Senators Introduce Bill to Repeal and Replace Parts of ACA, Reform Medicaid
Last week, Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV), and Ron Johnson (R-WI) introduced legislation that would repeal and replace parts of the Affordable Care Act (ACA) with block grants to states. The senators released a section-by-section analysis providing a description of the major components of the bill. The grants to states would replace the federal money currently being spent on the Medicaid expansion, tax credits, cost sharing reductions, and basic health program dollars. Beginning in 2020, a formula would determine the exact allocation to each state. The Senate parliamentarian ruled that the fiscal 2017 reconciliation instructions used by Republicans in their efforts to partially repeal the Affordable Care Act will expire September 30, 2017. Under reconciliation, just 51 Senate votes (or 50 plus a tiebreaker from the Vice President) are needed for passage of legislation instead of the normal 60 votes necessary to overcome a filibuster. The Congressional Budget Office is working on a cost estimate of the proposed legislation. Fitch Ratings released a statement on Friday regarding the bill’s potential impacts to states.
This Week on the Hill
The House is on recess this week, while the Senate convenes for a short workweek ending Wednesday. Later today, the Senate is expected to vote on the annual National Defense Authorization Act (NDAA) for fiscal 2018 (HR 2810). The Senate Finance Committee will hold a hearing on Tuesday on business tax reform and the Senate Committee on Aging will hold a hearing Wednesday on disaster preparedness and responding to the elderly, while several other committees have scheduled hearings to consider various nominations. Meanwhile, the Senate currently faces looming deadlines to address several major health care policy issues. Funding for the Children’s Health Insurance Program (CHIP) expires on September 30, and while the Senate Finance Committee announced a five-year agreement on CHIP last week, no bill text has been released yet. See story below for more details. As discussed above, Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA) are racing to obtain the necessary 50 votes to back their bill to repeal and replace parts the Affordable Care Act, also with a September 30 deadline. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) also continue working this week to reach a compromise to stabilize the individual health insurance market, with a deadline of September 27.
Senate Finance Committee Seeking to Extend CHIP for Five Years
The Senate Finance Committee announced last week that it would be seeking a five-year bipartisan extension of the Children’s Health Insurance Program (CHIP), as funding for the program is currently set to expire on September 30, 2017. The proposal would retain the 23-percentage point enhanced matching rate through 2019 and then decrease the enhanced match to 11.5 percent in 2020 and return to pre-Affordable Care Act rates by 2021. The full language for the legislation has not yet been released. The House has not reached its own deal on CHIP, and it is unclear whether the chamber would accept the Senate’s proposal. An issue brief from the Kaiser Family Foundation looks at the current status of state planning for the future of the CHIP and how states and children would be affected if Congress does not extend funding by the September 30, 2017 deadline.
South Dakota Court Ruling May Bring Online Sales Tax Issue Before U.S. Supreme Court
Last week, the South Dakota Supreme Court struck down a 2016 state law requiring out-of-state retailers to collect and remit sales taxes. The South Dakota law was designed to challenge U.S. Supreme court decisions going back to 1967 that interpret the U.S. Constitution’s Commerce Clause to prohibit states from requiring online sellers and other remote sellers without a physical presence to collect and remit sales taxes. The state hoped for this opinion, which now allows South Dakota to seek appeal to the U.S. Supreme Court in a case that has national implications for online commerce. The State and Local Legal Center (SLLC) is expected to file an amicus brief urging the Court to accept the State of South Dakota v. Wayfair, Inc., Overstock.com, and Newegg Inc. case this term, which begins next month. According to reports, at least two Supreme Court justices have indicated a willingness to reexamine the issue. Lisa Soronen, Executive Director of the SLLC, will deliver an update on this case and others impacting states at NASBO’s Fall Meeting on October 6 in Alexandria, VA.
Fiscal Year 2018 Budget Update
On Thursday the House voted 211-198 to pass the $1.23 trillion omnibus spending package for fiscal year 2018. The bill would appropriate $621.5 billion for defense and $511 billion for nondefense discretionary spending, including $1.6 billion for a southern border wall; the amount approved for defense spending exceeds the current law spending cap of $549.1 billion. The legislation (H.R. 3354) combines the “security” minibus passed in July with the eight-bill omnibus that lawmakers worked on the last two weeks, to cover all twelve appropriations bills. The package now moves to the Senate, where it is not expected to pass due to objections from Democrats over spending levels and policy riders. The government is currently operating under a continuing resolution that expires on December 8.
Tax Reform Framework Expected Week of September 25
Last week House Ways and Means Committee Chairman Kevin Brady (R-TX) announced the release of a consensus tax-reform framework the week of September 25. Following the release of the framework, the House and Senate would aim to approve a final budget resolution by mid-October, which is expected to include the instructions needed to use the “reconciliation” process that allows just 51 votes for approval of a bill (compared to the normal 60 votes to avoid a filibuster). It is expected that after passage of the budget resolution, Chairman Brady will release a first draft of the tax reform plan, which would be marked up by the Ways and Means Committee before advancing to the full House, followed by Senate consideration. This anticipated timeline could shift, as Congress will also need to approve fiscal year 2018 appropriations before the current continuing resolution (CR) expires on December 8.
Medicare For All Proposal Introduced in Senate
Senator Bernie Sanders (I-VT) introduced his Medicare For All bill that would establish a national health insurance program called the Universal Medicare Program. The proposal would eliminate premiums, copays, and deductibles for health care consumers. The legislation allows Americans under 18 to be immediately covered, while non-Medicare eligible adults would be phased into the program over four years. The bill would also expand Medicare coverage to include dental care, vision care, and hearing aids. Senator Sanders also released various options that may be used to finance the bill.
