This Week on the Hill
The House and Senate are in recess until September 5.
Fiscal Year 2018 Budget Update
With the House and Senate in recess until next month, hearings and votes on fiscal year 2018 appropriations bills and budget resolutions are paused. Last week Senate Budget Committee Chair Mike Enzi (R-WY) indicated he intends to mark up a budget resolution in September, which is expected to include reconciliation instructions for tax reform. Meanwhile, the House passed four spending bills as part of a “minibus” before leaving for recess (covering Defense, Energy-Water, Legislative Branch and Military Construction-Veterans Affairs), and published reports indicate that the chamber may take up a 12-bill appropriations package in early September that includes the four-measure minibus plus the eight remaining spending bills. After returning from recess, the House and Senate will have 12 joint session days to complete work on appropriations prior to the close of the fiscal year on September 30.
Health Care and CHIP Update
Two Senate committees announced health care related hearings that will take place in September. First, Senator Lamar Alexander (R-TN), Chair of the Senate Health, Education, Labor and Pensions Committee announced hearings beginning the week of September 4th on actions Congress should take to stabilize and strengthen the individual health insurance market. The bipartisan hearings are expected to include state insurance commissioners, governors, health care experts, and insurance companies. Second, the Chair of the Senate Finance Committee, Orrin Hatch (R-UT), announced last week that the committee will hold a hearing on the Children’s Health Insurance Program (CHIP) reauthorization. The National Academy for State Health Policy recently released a blog on critical state decision points regarding CHIP, due to federal uncertainty over the reauthorization. Additional information on federal financing for CHIP from the Congressional Research Service can be found here.
EPA Launches Water Finance Clearinghouse
The Environmental Protection Agency (EPA) recently launched a Water Finance Clearinghouse to help communities making decisions for their drinking water, wastewater and stormwater infrastructure needs. The web-based portal is a searchable database with more than $10 billion in water funding sources across state, federal and local governments, as well as foundation funding sources. The clearinghouse also includes resources on financing mechanisms and approaches, consolidating information from existing EPA-supported databases. EPA will hold several webinars in August on how to use the clearinghouse.
Administration Releases 4th Quarter Allocations for SSBG and CSBG
The Department of Health and Human Services Administration for Children and Families recently released Dear Colleague letters to provide updates on fiscal year 2017 fourth quarter allocations for the Social Services Block Grant (SSBG) and Community Services Block Grant (CSBG). According to the SSBG letter, these awards represent the fourth release of funding to date for fiscal year 2017 and states may make expenditures consistent with the state’s plan under Title XX of the Social Security Act; a chart of allocations can be found here. The CSBG letter indicates these awards represent the final release of funding for the fiscal year and that “the final allocation amounts reflect a small reduction from the prior year due to the exercise of the Secretary’s authority to transfer up to 1 percent of funding within the department’s discretionary accounts.” Most states’ allocations were reduced by an average of approximately 0.9 percent from the prior fiscal year; a chart of allocations can be found here.
House Financial Services Advances HQLA Bill
On July 25, the House Financial Services Committee voted 60-0 to advance H.R. 1624, the Municipal Finance Support Act of 2017, as amended. The bill would require federal banking regulators to treat certain municipal securities that are liquid, readily marketable, and investment grade as high-quality liquid assets (HQLAs). The change would be implemented by amending the rule titled “Liquidity Coverage Ratio: Liquidity Risk Measurement Standards.” Issued in 2014, this rule requires large banks to hold certain high-quality liquid assets sufficient to meet short-term obligations and currently excludes municipal bonds as HQLAs. Additional information on the committee’s action can be found here. The bill is now available for scheduling on the House floor.
Treasury Projects Deadline for Raising the Debt Ceiling
Treasury Secretary Steven Mnuchin sent a letter to Congressional leaders on deadlines for increasing the debt ceiling. According to the letter, Secretary Mnuchin determined that a “debt issuance suspension period” previously determined to last until July 28 will continue through September 29. Based on available information, the Secretary believes it is critical that Congress act to increase the nation’s borrowing authority by September 29. Congress is currently in recess and is scheduled to return on September 5.
