This Week on the Hill
The House and Senate are in this week as the Senate continues work on healthcare reform, with a vote possible prior to the July 4 recess.
The House convenes Tuesday and will consider 14 bills under suspension of the rules, including bills related to foster care and supporting families in substance abuse treatment. On Wednesday the chamber will consider H.R. 1873, the Electricity Reliability and Forest Protection Act and on Thursday will consider the Strengthening Career and Technical Education for the 21st Century Act (H.R. 2353). The House is in session Friday and will vote on H.R. 2842, which would make grants to states for demonstration projects that provide wage subsidies to enable low-income individuals to enter and retain employment. Several committees scheduled hearings this week, including some postponed from last week: the Agriculture Committee will hold a hearing Thursday on university research in the next Farm Bill; the Energy and Commerce Committee will hold a hearing Wednesday on defining and mapping broadband coverage; and the Judiciary Committee will hold a hearing Thursday on juvenile justice reform.
The Senate convenes today and is scheduled to take a confirmation vote on the nomination of Brock Long to be administrator of the Federal Emergency Management Agency (FEMA). Several committees scheduled hearings this week: the Commerce, Science and Transportation Committee will hold a hearing Tuesday on rural broadband and the Universal Service Fund and the Environment and Public Works Committee will hold a hearing Tuesday on innovative financing for water infrastructure.
Fiscal Year 2018 Budget Update
The House Appropriations Committee approved the fiscal 2018 spending bill for Military Construction-Veterans Affairs last week; the bill passed with a unanimous vote and marked the first spending measure to be reported out of a full committee in either chamber. The committee also adopted an “interim” discretionary spending allocation for the $88.8 billion measure, which is $6 billion above the fiscal year 2017 funding level; it is unclear if boosting funding for this spending bill will affect the remaining 11 bills. The House has yet to introduce a budget resolution for fiscal 2018, which would normally set the topline spending levels and allow for allocations to the subcommittees.
CMS Office of the Actuary Estimates Impact of the House Passed Health Care Bill
The Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary prepared an estimate on the American Health Care Act of 2017 (AHCA), as passed by the House on May 4. According to CMS, by 2026, the number of uninsured is estimated to be about 13 million higher under the AHCA, mostly as a result of declines in eligibility for Medicaid, the impact of the repeal of the individual mandate, and the net reduction to the subsidies available for the purchase of individual insurance. In calendar year 2026, Medicaid enrollment is estimated to be 8 million lower under the AHCA than under current law due to the combination of two factors: a decline of 6 million in enrollment for newly eligible adults under current law and a decline of 2 million in enrollment for all other Medicaid enrollees attributable to more frequent eligibility redeterminations, the repeal of retroactive eligibility, and optional state work requirements for adults. When this effect is combined with the implementation of per capita caps, overall Medicaid spending is estimated to be $105 billion, or nearly 11 percent, lower under the AHCA than under current law in 2026.
President Signs Executive Order During Workforce Development Week
On Thursday the President signed an executive order on expanding apprenticeships as part of the administration’s Workforce Development week. The order aims to provide more affordable pathways to secure, high paying jobs by promoting apprenticeships and effective workforce development programs, while easing the regulatory burden on such programs and reducing or eliminating taxpayer support for ineffective programs. The order authorizes the development of apprenticeship programs by third parties, which would be registered with the Department of Labor; promotes and funds apprenticeships; and establishes a Task Force on Apprenticeship Expansion. Also last week, Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) introduced the Apprenticeship and Jobs Training Act of 2017 to accelerate the expansion of the apprenticeship model by providing a $5,000 tax credit for new registered apprentices hired by American companies.
HHS Releases Funding for Youth Mental Health and Substance Abuse Treatment Services
Recently the Department of Health and Human Services (HHS) announced the release of funds through two separate programs to support youth mental health and substance abuse treatment services. The first award is for $72.5 million in grants through the Children’s Mental Health Initiative; the funding is allocated to seven states and one local government to improve outcomes for children, youth, and young adults who experience serious emotional disturbances. Recipients receiving funds include Massachusetts, Minnesota, Mississippi, Montana, Ohio, Pennsylvania, Texas and Carrol County, Maryland. The second award is for $34.4 million over four years to improve treatment for adolescents and/or transitional aged youth with substance use disorders and/or co-occurring substance use and mental disorders; these funds were awarded to 10 states and the Kickapoo Tribe of Oklahoma. Recipients include Connecticut, Hawaii, Michigan, New Mexico, Ohio, Rhode Island, Texas, Utah, Virginia and Wisconsin.
Senate Releases Bipartisan Principles on Driverless Car Legislation
Last week a bipartisan group of senators released principles for legislation on self-driving vehicles in advance of the hearing by the Commerce, Science and Transportation Committee. Senators John Thune (R-S.D.), Gary Peters (D-MI) and Bill Nelson (D-FL) indicate the principles are a first step in finalizing bipartisan legislation that will prioritize safety, fix outdated rules, and clarify the role of federal and state governments. Specifically, the principles state that legislation “must clarify the responsibilities of federal and state regulators to protect the public and prevent conflicting laws and rules from stifling this new technology.”
Congressional Members Sign Bipartisan Letter on Highway Trust Fund Fix
Lawmakers sent a letter last week to leadership of the House Ways and Means Committee, urging a long-term fix to the Highway Trust Fund. Over 250 Representatives from both parties signed the letter, which encourages the committee to include a long-term solution for the trust fund in any tax reform legislation crafted by the Ways and Means Committee. The letter notes that “over the past 30 years, all Highway Trust Fund revenue enhancements have been included in larger tax and deficit reduction packages. Any trust fund solution should entail a long-term, dedicated, user-based revenue stream that can support the transportation infrastructure investment supported by President Trump and Members of Congress from both parties.”
