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December 18, 2017 - Washington Report

By Leah Wavrunek posted 12-18-2017 04:07 PM

  

This Week on the Hill

The House and Senate are both in session this week, with a pending vote on tax policy legislation expected and action needed to fund the government after Friday.

The House convenes today and will consider eight bills under suspension of the rules including H.R. 4375, the STEM Research and Education Effectiveness and Transparency Act. For Tuesday and the balance of the week, the House will consider the Tax Cuts and Jobs Act (H.R. 1), the continuing resolution to fund the government for fiscal year 2018 (H J Res 124), and other bills as listed. After this week, the House is scheduled to be on recess until January 3.

The Senate convenes today to resume consideration of nominations for the Department of Housing and Urban Development and the Department of Defense. The Senate is also expected to vote on the tax bill once action in the House is completed, and will also consider the fiscal year 2018 continuing resolution. After this week, the Senate is also scheduled to be on recess until January 3.

 

Congress Expected to Vote on Tax Bill This Week

House and Senate Republican conferees released a final tax policy plan on Friday, and votes are expected to take place early this week with the House acting first on Tuesday. According to a new score from the Congressional Budget Office, enacting the bill would reduce revenues by about $1.65 trillion and decrease outlays by about $194 billion between 2018 and 2027, leading to an increase in the deficit of $1.46 trillion over the next ten years. Major provisions of the conference report are as follows: includes a $10,000 cap on the deduction for state and local property taxes and income or sales taxes; maintains the tax exemption for private activity bonds; repeals advance refunding of bonds; reduces the corporate tax rate from 35 percent to 21 percent beginning in 2018; reduces individual tax rates while maintaining seven brackets; opens up parts of Alaska to oil drilling; repeals the Affordable Care Act’s individual mandate in 2019; repeals the alternative minimum tax (AMT) for corporations while maintaining the individual AMT with broader exemptions; includes a 20 percent deduction for taxes on “pass-through” business income; and maintains the mortgage interest deduction for mortgages up to $750,000 for new purchases. The policy highlights can be found here and an estimated budgetary impact table from the Joint Committee on Taxation can be found here. The full legislative text includes a joint explanatory statement, which provides a summary of major provisions of the conference report.

 

House Introduces Stopgap Spending Bill with Five-Year CHIP Extension

House lawmakers unveiled the text of the next temporary spending bill (H J Res 124) last week, with the current continuing resolution (CR), P.L. 115-90, set to expire on Friday. The package includes a five-year extension of funding for the Children’s Health Insurance Program (CHIP) and a two-year extension of the Community Health Centers program, identical to the bill passed by the House earlier this fall (HR 3922), with controversial offsets that are likely to continue to be opposed by Democrats. The spending bill would extend fiscal 2018 federal appropriations for non-defense spending through January 19, 2018, while providing full-year appropriations for defense programs above current-law spending caps, an approach also likely to face opposition from Democrats. The House is expected to take up the bill this week and send it to the Senate, where it is unlikely to pass in its current form; to garner Democratic votes, the Senate is expected to remove the full-year spending provision for defense programs and may add supplemental funds for disaster recovery. The timing of passage and final policy provisions remain uncertain at this time.

 

FCC Votes to Revoke Net Neutrality Rules

On Thursday the Federal Communications Commission (FCC) voted 3-2 along party lines to revoke the net neutrality rules adopted in 2015 for internet service providers. The vote adopts the following changes: restores the classification of broadband Internet access service as an “information service” under Title I of the Communications Act; restores broadband consumer protection authority to the Federal Trade Commission (FTC); and requires that internet service providers disclose information about their practices to consumers, entrepreneurs, and the FCC, including any blocking, throttling, paid prioritization, or affiliated prioritization. The order includes a section entitled “Preemption of Inconsistent State and Local Regulations” that preempts any state or local measures that would impose rules or requirements the FCC repealed or decided to refrain from imposing. The item takes effect upon approval by the Office of Management and Budget of the new transparency rule that requires the collection of additional information from industry. Earlier in the week, the FCC and FTC announced their intent to enter into a Memorandum of Understanding for the two agencies to coordinate online consumer protection efforts of the changes.

