This Week on the Hill
The House and Senate are both in session this week and the focus will continue to be on tax policy.
The House convenes today and will consider five bills under suspension of the rules related to veterans. On Tuesday the House will consider 11 bills under suspension of the rules, with several related to veterans, and will also consider H.R. 3441, which modifies the statutory definition of joint employer to clarify that an employer must have actual, direct and immediate control over employees to be considered a joint employer. For Wednesday and Thursday, the House will consider two bills, and is also expected to vote on H.R. 2874, which would reauthorize the National Flood Insurance Program for five years. Several committees have hearings this week: the Education and the Workforce Committee will hold a hearing Wednesday on how opioids are impacting communities; and the Natural Resources Committee will hold a hearing on challenges with Puerto Rico’s recovery.
The Senate convenes today and will resume consideration of nominations. Several committees scheduled hearings this week, with several focused on nominations: the Commerce, Science and Transportation Committee will hold a hearing Tuesday on the internet of things in rural America; and the Judiciary Committee will hold a hearing Wednesday on small businesses and lawsuits.
House Republicans Release Tax Policy Legislation, Markup Begins Today
Last week the House Ways and Means Committee released its tax policy legislation (H.R. 1) and the committee begins a markup of the bill today. The bill results in a 10-year revenue loss of $1.5 trillion while also eliminating several deductions and credits. On Friday, the committee released the chairman’s mark of the bill, which will be considered at the committee markup. According to media reports, House Republicans are also studying the possibility of adding a repeal of the individual mandate for health care to the bill, as promoted by the President. Below are links to pertinent analyses and background documents regarding the legislation. As noted above, the committee begins the markup today and is expected to continue through Thursday. House Speaker Paul Ryan (R-WI) has stated a goal of passing the bill on the House floor prior to Thanksgiving. Also, the Senate Finance Committee is expected to release their version of a tax bill this week.
House Approves CHIP Funding Bill
On Friday the House voted 242-174 to approve legislation (H.R. 3922) that renews funding for the Children’s Health Insurance Program (CHIP), community health centers and other public health programs. Democrats were opposed to offsets identified to pay for the bill, including cutting $6.35 billion over 10 years from the Prevention and Public Health Fund, increasing premiums for Medicare beneficiaries earning over $500,000 a year, and limiting benefits for lottery winners who qualify for Medicaid. The bill extends CHIP funding for five years; maintains the 23 percentage point funding bump for the first two years, then lowers the amount to 11.5 percent and zeroes it out for the final two years; and retains existing maintenance-of-effort requirements. The Senate bill (S. 1827) has similar policy provisions but does not identify offsets; a comparison of the House and Senate bills compiled last month can be found here. A more detailed analysis on the funding aspects of the House bill, from the Committee for a Responsible Federal Budget, can be found here. The Senate has not scheduled a vote on the CHIP funding bill at this time.
CMS Releases Proposed Rule on Health Insurance Exchanges for 2019
The Centers for Medicare and Medicaid Services (CMS) released the Notice of Benefit and Payment Parameters for 2019, a proposed rule affecting the operation of health insurance exchanges that would take place in 2019. The proposed rule would provide more state flexibility on certain aspects of the Affordable Care Act, such as definition of essential health benefits, how much insurers spend on medical claims, and the certification of health plans. Comments are due by November 27, 2017.
Administration to Appeal Ruling on Overtime Rule
The Department of Labor announced plans regarding overtime regulations, after the Obama administration’s overtime rule was struck down by the courts. The original rule, which was supposed to take effect on December 1, 2016, would have doubled the salary cap - from $23,660 to $47,476 – that determines which workers would be eligible for overtime pay. On August 31, 2017, a U.S. District Court Judge granted summary judgement against the Department of Labor in consolidated cases challenging the final rule, finding that the rule’s salary level exceeded the department’s authority. On October 30, 2017, the Department of Justice filed a notice to appeal this decision on behalf of Labor to the U.S. Court of Appeals. The Department of Labor is currently reviewing submissions gathered under a Request for Information published in July, asking for public input on what changes to overtime regulations the department should propose; an appeal will allow the department more flexibility to rewrite the overtime rule.
Opioid Commission Releases Final Report, CMS Announces Medicaid Demonstrations
Last week the President’s Commission on Combating Drug Addiction and the Opioid Crisis released their final report, which included 56 recommendations covering prescribing practices, prevention, treatment, law enforcement tactics, and funding mechanisms. One recommendation is to block grant federal funding for opioid-related and substance use disorders-related activities to the states, noting this was a request to the Commission by nearly every Governor. However, the report did not identify a total amount of funding that would be necessary to address the opioid crisis. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) sent a letter to state Medicaid directors announcing a new policy to allow states to design demonstration projects that increase access to treatment for opioid use disorder and other substance use disorders under Section 1115 Medicaid demonstrations. According to CMS, under this updated policy, states will be able to pay for a fuller continuum of care to treat substance use disorders, including critical treatment in residential treatment facilities that Medicaid is unable to pay for without a waiver.