Federal Judge Halts Justice Department’s Withholding of Funds from Sanctuary Cities
On Friday, a U.S. District Court Judge issued a temporary injunction in a lawsuit filed by the city of Chicago, preventing the U.S. Department of Justice for the time being from withholding grant funding from Chicago and other so-called sanctuary cities across the nation that do not comply with new federal immigration enforcement requirements until a final ruling on the case. The judge’s decision was based on the opinion that Chicago is likely to win its lawsuit. The ruling follows a decision by another federal judge in California in April that halted the Trump administration from enforcing an executive order threatening funding for sanctuary cities.
Administration Announces Self-Driving Car Framework
On Tuesday, Secretary of Transportation Elaine Chao unveiled an updated policy framework on Automated Driving Systems (ADSs), which replaces the Federal Automated Vehicle Policy released in 2016. The policy framework is divided into two sections, addressing the automotive industry in Section 1 (Voluntary Guidance for Automated Driving Systems) and states in Section 2 (Technical Assistance to States, Best Practices for Legislatures Regarding Automated Driving Systems). The latter section clarifies and delineates federal and state roles in the regulation of ADSs; the federal government remains responsible for regulating the safety design and performance aspects of motor vehicles and related equipment, while states continue to be responsible for regulating the human driver and vehicle operations.
House Committee Advances Home Visiting Bill That Requires New State Match
On Wednesday, the House Ways and Means Committee approved by a vote of 22-15 H.R. 2824, the Increasing Opportunity and Success for Children and Parents through Evidence-Based Home Visiting Act, which reauthorizes the Maternal, Infant and Early Childhood Home Visiting Program. The bill extends the program, whose authorization ends September 30, while making changes including: allows grants to be used for “pay for outcomes” programs; and adds a state matching requirement for program activities that would begin at 30 percent in fiscal year 2020, increase to 40 percent in fiscal year 2021 and reach 50 percent in fiscal year 2022. The costs of the bill were offset by passage of H.R. 2792, which prohibits individuals with outstanding arrest warrants for a felony or parole violation from receiving monthly Supplemental Security Income (SSI) payments.
Administration Releases Final Rule on FirstNet Fee Reviews
Last month the National Telecommunications and Information Administration (NTIA) in the U.S. Department of Commerce released a final rule on the scope of NTIA’s authority regarding FirstNet fees. Under the act that created FirstNet, a provision also directed NTIA to review and approve fees levied by FirstNet on an annual basis, to determine if they are reasonable. Under the law, FirstNet may assess three fees: network user fees, lease fees related to network capacity; and fees from entities seeking to access or use any equipment or infrastructure owned by FirstNet. The final rule lays out the review process that will be used by NTIA to review the fees, to ensure the fees collected plus any non-fee income do not exceed the necessary costs of administering the nationwide public safety broadband system. More information on FirstNet, including a map of states that have opted-in to the system, can be found here.
Recently Released Reports
State Innovations for Near-Completers
Education Commission of the States
The Affordability of MyPlate: An Analysis of SNAP Benefits and the Actual Cost of Eating According to the Dietary Guidelines
Journal of Nutrition Education and Behavior
Signs of Digital Distress: Mapping Broadband Availability and Subscription in American Neighborhoods
Brookings Institution
Increasing the Child Tax Credit for Young Children
Tax Policy Center
Medicaid Managed Care: CMS Should Improve Oversight of Access and Quality in States' Long-Term Services and Supports Programs
U.S. Government Accountability Office
Like Other ACA Repeal Bills, Cassidy-Graham Plan Would Add Millions to Uninsured, Destabilize Individual Market
Center on Budget and Policy Priorities
Economic News
New Census Bureau Report Shows Median Household Income Increased 3.2 Percent
Last week the Census Bureau released its data on income, poverty and health insurance coverage in the United States for 2016. The data shows that real median household income increased by 3.2 percent between 2015 and 2016, while the official poverty rate decreased 0.8 percentage points. At the same time, the percentage of people without health insurance coverage decreased from 9.1 percent to 8.8 percent. Households in the South and West experienced an increase in real median income of 3.9 percent and 3.3 percent, respectively, between 2015 and 2016; the changes in incomes of households in the Northeast and Midwest were not statistically significant.
On Thursday, the Census Bureau released the 2016 single-year estimates of median household income, poverty and health insurance for all states, counties, places and other geographic units with populations of 65,000 or more from the American Community Survey.
Job Openings See Little Change in July
The number of job openings was little changed at 6.2 million on the last business day of July, according to data recently released by the U.S. Department of Labor (up from 6.1 million in June). Job openings increased in July for other services (+111,000), transportation, warehousing and utilities (+70,000), and educational services (+26,000) but decreased in health care and social assistance (-72,000), state and local government, excluding education (-46,000), and federal government (-21,000). The number of hires was little changed at 5.5 million in July and the hires rate was little changed at 3.8 percent. The number of separations was little changed at 5.3 million. The 3.2 million quits reported in July were up slightly from 3.1 million in June; many economists closely watch the number of quits as a measure of employee confidence in finding another job. Finally, layoffs and discharges were little changed at 1.8 million. Over the 12 months ending in July, hires totaled 63.6 million and separations totaled 61.5 million, yielding a net employment gain of 2.1 million.