White House Opioid Panel Releases First Report
Last week the President’s Commission on Combating Drug Addiction and the Opioid Crisis released its interim report to the President, which recommends several actions to address the crisis. The commission’s recommendations include: declare a national emergency under the Public Health Service Act or the Stafford Act; grant waiver approvals for all states to eliminate barriers to treatment resulting from the federal Institutes for Mental Diseases exclusion in the Medicaid program; mandate prescriber education initiatives; establish and fund a federal incentive to enhance access to Medication-Assisted Treatment; provide model legislation for states to allow naloxone dispensing; and provide federal funding and technical support to states to enhance interstate data sharing among prescription drug monitoring programs. The commission was established by an Executive Order in March and includes the governors of New Jersey, Massachusetts and North Carolina.
DOT Proposes Rule to Streamline Private Investment in Transit Projects
Last Monday the Department of Transportation Federal Transit Administration (FTA) announced a proposed rule to facilitate public-private partnerships in public transportation. The newly proposed Private Investment Project Procedures (PIPP) for public transportation capital projects will allow recipients of federal funding to identify specific FTA regulations, practices, procedures or guidance documents that may be an impediment and apply for a modification or waiver of the specific requirements. The FTA Administrator would have discretion to grant a modification or waiver if certain criteria are met; however, the PIPP could not be used to waive any requirement under the National Environmental Policy Act (NEPA) or any other provision of federal statute. Comments on the proposed rule must be received by September 29.
EPA Reverses Delay on Ozone Rule Implementation
Last week the Environmental Protection Agency (EPA) withdrew the one-year extension of the deadline for states to begin meeting the ozone ambient air quality standards (NAAQS) that were promulgated in October 2015. That change lowered the 8-hour primary and secondary ozone NAAQS from 0.075 parts per million (ppm) to 0.070 ppm. After the EPA revises a standard, the first step in implementation is identifying areas of the country that meet or do not meet the standard. In June EPA Administrator Scott Pruitt announced the one-year delay, citing additional time for states to develop air quality plans and greater flexibility as reasons for the delay. With last week’s withdrawal of the delay, the EPA has until October 1st to determine which areas of the country meet the new standard and which will have to submit plans for lowering pollution to come into compliance.
CMS Releases May Medicaid, CHIP Enrollment Report
The Centers for Medicare & Medicaid Services (CMS) released the May 2017 monthly report on state Medicaid and Children's Health Insurance Program (CHIP) eligibility and enrollment data. These data were reported by state Medicaid and CHIP agencies as part of the Medicaid and CHIP Performance Indicator process. The preliminary data show that total enrollment equaled 74.6 million. Since October 2013, enrollment in both programs increased by more than 29.4 percent, compared with the July-September 2013 baseline. States that expanded Medicaid experienced enrollment gains of more than 38.5 percent, while states that did not expand Medicaid saw increases of 12.4 percent.
Recently Released Reports
Supreme Court Preview for States 2018, State and Local Legal Center
The Impact of State Approaches to Medicaid Financing on Federal Medicaid Spending, Medicaid and CHIP Payment and Access Commission
Highway Bridges: Major Projects Present Challenges for States, but Strategies Exist to Overcome Them, U.S. Government Accountability Office
Policy Snapshot: Statewide Longitudinal Data Systems, Education Commission of the States
The Costs and Consequences of Excess Credit Hours Policies, American Educational Research Association
Economic News
Economy Adds 209,000 Jobs in July
New data released last week by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 209,000 in July, higher than this year’s average monthly gain of 184,000. The unemployment rate was down slightly to 4.3 percent (compared to 4.4 percent the previous month). The data also shows that in July there were 7.0 million unemployed persons, little changed from June. The number of long-term unemployed (jobless for 27 weeks or more) was little changed at 1.8 million, accounting for 25.9 percent of the total unemployed. The labor force participation rate was essentially unchanged at 62.9 percent and has shown little movement on net over the past year. In July, job gains occurred in food services and drinking places (53,000), health care (39,000), professional and business services (49,000) and mining (1,000). Employment saw little change for construction, wholesale trade, financial activities, government, retail trade, transportation and warehousing, information, and manufacturing. The average hourly earnings for all private sector employees increased by 9 cents to $26.36 in July, following an increase of 4 cents in June. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent.