on the table to delay the individual mandate:

First, the mandate itself could be delayed for one year—much as the employer “play or pay” mandate has been delayed until 2015. Senator Joe Manchin (D-WV) advocates legislation to do just that.

While republican and some democrat lawmakers support a one-year delay, the White House opposes it, reflecting insurance industry concerns that plan pricing has been based on the mandate’s spurring millions of younger and healthier people to enroll in 2014.

A second option would be to keep the mandate in place but delay for one year any penalties for not having coverage. The argument is that potential enrollees should not be penalized for website breakdowns.

In truth, however, penalties are a murky part of individual mandate enforcement. Not only is there a so-called “hardship” exemption, which gives HHS wide latitude to waive penalties, but they would not actually be imposed until tax returns are filed in 2015.

But the biggest problems with options one and two are political: a one-year delay of either the individual mandate itself or the statutory penalties would probably require legislation—a non-starter for the White House.

A third and more promising possibility for delay is in the open enrollment period, now fixed by regulation at between October 1 and March 31, 2014. In future years open enrollment will extend from October 15 until December 7.

Last week the White House clarified an apparent “disconnect” between the statutory mandate that individuals’ health coverage be effective January 1, 2014 and a regulation keeping the enrollment window open until March 31, 2014.

HHS announced that as long as people “enrolled” in health coverage by March 31 they would incur no penalty, even if coverage did not actually go into effect until after March 31. Since the system apparently needs two weeks to process applications and since coverage usually takes effect on the first day of the month, this means that health coverage might not be in place until April or May.

In clarifying the disconnect, therefore, the individual mandate itself has been delayed from January 1, 2014 until April or May 2014.

Further complicating individual mandate enforcement, of course, is that required employer reporting under IRC 6055 and 6056 has been delayed until 2015. HHS and IRS will therefore be unable to confirm employer health coverage individuals claim for 2014.

It’s possible that continuing breakdowns in the exchange website will in the end force the Administration to extend the open enrollment window past March 31, 2014. The White House has pledged to have the system fixed and fully operational no later than November 30, leaving time for individuals to apply by December 15 for coverage to take effect on January 1.

What seems most interesting about the latest developments is that while failure of the government’s website rollout has gotten all the headlines the subtext is potentially more important—the ACA individual mandate has been delayed for many, depending on when they enroll, from January 1 until as late as May 1. That should be front page news!

ACA Megatrend #5: The Economy

The fifth and final ACA Megatrend in our series is, paradoxically, the most important and the least connected directly to the ACA itself: the economy.

The health of our economy, nationally and regionally, sector-by-sector, will profoundly affect how employers and working families respond to the healthcare reform law.

It is the great misfortune of President Obama’s signature legislative achievement to be launched into a persistently weak economy, with anemic GDP growth, high unemployment and widespread economic uncertainty.

With only a 2% real growth rate, recovery from the worst recession since the Great Depression has been unusually lackluster. Meanwhile, 11 million people remain unemployed, with another 7 million classified part-time while seeking full-time work. It’s hard to imagine a more inhospitable climate in which to implement major social policy legislation.
This grim macroeconomic environment overshadows an equally troubling microeconomic reality: employer health costs have practically doubled over the last decade. According to the Kaiser Family Foundation, average health insurance premiums rose just under 100% from 2002 to 2012.

Putting all this together, as America’s employers prepare to implement the ACA’s major compliance provisions in 2014, 2015 and beyond, and as they formulate short and long run health benefit strategies, they face a double-barreled challenge—a weak economy and skyrocketing health costs.

A second feature of today’s economy will have an equally important impact on ACA implementation: wage stagnation. Median household income stood at an inflation-adjusted $51,017 in 2012, actually lower than the 1999 peak of $56,080. In other words, the incomes of average Americans are stuck in neutral if not in reverse—and certainly not keeping pace with healthcare costs.

How might these macro and micro developments affect the Affordable Care Act? In a word, compliance.
Starting next year individuals will be required to purchase health insurance coverage or pay a tax penalty. Even with subsidies to buy insurance on the federal or state exchanges, younger and healthier people, feeling the pressures of eroding purchasing power, may balk at paying the required premiums. In this sense the viability of the ACA exchanges depends on growth in the economy, jobs and wages.

