This Week on the Hill
The Senate is in session this week while the House is on recess, returning October 23.
The Senate convenes today and will consider the nomination of Callista Gingrich as ambassador to the Vatican. For the remainder of the week, the Senate is expected to consider its fiscal year 2018 budget resolution (see story below) followed by the disaster supplemental funding bill. Several committees have scheduled hearings this week: the Health, Education, Labor and Pensions Committee will hold a hearing Tuesday on the cost of prescription drugs; the Banking, Housing, and Urban Affairs Committee will hold a hearing Tuesday on consumer data security and credit bureaus; and several committees will hold nomination hearings.
President Ends Cost-Sharing Subsidies Under the ACA
Last week the administration announced the immediate discontinuation of cost-sharing reduction payments under the Affordable Care Act (ACA). The announcement indicates the decision was based on a legal review by the Department of Health and Human Services, Treasury Department and Office of Management and Budget, as well as an opinion from the Attorney General. The subsidies help people who make less than 250 percent of the federal poverty limit afford certain out-of-pocket payments, and are worth an estimated $7 billion this year. On Friday a multi-state lawsuit was announced to stop the president from halting the payments, with 18 states and the District of Columbia joining. The National Governors Association released a statement supporting continued payment of the cost-sharing reduction payments. The Congressional Budget Office released a report in August on the effect of terminating the payments for cost-sharing reductions, which can be found here.
Executive Order on Health Care Released
The President issued an executive order last week to broaden the development of business association health plans, ease restrictions on short-term medical insurance and expand employer health care reimbursement accounts. The order directs the Departments of the Treasury, Labor, and Health and Human Services to consider expanding coverage through low-cost short-term limited duration insurance and directs the Secretary of Labor to consider expanding access to association health plans which could potentially allow American employers to form groups across state lines. According to the executive order, employers participating in an association health plan cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions of individual employees. A broader interpretation of the Employee Retirement Income Security Act (ERISA) could potentially allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees. The policy changes in the executive order will require agencies to follow established procedures to write new rules and solicit public comment, which could take several months. The American Academy of Actuaries prepared an issue brief on association health plans and the National Academy for State Health policy released an issue brief looking at issues related to selling health insurance across state lines.
Fiscal Year 2018 Budget Update
After the House passed its version of a fiscal year 2018 budget resolution (H Con Res 71) on October 5, the Senate is now scheduled to consider their budget resolution this week. The Senate resolution aims to reduce spending by $5.1 trillion while authorizing a $1.5 trillion increase in debt over 10 years to make room for tax cuts while calling for $1 billion in deficit reduction. Consideration on the floor is expected to begin on Tuesday, with 50 hours of debate followed by a marathon process of amendments known as a “vote-a-rama.” The budget resolution only needs a majority to pass, unlike the 60 votes needed for most legislation. Once the resolution passes the Senate, both chambers need to reconcile differences between their versions in order to begin the reconciliation process to consider tax policy changes. Also this week, the Senate Appropriations Committee is scheduled to consider two budget bills this week: Interior-Environment and Homeland Security. The bills will have a markup by the subcommittees on Tuesday and then receive full committee consideration on Thursday.
Administration Begins Work to Rescind the Clean Power Plan
Last Tuesday the Environmental Protection Agency (EPA) began the process to repeal the Obama administration’s regulation on power plant emissions known as the Clean Power Plan. Finalized in 2015, the rule aimed to reduce carbon pollution from existing power plants by 32 percent by 2030. However, the rule never took effect as final implementation was stayed in court after several states filed lawsuits. As part of the repeal process, the EPA issued a notice of proposed rulemaking, which will be open to public comment through December 15. The proposed rule would repeal the Clean Power Plan but does not offer a replacement regulation at this time. The agency also released a fact sheet and regulatory analysis on the repeal actions.
House Passes Disaster Supplemental Bill
On Thursday the House voted 353-69 to approve a supplemental disaster spending bill that provides $36.5 billion for the ongoing hurricane and wildfire efforts. This follows action last month to provide an initial $15.25 billion for the hurricane relief effort. The bill provides the following: $18.67 billion for the FEMA Disaster Relief Fund, of which up to $4.9 billion may be transferred to the Community Disaster Loan Program for direct loans to assist local governments; $16 billion in debt relief for the National Flood Insurance Program; and $576.5 million to the Forest Service for wildfire suppression activities. The bill also designates the funds as emergency requirements, which exempts it from discretionary spending limits. The Senate is expected to vote on the bill this week.
House Continues Negotiations on CHIP Reauthorization
On October 11, House Energy and Commerce Committee Chairman Greg Walden (R-OR) announced that at the request of Democrats, the committee decided to delay floor consideration of the bill reported last week from the Energy and Commerce Committee in the hopes of reaching a bipartisan agreement on offsets. The House is now expecting to consider CHIP after they return from recess next week. The bill (H.R. 3921) passed the committee on a party-line vote of 28-23 over disagreement on the offsets used to pay for the bill.
