This Week on the Hill
The House and Senate are in recess until September 5.
Fiscal Year 2018 Budget Update
Last week the House Rules Committee released the text of an eight-bill fiscal year 2018 minibus spending plan, and the chamber is expected to take up the package shortly after returning from the summer recess. In July the House passed a four-bill minibus (H.R. 3219) that covered spending for the Department of Defense, Legislative Branch, Military Construction-Veterans Affairs, and Energy and Water Development. H.R. 3354 will be the legislative vehicle for the remaining appropriations bills: Agriculture (H.R. 3268), Commerce-Justice-Science (H.R. 3267), Financial Services (H.R. 3280), Homeland Security (H.R. 3355), Interior-Environment (H.R. 3354), Labor-HHS-Education (H.R. 3358), State-Foreign Operations (H.R. 3362) and Transportation-HUD (H.R. 3353). Amendments are due from members by August 25. The House Rules Committee is expected to use a self-executing rule to roll the rest of the four-bill minibus into the eight-bill package. The Congressional Budget Office (CBO) released a cost estimate on the total 12-bill omnibus and estimated that the overall package would provide for $621 billion in base discretionary defense spending, which is $72 billion above the fiscal 2018 budget cap of $549 billion. Nondefense discretionary spending in the package totals $511 billion, about $4 billion below the $515.7 billion cap.
CBO Estimates Impact of Terminating Payments for Cost-Sharing Reductions
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimated the effects of terminating payments for cost-sharing reductions (CSRs) under the Affordable Care Act (ACA), at the request of the House Democratic Leader and the House Democratic Whip. Under the ACA, insurers are required to offer plans on the health insurance exchanges with reduced deductibles, copayments, and other cost sharing for certain enrollees based on income. To qualify for CSRs, most enrollees must purchase a silver plan and generally have income between 100 percent and 250 percent of the federal poverty level. The insurers then receive federal payments to cover the costs they incur. The CBO estimates that gross premiums for silver plans offered through the marketplaces will be 20 percent higher in 2018 and 25 percent higher by 2020, which will increase the amount of premium tax credits paid out by the federal government according to the ACA’s statutory formula, offsetting the costs for most individuals. Implementing the policy would increase the federal deficit, on net, by $194 billion from 2017 through 2026, and the number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020. CBO notes that the effects are uncertain and would depend on how the policy is implemented. The National Academy for State Health Policy prepared a blog that provides additional background information on the cost-sharing reduction payments of the ACA. According to published reports, the administration has announced it will make the August payments to insurers.
President Issues Executive Order on Infrastructure Permitting
On Tuesday the President issued an executive order (EO) on “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects.” The order establishes a two-year goal to process environmental documents for major infrastructure projects and implements a One Federal Decision policy under which the lead federal agency will work with other relevant agencies to complete the environmental reviews and permitting decisions needed for major infrastructure projects. The entire environmental review and permitting process will be reviewed to improve performance across government, with the Office of Management and Budget (OMB) developing a two-year government-wide modernization goal. The order also revokes an executive order from January 30, 2015, which would have established a federal flood risk management standard and required federally funded projects to be able to withstand stronger storms and flooding due to projected climate changes. A fact sheet on the new order can be found here and a six-page fact sheet on an infrastructure initiative included in the President’s 2018 budget can be found here.
“Forever GI" Bill Signed Into Law
Last Wednesday the President signed the Harry W. Colmery Veterans Educational Assistance Act of 2017 (H.R. 3218) into law. The bill, also known as the “Forever GI Bill,” makes several changes to expand educational benefits for veterans, including: removes, for new enlistees, the 15-year limit on when recipients must use their GI Bill benefits; permits members of the National Guard and Reserve who are training, deployed, or undergoing certain medical treatment to accrue benefits like active duty service members; allows veterans to use education benefits to pay for education through area career and technical schools and postsecondary vocational institutions; provides education benefits to survivors of those who died in the line of duty; extends full education benefits to recipients of the Purple Heart; and provides more on-campus educational and vocational counseling services for veterans.
OMB Releases Report on DATA Act Pilots
On August 10 the Office of Management and Budget (OMB) released a report to Congress on the Digital Accountability and Transparency Act of 2014 (DATA Act) pilot program. The DATA Act was intended to make federal spending data more accessible, searchable and reliable, as well as decrease the reporting burden for funding recipients. OMB was required to conduct a pilot on identifying common reporting elements as well as duplicative or burdensome reporting requirements; the pilot was divided into two tracks, focused on procurement and financial assistance (grants). The report provides an overview of the pilot programs, including national outreach conducted, test models utilized, lessons learned and recommendations made.