Treasury Issues New Report on Debt Ceiling Timeline
The Treasury Department issued a report last Wednesday indicating a timeline for increasing the statutory debt limit. The continuing resolution (P.L. 115-56) that funded the government through December 8 also suspended the debt limit through that date. On December 9, the debt limit will be reinstated at the amount of borrowing which had occurred prior to that date. Treasury noted that if no other actions are taken, the department can take certain extraordinary measures to continue to finance the government on a temporary basis, through January 2018.
House Passes Forest Management and Wildfire Bill
Last week the House voted 232-188 to approve H.R. 2936, the Resilient Federal Forests Act of 2017. The bill makes changes both to funding of wildfire suppression efforts and forest management. First, the bill would change the way wildfire fighting efforts are funded by ending a process called fire borrowing (when the Forest Service exhausts funding, it must use money allocated for fire prevention and other programs) and instead allowing federal agencies to tap into disaster funds from FEMA when wildfire suppression budgets have been exhausted. On the management side, the bill expedites environmental reviews for projects to mitigate fire risk, such as downed tree removal and thinning after disasters or disease outbreaks. Critics of the bill are concerned with a possible weakening of the National Environmental Policy Act’s and Endangered Species Act’s protections. The administration issued a Statement of Administration Policy noting concerns about access to disaster funds, which could force competition for funding between wildfires and other disasters, including hurricanes.
Oversight Hearing Held on FirstNet Implementation
On Wednesday the House Energy and Commerce Subcommittee on Communications and Technology held a hearing on the oversight of the First Responder Network Authority (FirstNet), featuring state perspectives. Witnesses included state officials from Virginia and New Hampshire, representatives from FirstNet and their partner AT&T, and an organization that helps state and local governments prepare to deploy public safety broadband communications. Several committee members expressed the importance of a national, interoperable network for first responders in light of recent natural disasters. FirstNet delivered official state plans to governors on September 29 and governors have until December 28 to choose to either opt-in or opt-out of the FirstNet network. As this time, 31 states and territories have opted-in to the network, and 18 states have issued requests for proposals to build and maintain networks from vendors other than FirstNet. Witness testimony and background information from the committee hearing, as well as a video recording, can be found here.
Department of Education Releases Tool Kit on Pay for Success Programs
The Department of Education recently released the Pay for Success Feasibility Tool Kit: Considerations for State and Local Leaders. Commonly, Pay for Success is an approach where a state or local governmental entity uses evidence-based approaches to address a public policy challenge by leveraging private investment, typically using government funds to pay only when certain, measurable outcomes are achieved. This tool kit is an introductory guide for state and local governments and other stakeholders interested in exploring the possibility of a Pay for Success project for education or related societal issues. Additional information on the department’s Pay for Success initiative can be found here.
Recently Released Reports
Policy Snapshot: Attainment Goals and Plans
Education Commission of the States
Persistent Gaps: State Child Care Assistance Policies 2017
National Women’s Law Center
How Have Providers Responded to the Increased Demand for Health Care Under the Affordable Care Act?
Urban Institute
Characteristics and Financial Circumstances of TANF Recipients, Fiscal Year 2016
Administration for Children and Families, Office of Family Assistance
Economic News
Economy Adds 261,000 Jobs in October
New data released last week by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 261,000 in October and the unemployment rate edged down to 4.1 percent (compared to 4.2 percent the previous month). Many economists had projected gains around 300,000. The data also shows that in October there were 6.5 million unemployed persons, down from 6.8 million in September. The number of long-term unemployed (jobless for 27 weeks or more) was little changed at 1.6 million, accounting for 24.8 percent of the total unemployed. The labor force participation rate decreased by 0.4 percentage point to 62.7 percent. In October, job gains occurred in food services and drinking places (89,000) after falling sharply in September due to the hurricanes, health care (22,000), professional and business services (50,000) and manufacturing (24,000). Employment saw little change for mining, construction, wholesale trade, retail trade, financial activities, government, transportation and warehousing, and information. The average hourly earnings for all employees, at $26.53, were little changed in October (-1 cent), following an increase of 12 cents in September. Over the year, average hourly earnings have risen by 2.4 percent.
Federal Reserve Holds Interest Rates Steady for Now; President Nominates New Fed Chair
At its November meeting, the Federal Open Market Committee voted 9-0 to maintain the target range for the federal funds rate at 1.00 to 1.25 percent. The committee noted information received since the September meeting indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate despite hurricane-related disruptions. Although the hurricanes caused a drop in payroll employment in September, the unemployment rate declined further. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term. Looking at future possible adjustments, the statement says that “the Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”
On Thursday, President Trump nominated Jerome Powell to be Chairman of the Board of Governors of the Federal Reserve System for a term of four years beginning February 3, 2018 (when current Chair Janet Yellen’s term ends). Powell has been a member of the Board of Governors since May 2012 and previously served as Under Secretary at the Treasury Department under President George H.W. Bush. This nomination is subject to approval by the Senate.