This Week on the Hill
The House and Senate are in session this week as the House Appropriations Committee looks to complete its work on the 12 appropriation bills for fiscal year 2018 and the Senate delays a vote on the health care bill.
The House convenes today and will consider three bills under consideration of the rules. On Tuesday the chamber will consider four bills including H.R. 3050, the Enhancing State Energy Security Planning and Emergency Preparedness Act of 2017. On Wednesday the House will consider two bills related to cross-border energy and on Thursday will consider a land exchange bill. The House is out on Friday. Several committees scheduled hearings this week: the Agriculture Committee will hold a hearing Tuesday on SNAP in the Farm Bill and a hearing Wednesday on infrastructure in rural America; the Education and the Workforce Committee will hold a hearing Tuesday on state and local education reform; and the Transportation and Infrastructure Committee will hold a hearing Tuesday on FAST Act implementation.
The Senate convenes today and will resume consideration of Patrick Shanahan’s nomination to be Deputy Defense Secretary. Several committees have scheduled hearings this week: the Commerce, Science and Transportation Committee will hold a hearing Thursday on a FirstNet update; and the Environment and Public Works Committee will hold a hearing Thursday on innovative water financing.
Fiscal Year 2018 Budget Update
Several appropriations bills were approved by House committees last week and the Senate took action on its first appropriations bill. The House Appropriations Committee released its topline spending amount, $1.14 trillion, which is higher than the total set in law under the Budget Control Act ($1.065 trillion), with most of the increased funding directed to defense spending. The House Budget Committee has scheduled a markup for the fiscal year 2018 budget resolution for Wednesday at 10 am.
The following spending bills saw action in the House last week:
- Transportation-Housing Urban Development: passed the subcommittee by a voice vote on Tuesday. The $56.5 billion measure reflects a 2 percent reduction from fiscal year 2017 enacted levels and a 20 percent increase from the President’s request. The bill eliminates TIGER funding and cuts funding for the Community Development Block Grant Program by $100 million. The bill will be considered by the full committee today.
- Interior-Environment: passed the subcommittee by voice vote on Wednesday. The $31.5 billion measure is a 2.5 percent cut from fiscal year 2017 enacted levels. The bill contains policy riders making it easier for the administration to undo the Waters of the U.S. Rule (WOTUS) and language to prevent listing of the sage grouse as an endangered species. It also cuts funding to EPA by 7.4 percent, the lowest level since 2008. The bill will be considered by the full committee on Tuesday.
- Energy-Water: passed the full committee by voice vote on Wednesday. The $37.6 billion measure is a cut of $203 million from fiscal year 2017 enacted levels, or less than 1 percent. The bill cuts funding for renewable and energy efficiency research by approximately $1 billion while increasing funding for nuclear activities by a similar amount.
- Homeland Security: passed the subcommittee by voice vote on Wednesday. The $44.3 billion measure is a slight increase to the President’s request of $44.1 billion and includes $1.6 billion to begin construction of the President’s border wall, in addition to increased immigration and customs enforcement. The bill will be considered by the full committee on Tuesday.
- Commerce-Justice-Science: passed the full committee by a vote of 31-21 on Thursday. The $54 billion in discretionary funding represents a cut of $2.6 billion from fiscal year 2017 enacted levels. The bill increases funding for the FBI and Drug Enforcement Agency but cuts funding for the Legal Services Corporation and eliminates funding for Department of Justice grant programs for hiring police officers and juvenile justice.
- State-Foreign Operations: passed the subcommittee by voice vote on Thursday. The $47.4 billion measure is a cut of $10 billion from fiscal year 2017 enacted levels but is an increase of $7 billion above the President’s request. The bill will be considered by the full committee on Wednesday.
- Agriculture: passed the full committee on Wednesday. The bill contains $20 billion in discretionary funding, which is $876 million below the fiscal year 2017 enacted levels. The discretionary and mandatory funding combined is $144.9 billion, which is $8.6 billion below 2017 levels.
- Labor-Health and Human Services-Education: passed the subcommittee by a vote of 9-6 on Thursday. The $156 billion bill is a cut of $6 billion from fiscal year 2017 enacted levels. The following agencies received cuts: HHS received a cut of $542 million; Education received a cut of $2.4 billion; and Labor received a cut of $1 billion. The bill also includes language preventing HHS from using discretionary funds to implement the Affordable Care Act. The bill will be considered by the full committee on Wednesday.