HHS Proposes Delay to Drug Pricing Rule
The Department of Health and Human Services (HHS) released a proposed rule to solicit comments on delaying the effective date of the January 5, 2017 final rule that sets the ceiling price for drugs available under the 340B discount drug program. HHS proposes to delay the effective date to July 1, 2018 in order to “allow a more deliberate process of considering alternative and supplemental regulatory provisions and to allow for sufficient time for additional rulemaking.” The original effective date was March 6, 2017 but this was delayed to March 21, then delayed again to May 22 and October 1. HHS is now proposing to further delay the effective date and it intends to engage in additional rulemaking on these issues. The 340B program outlines how manufacturers that receive Medicaid reimbursements must provide drugs at a discount to providers like HIV/AIDS clinics, children’s hospitals, and other groups that serve disadvantaged groups. Ceiling prices for drugs are based on the difference between the average manufacturing price and the amount of rebate per unit.
Interior Awards $25 Million in Historic Preservation Grants to States and Tribes
On Thursday the Department of the Interior announced the distribution of an additional $21 million in historic preservation grants to every state, D.C. and U.S. territories as well as $4.6 million for 169 Tribal Historic Preservation Offices. Earlier this year $32.6 million was awarded for a total of $58 million to support preservation efforts of the states and tribes. Administered by the National Park Service, these funds are appropriated annually by Congress from the Historic Preservation Fund; the fund supports preservation programs at State Historic Preservation Offices and requires a 10 percent pass-through to local governments. All funds to the states and D.C. require a 40 percent non-federal match while tribal grants do not require a match. A listing of individual award amounts is included in the announcement.
CDC Report Highlights Increase in Adolescent Drug Overdose Deaths
The Centers for Disease Control and Prevention (CDC) released a new data brief showing the death rate due to drug overdose among adolescents aged 15-19 more than doubled from 1999 to 2007, declined by 26 percent from 2007 to 2014, and then increased in 2015. Death rates for drug overdoses among this age group in 2015 were highest for opioids, specifically heroin. For males, drug overdose death rates nearly tripled between 1999 and 2007, fell by about one-third through 2014, and then increased 15 percent in 2015. For females, death rates nearly doubled between 1999 and 2004, but were generally stable for 2004-2013, before increasing 35 percent between 2013 and 2015. The drug overdose death rate for males was consistently higher than the rate for females during the 1999-2015 period and was 70 percent higher in 2015.
Recently Released Reports
Economic Development Administration 2016 Annual Report, U.S. Economic Development Administration
2016 EAC Grants Expenditure Report Highlights, U.S. Election Assistance Commission
State Liquor Tax Rates Are Stuck in the Mud, Tax Policy Center
Medicaid Enrollees and Work Requirements: Lessons From the TANF Experience, Kaiser Family Foundation
National Center for Education Statistics
Characteristics of Public Elementary and Secondary School Principals in the U.S.
Characteristics of Public Elementary and Secondary School Teachers in the U.S.
Economic News
Unemployment Rates Stable in 46 States in July
New data from the Bureau of Labor Statistics shows that most state unemployment rates saw little change in July; 46 states and the District of Columbia had stable unemployment rates, 3 states had higher rates and 1 state had a lower rate. Compared to one year earlier, 23 states and the District of Columbia had little or no change, while 27 states had unemployment rate decreases. The national jobless rate, 4.3 percent, was little changed from June but was 0.6 percentage point lower than in July 2016. Nonfarm payroll employment decreased in 1 state in July, increased in 11 states and the District of Columbia and was essentially unchanged in 38 states. Over the year, 29 states and the District of Columbia added nonfarm payroll jobs and 21 states were essentially unchanged.
Household Debt Increases in Second Quarter, Higher than 2008 Peak
A newly released quarterly study from the Federal Reserve Bank of New York found that aggregate household debt balances increased in the second quarter of 2017, for the 12th consecutive quarter, and are now $164 billion higher than the previous (2008Q3) peak of $12.68 trillion. As of June 30, 2017, total household indebtedness was $12.84 trillion, a $114 billion (0.9 percent) increase from the first quarter of 2017. Overall household debt is now 15.1 percent above the 2013Q2 trough. Mortgage balances, the largest component of household debt, increased $64 billion from the first quarter of 2017 while new extensions of credit moderated in the second quarter. Auto loans grew by $23 billion and credit card balances increased by $20 billion, while student loan balances were roughly flat.