Appeals Court Rules on Prison Phone Rate Setting
Last Monday the D.C. Circuit Court of Appeals partially struck down a Federal Communications Commission (FCC) order that capped the rates for inmate phone calls. In a 2-1 decision, the court said the FCC overstepped its authority by trying to set limits on intrastate phone call rates, but found that a FCC rule capping interstate rates is permissible. The FCC finalized the rule in 2015, which was opposed by prison phone service providers. The FCC Chairman, Ajit Pai, released a statement indicating he will work to “address the problem of high inmate calling rates in a lawful manner.”
Task Force on Rural America Holds Inaugural Meeting
On Thursday several agencies participated in the first meeting of the Interagency Task Force on Agriculture and Rural Prosperity, which was created by an executive order on April 25. Officials from 22 executive branch departments and agencies attended the meeting of the task force, which aims to identify legislative, regulatory, and interagency policy changes that will promote agricultural and economic development, as well as improve the quality of life in rural America. The task force is directed to produce a report with concrete recommendations within 180 days of the task force’s creation. A recording of the meeting can be found here.
Education to Revise Rules on Student Borrowing
On Tuesday Education Secretary Betsy DeVos announced the department’s intention to establish rulemaking committees on the Borrower Defense to Repayment (BDR) and Gainful Employment (GE) regulations. The department also announced it would postpone the effective date of BDR, originally set for July 1, due to pending litigation. The BDR regulation clarifies how student borrowers who were defrauded by their postsecondary institution can appeal to have their federal student loans forgiven while the GE regulation rates vocational programs based on the student loan debt-to-earnings ratio of their graduates. The department intends to re-regulate both rules through a negotiated rule-making process, which begins with public hearings held next month in Washington, DC and Dallas.
Sensenbrenner Introduces Legislation to Undo Remote Sales Tax Laws in States
Representative Jim Sensenbrenner (R-WI) recently introduced the No Regulation Without Representation Act of 2017 (H.R. 2887), which would prohibit states from imposing sales tax collection requirements on businesses with no physical presence in the taxing state. The bill would prohibit states from imposing or assessing sales or use taxes on remote sellers, and also bars states from imposing reporting requirements related to remote sellers. By requiring a physical presence requirement for imposing state sales taxes, the bill would preempt laws that create nexus through affiliates and new marketplace collection measures being litigated in South Dakota; it would also move all litigation of the issue to federal court. The bill has been referred to the House Judiciary Committee.
Wind and Solar Generate 10 Percent of Monthly Electricity Generation for First Time
New data from the U.S. Energy Information Administration shows that for the first time, monthly electricity generation from wind and solar exceeded 10 percent of total electricity generated in the United States. Electricity generation from both of these energy sources has grown with increases in wind and solar generating capacity and on an annual basis, wind and solar made up seven percent of total U.S. electric generation in 2016. Based on annual data for 2016, Texas accounted for the largest total amount of wind and solar electricity generation, with nearly all generation from wind. As a share of the state’s total electricity generation, wind and solar output was highest in Iowa, where wind and solar made up 37 percent of generation in 2016; six other states saw generation of at least 20 percent.
Recently Released Reports
2017 KIDS COUNT Data Book: State Trends in Child Well-Being, The Annie E. Casey Foundation
State Revenue Report: State Tax Revenues in Flux, Rockefeller Institute of Government
Youth Tobacco Product Use, Including E-Cigarettes, Drops During 2015-2016, Centers for Disease Control and Prevention
Out of Sight: The Growth of Jails in Rural America, Vera Institute of Justice
Policy Analysis: Voucher Programs, Education Commission of the States
State Flexibility to Address Health Insurance Challenges Under the American Health Care Act, Kaiser Family Foundation
Economic News
Federal Reserve Raises Interest Rates
At its June meeting, the Federal Open Market Committee voted 8-1 to raise the target range for the federal funds rate a quarter point from 1.0 to 1.25 percent. The committee noted information received since the May meeting indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have moderated but have been solid, on average, since the beginning of the year and the unemployment rate has declined. Housing spending has picked up in recent months, and business fixed investment has continued to expand. On a 12-month basis, inflation has declined recently and is running somewhat below 2 percent. Looking at future possible adjustments, the statement says that “the Committee will carefully monitor actual and expected inflation developments relative to its inflation goal.” The one member who voted against raising the federal funds rate preferred to maintain the existing target range.
Consumer Price Index Decreased in May as Real Hourly Earnings Increased
The U.S. Bureau of Labor Statistics released new data on the Consumer Price Index for All Urban Consumers (CPI-U) for May 2017, showing the CPI-U decreased 0.1 percent on a seasonally adjusted basis. Over the last twelve months, the all items index rose 1.9 percent. A decrease in the energy index was the main contributor to the monthly decrease in the all items index; the energy index fell 2.7 percent, led by a decline of 6.4 percent in the gasoline index. The index for all items less food and energy rose 0.1 percent in May, as it did in April. The all items index increase over the last twelve months (1.9 percent) was a smaller increase than the 2.2 percent rise for the 12 months ending in April. Meanwhile, real average hourly earnings for all employees increased 0.3 percent from April to May, seasonally adjusted. This result stems from a 0.2 percent increase in average hourly earnings combined with a 0.1 percent decrease in the CPI-U.