- Financial Services: passed the full committee by a vote of 31-21 on Thursday. The $20.2 billion bill is a cut of $1.3 billion from fiscal year 2017 enacted levels.
The Senate Appropriations Committee approved its $88.9 billion Military Construction-Veterans Affairs spending measure on Thursday.
Senate Republicans Release Updated Health Care Draft Bill
Last week, Republican leaders in the Senate released an updated version of the discussion draft bill, H.R. 1628, the Better Care Reconciliation Act of 2017 (BCRA), which would amend the Affordable Care Act (ACA). The Senate also released a summary identifying the major revisions to the previous version of the discussion draft. The Medicaid sections of the bill would remain largely unchanged from the initial draft with some additional minor changes from the previous version. The updated discussion draft would require the Secretary of HHS to establish a 100 percent federally funded, four-year competitive demonstration project, with priority given to the 15 states with the lowest population density, to make payment adjustments for the purpose of continuing to provide and improve the quality of home and community-based services for elderly or blind and disabled enrollees. Also, during calendar years 2020 through 2024, if the Secretary of HHS declares a public health emergency, state medical assistance expenditures in a particular part of the state will not be counted toward the per capita caps or block grant allocations for the declared period of the emergency. It also changes the Disproportionate Share Hospital (DSH) calculation from per Medicaid enrollee to per uninsured. Other changes in this updated discussion draft would: dedicate an additional $70 billion to encourage state-based reforms, in addition to the $112 billion in the original bill; and add $45 billion in additional funds to address opioid addiction. The Congressional Budget Office has delayed the release of its updated score today, and it is unclear when a score may be released. The Senate delayed its vote on the bill for this week; a vote may be rescheduled for next week.
House Approves FDA Fee Reauthorization Bill
On Wednesday the House passed by voice vote the Food and Drug Administration (FDA) Reauthorization Act (H.R. 2430), which would reauthorize FDA user fee programs for prescription drugs, medical devices, generic drugs and biosimilar products through fiscal year 2022. According to news reports, industry fees comprise approximately $2 billion of FDA’s nearly $5 billion budget. The bill sets new fee levels for fiscal years 2018 to 2022, while also requiring FDA to prioritize the approval of certain generic drugs. The bill now goes to the Senate for consideration. The current authority for FDA to collect fees expires September 30. The administration issued a statement outlining concerns with the bill.
CMS Approves Alaska’s 1332 Waiver
On Tuesday the Centers for Medicare and Medicaid Services (CMS) approved Alaska’s 1332 State Innovation Waiver application; the state sought the waiver to implement the Alaska Reinsurance Program for 2018 and future years in an effort to stabilize the individual healthcare market. The State Innovation Waiver under Section 1332 of the Affordable Care Act (ACA) allow the state to implement the reinsurance program for the next five plan years (January 1, 2018-December 31, 2022). Alaska projects that the program will reduce premiums by 20 percent in 2018 and more consumers may have coverage. The state will also receive pass-through funding to help offset a substantial portion of state costs for the state-operated reinsurance program. The waiver is approved subject to the state accepting the specific terms and conditions. A fact sheet on the waiver can be found here and the CMS approval letter to Alaska can be found here.
FEMA Announces Availability of Fiscal Year 2017 Hazard Mitigation Grants
Last week the Federal Emergency Management Agency (FEMA) announced $250 million in grant availability through two programs under the Hazard Mitigation Assistance program. First, $160 million is available through the Flood Mitigation Assistance Grant Program, which provides resources to assist states, tribal governments, territories and local communities in their efforts to reduce or eliminate the risk of repetitive flood damage. This year the program will prioritize $70 million of the total funding for community flood mitigation projects. A fact sheet on the funding notice can be found here. Second, $90 million is available through the Pre-Disaster Mitigation Grant Program, which provides resources to assist states, tribal governments, territories and local governments in their efforts to implement a sustained pre-disaster natural hazard mitigation program. Each state and territory is eligible to receive 1 percent of the funding, 10 percent is set aside for tribes, and the balance is awarded competitively. A fact sheet can be found here.