West Virginia Receives Section 1115 Approval to Expand Substance Abuse Treatment Coverage
On October 6 the U.S. Department of Health and Human Services (HHS) approved West Virginia’s new five-year section 1115 demonstration for creating a continuum of care for Medicaid enrollees with substance use disorders. The approval authorizes West Virginia to expand substance use disorder coverage and to introduce new programs to improve the quality of care. The state will be able to expand its benefits package to cover the full continuum of substance use disorder treatment, including methadone treatment services, peer recovery support services, withdrawal management services and short-term residential services to all Medicaid enrollees. The approval period runs from January 1, 2018 through December 31, 2022 and the federal government will fund 80 percent of waiver expenses.
Bill to Rein in Antiquities Act Passes House Committee
Last Wednesday the House Natural Resources Committee voted 23-17 on a bill (H.R. 3990) that amends the Antiquities Act of 1906. The bill, introduced by Rep. Rob Bishop (R-UT), would allow the president flexibility in establishing monuments of up to 640 acres, while prohibiting any designations less than 50 miles away from another monument. Also, monuments between 640 acres and 10,000 acres would require environmental reviews under the National Environmental Policy Act. Monuments between 10,000 acres and 85,000 acres would require the approval of all county commissioners, state legislatures, and governors impacted by the national monument. The bill is now available for scheduling on the House floor. A fact sheet can be found here and information from the markup can be found here.
Grants to Study Transportation Funding Alternatives Awarded to Six States
On Friday the U.S. Department of Transportation Federal Highway Administration announced $15.5 million in Surface Transportation System Funding Alternatives grants to six states that are exploring new ways to fund highway and bridge projects. These grants fund projects to test the design, implementation, and acceptance of user-based alternative revenue tools. Seven proposals were selected from six states: California, Colorado, Delaware, Missouri, Washington and Oregon. The projects will evaluate various user-based approaches to raising revenue, including charging drivers based on miles traveled. The grant program was established under the Fixing America’s Surface Transportation (FAST) Act.
DOJ Makes Awards to States for Child Safety and Forensic Science
The U.S. Department of Justice recently awarded two grants to states with a focus on protecting children and boosting forensic science. The first grant, from the Office of Justice Programs, awards $82.6 million in fiscal year 2017 to support state, local and tribal jurisdictions’ efforts to protect children and respond to juvenile victimization. Grants were made to support missing and exploited children programs and services ($34.4 million), combat and prevent internet crimes against children ($27.6 million), provide services for victims of child abuse ($19.5 million), and support communities’ response to youth sexual misconduct ($1.1 million). A fact sheet on the grants can be found here. The second grant, from the National Institute of Justice, awards more than $119 million to fund crime laboratories and advance forensic science. Funds were awarded to address DNA backlogs, forensic science improvement, post-conviction DNA testing, identifying missing persons, and establishing a forensic technology center of excellence. The full release, with links to awardees, can be found here.
New Notice of Funding Opportunity for Public Health Emergencies Released
The Centers for Disease Control and Prevention (CDC) released a Notice of Funding Opportunity (NOFO) last week aiming to accelerate the dissemination of funding during public health emergencies. The funding is intended to establish a roster of public health departments that would be pre-identified and pre-approved for rapid funding by CDC for public health emergencies; it would establish an Approved-But-Unfunded list of grantees. Any funding tied to this funding opportunity will only be made available once CDC has determined a public health emergency exists or is considered imminent. Eligible applicants include the 50 states, five U.S. territories, up to five federally recognized tribal governments, and six localities: Chicago, Houston, Los Angeles County, New York City, Philadelphia, and Washington, D.C. Applications are due December 11.
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Economic News
Job Openings Little Changed at 6.1 Million in August
The number of job openings was little changed at 6.1 million on the last business day of August, according to data recently released by the U.S. Department of Labor (down from 6.2 million in July). Job openings increased in August for health care and social assistance (+71,000) and durable goods manufacturing (+31,000) but decreased in other services (-95,000), educational services (-51,000), and nondurable goods manufacturing (-48,000). The number of hires was little changed at 5.4 million in August and the hires rate was unchanged at 3.7 percent. The number of separations was little changed at 5.2 million. The 3.1 million quits reported in August were down slightly from 3.2 million in July; 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 1.7 million. Over the 12 months ending in August, hires totaled 63.8 million and separations totaled 61.7 million, yielding a net employment gain of 2.1 million.
Consumer Price Index Increased in September as Real Hourly Earnings Declined
The U.S. Bureau of Labor Statistics released new data on the Consumer Price Index for All Urban Consumers (CPI-U) for September 2017, showing the CPI-U increased 0.5 percent on a seasonally adjusted basis. Over the last twelve months, the all items index increased 2.2 percent. The index for all items less food and energy rose 0.1 percent in September, while the energy index rose 6.1 percent, due mainly to a 13.1 percent increase in the gasoline index. The all items index rose 2.2 percent for the 12 months ending September; the 12-month change has been accelerating since it was 1.6 percent in June. The 12-month change in the index for all items less food and energy remained at 1.7 percent for the fifth month in a row. Meanwhile, real average hourly earnings for all employees decreased 0.1 percent from August to September, seasonally adjusted. This result stems from a 0.5 percent increase in average hourly earnings being offset by a 0.5 percent increase in the CPI-U. Real average hourly earnings increased 0.7 percent, seasonally adjusted, from September 2016 to September 2017.