 

House Republicans Release Bills to Delay Health Insurance Taxes

Last Tuesday House Republicans on the Ways and Means Committee introduced five bills that target health related taxes levied under the Affordable Care Act. The bills would do the following: H.R. 4617 repeals the medical device tax for five years; H.R. 4618 eliminates the health savings account (HSA) restrictions on over-the-counter purchases for two years; H.R. 4620 repeals the health insurance tax for 2018 through rebates to consumers and then directly to all plans in 2019; H.R. 4619 repeals the health insurance tax for all plans in Puerto Rico for two years; and H.R. 4616 delays the “Cadillac Tax” on high-cost employer health plans for one year. At this time no committee action has been scheduled on the bills and the bills do not affect treatment of the individual mandate for health care, which is addressed in the tax bill recently finalized in the House and Senate.

 

House Committee Advances Higher Education Act Reauthorization Bill

The House Committee on Education and the Workforce voted 23-17 on a party-line vote Wednesday to advance H.R. 4508, the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act of 2017. The bill would reauthorize the Higher Education Act of 1965, which affects several aspects of higher education including financial aid and accountability. Over 60 amendments were introduced and 19 were adopted; a list of amendments can be found here and a summary of the bill as introduced can be found here. The bill is now available for consideration on the House floor.

 

Interior Department Announces FY2017 Mineral Revenue Sharing Amounts

Last month the Interior Department announced the fiscal year 2017 disbursements from energy and minerals production on federal and American Indian lands and offshore areas, totaling $7.11 billion. The fiscal year 2017 disbursements were nearly $1 billion higher than the previous year. Disbursements of $1.44 billion were allocated to 36 states, with the top states receiving revenues including Wyoming, New Mexico, Colorado, Utah, and North Dakota. Tribal governments and individual mineral rights owners received nearly $676 million and $950 million went toward the Land and Water Conservation Fund. Additional data on the disbursements can be found here.

 

New Statistics Released from the American Communities Survey

On December 7 the U.S. Census Bureau released statistics from the 2012-2016 American Community Survey five-year estimates data release. This data features more than 40 social, economic, housing, and demographic topics and the survey produces statistics for all of the nation’s 3,142 counties. Specific highlights include median gross rent, income, poverty, and commuting times. There are also narrative profiles available by state which contain data on households and families, geographic mobility, education, disability, industries, and more.

 

Education Releases Guidance on IDEA After Supreme Court Ruling

The Department of Education recently released a question-and-answer document to provide information on the issues addressed in the March 2017 U.S. Supreme Court opinion for Endrew F. v. Douglas County School District. This Individuals with Disabilities Education Act (IDEA) related case sought to clarify the scope of a free appropriate public education. The question and answer document was issued to provide parents, educators and other stakeholders information on the issues addressed in Endrew F. and the impact of the court’s decision. In its ruling, the court determined that in order to meet the requirements of IDEA, school districts must offer students with disabilities an individualized education program “reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances” and “meet challenging objectives.”

 

Recently Released Reports

Trends in State Tax Policy, 2018

Tax Foundation

50-State Comparison: Prior Learning Assessment Policies

Education Commission of the States

Energy-Related Carbon Dioxide Emissions Decreased in Most States from 2005 to 2015

U.S. Energy Information Administration

Coverage, Access, and Utilization by Medicaid Expansion Status

National Center for Health Statistics

State Accountability Under ESSA: Fall 2017 Submissions

American Institutes for Research

Strengthening Medicaid Long-Term Services and Supports in an Evolving Policy Environment: A Toolkit for States

Center for Health Care Strategies, Inc.

 

Economic News

 

Federal Reserve Raises Interest Rates

At its December meeting, the Federal Open Market Committee voted 7-2 to raise the target range for the federal funds rate to a range of 1.25 to 1.50 percent. The committee noted information received since the November meeting indicates that the labor market has continued to strengthen, and that economic activity has been rising at a solid rate. Averaging through hurricane-related fluctuations, job gains have been solid, and 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. 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. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.” The two members who voted against raising the federal funds rate preferred to maintain the existing target range.

 

Consumer Price Index Increased in November 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 November 2017, showing the CPI-U increased 0.4 percent on a seasonally adjusted basis. Over the last twelve months, the all items index rose 2.2 percent. The index for all items less food and energy rose 0.1 percent in November, while the energy index rose 3.9 percent, with an increase in the gasoline index of 7.3 percent. The index for all items less food and energy rose 1.7 percent for the 12 months ending November, a slight decline from the 1.8 percent increase for the 12 months ending in October. Meanwhile, real average hourly earnings for all employees decreased 0.2 percent from October to November, seasonally adjusted. This result stems from a 0.2 percent increase in average hourly earnings being more than offset by a 0.4 percent increase in the CPI-U.