For employers, starting in 2015, the “Play or Pay” mandate will require that affordable and comprehensive coverage be offered to full-time employees to avoid fines of $3,000 per subsidized employee. And in 2018 the so-called “Cadillac Tax” kicks in on high-value health plans.

As effective dates for these and other ACA compliance mandates approach, employers will be keeping one eye on the regulations and one eye on the economy, nationally and in their own business. A great secret of the Affordable Care Act is that its success depends on employers continuing to offer health coverage to some 160 million people—keeping your own coverage, to paraphrase the president.

Whether employers are able to continue offering health coverage, and what changes the future may hold for employee health benefits, depends totally on what happens to the macro and micro economy.

At the end of the day, ACA Megatrend #5 means that the success of the Affordable Care Act, for employers and working families, will ultimately depend on the success of the U.S. economy.

Debt Deal: Good News and Bad News

Democrats and Republicans yesterday hammered out an agreement to reopen the federal government and raise the public debt ceiling. That’s good news.

The bad news is the agreement is only for 90 days—until January 15. 

But there’s more good news and bad news in this agreement that comes after a two-week government shutdown. First the good news:

• No U.S. government default on its debt obligations.  With the economy still on shaky ground a blow to the nation’s Triple A credit rating could have reverberated around the globe.
• Even better news: the deal ends threatened debt default as a negotiating tactic. Default isn’t going to happen, period.
• Communication lines have re-opened between Republicans and Democrats. The silent treatment clearly didn’t work to address policy differences so the two parties are again on speaking terms—no small accomplishment in these hyper-partisan times.
• The Affordable Care Act (ACA) will not be restructured. This is good news not because the ACA is perfect and doesn’t need to be fixed—far from it. But the uncertainty around repealing or de-funding the law’s central pillars, like the Individual Mandate, has been lifted. The debt battle showed that President Obama will not accept fundamental changes to his signature legislative achievement—the issue that sparked the shutdown in the first place.
• Income verification for ACA subsidies. D’s and R’s agreed that the government will verify the income eligibility of those who apply for taxpayer-financed subsidies to purchase insurance on the exchanges. This is aimed at HHS’ decision in July to allow an “honor system” for 2014 subsidies. In any event, IRS had planned to have taxpayers “reconcile” subsidies with income reported on 2014 tax returns.

Now the Bad News:

• The philosophical chasm between Capitol Hill liberals and conservatives, and to some extent among Republicans, persists. This debt deal only “kicks the can down the road,” as the saying goes. Congressional Democrats and the White House have won an important battle, but partisan warfare will continue.
• The tactic of threatening default in order to de-fund Obamacare served mainly to distract from the biggest issue—skyrocketing U.S. government debt, now headed above a mind-bending $17 trillion.  With the exception of last year’s “sequester,” little has been done to reduce budget deficits and get the public debt on a sustainable trajectory.
• Yet another committee. Yesterday’s debt deal creates a new “negotiating committee” to develop a longer term budget plan by December 13. Seriously.  Friday the 13^th?
• A triumph of hope over experience, it’s hard to imagine the new committee coming up with a budget reduction plan that could be adopted in this Congress.
• Other big issues on ice. With all the noise around the debt ceiling and the government shutdown you’d think no other issues were on the table. Alas, immigration reform, climate change, tax reform and yes, ACA amendments, remain urgent action items.

While it’s possible that lawmakers will become like your favorite football team and immediately turn their attentions to the next game, in all likelihood the debt deal winners and losers melodrama, coupled with the need to stay focused for the next few months on the budget deficit and public debt, will leave little energy for other priorities.

Moreover, 2014 is just around the corner, when one-third of Senate seats and all House seats are up for election. Expect most other legislation to wind up on the back burner.

So where are we? Default has been avoided; the government is re-opened. The best news is the immediate crisis has been averted.

But the basic problem has not been solved. The much-needed longer term solution for America’s fiscal imbalances remains elusive. The worst news is that nothing that happened in Washington DC this week suggests that a compromise can be found anytime soon.