Trust Fund Outlooks Released for Social Security and Medicare
Two trustees reports were released last week, highlighting the financial situations of the Social Security and Medicare trust funds. The Social Security Board of Trustees projected that the Disability Insurance trust fund will become depleted in 2028, extended from last year’s estimate of 2023, with 93 percent of benefits still payable. The Old-Age and Survivors Insurance trust fund is projected to become depleted in 2035, the same prediction as last year’s report. The full report can be found here. The Medicare trustees issued projections for the Hospital Insurance Trust Fund (Part A) and the Supplementary Medical Insurance Trust Fund (Parts B and D). The report projects that the Hospital Insurance trust fund will reach asset depletion in 2029, when revenues are projected to cover 88 percent of program costs, the Supplementary Medical Insurance trust fund is expected to be adequately financed over the next 10 years and beyond because premium income and general revenue income for Parts B and D are reset each year to cover expected costs.
House Subcommittee Advances Drinking Water Revolving Fund Reauthorization
The Environment Subcommittee of the House Energy and Commerce Committee advanced legislation by voice vote on Thursday to reauthorize the safe drinking water program. The Drinking Water System Improvement Act would authorize $8 billion over five years for the Drinking Water State Revolving Loan Fund program; open the eligible uses of the revolving fund to cover costs associated with siting, preconstruction activities, and replacing or rehabilitating aging treatment, storage, or distribution facilities of public water systems; create a strategic plan to have an electronic system that allows water utilities to send their compliance data to states, who then send it to the Environmental Protection Agency (EPA); and increase the amount of loan subsidies available for disadvantaged communities to 35 percent while extending the repayment schedule for disadvantaged communities from 30 years to 40 years. Additional information on the bill can be found here.
Lawmakers Look to Expand GI Bill Benefits
Last week Representatives Phil Roe (R-TN) and Tim Walz (D-MN), chair and ranking member of the House Veterans’ Affairs Committee, introduced the Harry W. Colmery Veterans Educational Assistance Act of 2017. The bill would remove time restrictions to use the GI Bill (currently set at 15 years), consolidate the GI Bill into a single program over time, provide significant increases in GI Bill funding for reservists and guardsmen, dependents, surviving spouses and surviving dependents, and provide 100 percent GI Bill eligibility to Post 9/11 Purple Heart recipients. The bill also restores eligibility for service members whose school closes in the middle of the semester and creates a pilot program to cover costs for certain high technology courses. A summary of the bill can be found here. The committee will hold a hearing on the bill on Monday and will markup the bill on Wednesday.
Governors Send Letter on Early Childhood Education Efforts
On Thursday Governors Sandoval (Nevada) and Inslee (Washington) sent a letter to leadership of the Senate and House Education Committees, encouraging support for strengthening the state-federal partnership on early childhood education. The letter notes that while every dollar of federal investment in early childhood education and child care is critical, current programs and investments must be programmatically aligned, focused on quality, and updated to maintain the pace of state-level early childhood innovation. Recommendations in the letter include reauthorizing current programs to allow greater coordination, redesigning the structure of federal programs to eliminate the current siloed approach, and placing governors and states at the center of the state-federal early childhood education structure.
Recently Released Reports
The Impact of Eliminating the State and Local Tax Deduction, Government Finance Officers Association
Career Pathways: Five Ways to Connect College and Careers, Center on Education and the Workforce at Georgetown University
Medicaid: It's Not Just for Nursing Homes, Center for Retirement Research at Boston College
ACT for All: The Effect of Mandatory College Entrance Exams on Postsecondary Attainment and Choice, Department of Public Policy at University of Connecticut
Section 1332 State Innovation Waivers: Current Status and Potential Changes, Kaiser Family Foundation
Economic News
Consumer Price Index Unchanged in June as Real Hourly Earnings Increased 0.2 Percent
The U.S. Bureau of Labor Statistics released new data on the Consumer Price Index for All Urban Consumers (CPI-U) for June 2017, showing the CPI-U was unchanged on a seasonally adjusted basis. Over the last twelve months, the all items index increased 1.6 percent. The index for all items less food and energy rose 0.1 percent in June, its third straight such increase, while the energy index declined 1.6 percent, with the gasoline index falling 2.8 percent. For the 12 months ending June, the all items index rose 1.6 percent; this measure has been declining steadily since February, when it was 2.7 percent. The index for all items less food and energy rose 1.7 percent for the 12 months ending June, the same increase as for the 12 months ending in May. Meanwhile, real average hourly earnings for all employees increased 0.2 percent from May to June, seasonally adjusted. This result stems from a 0.2 percent increase in average hourly earnings being combined with no change in the CPI-U.