This Week on the Hill
The House is out this week, but the Senate is in session. The House is scheduled to return on January 8.
The Senate convenes Wednesday and will swear-in two new members: Doug Jones of Alabama and Tina Smith of Minnesota. The chamber will also consider the nomination of John C. Rood to be Under Secretary of Defense for Policy.
2018 Legislative Preview
Congress returns in January with a long list of issues to solve and several deadlines looming. Below is a brief overview of topics that the federal government is expected to face in the coming weeks.
- Fiscal Year 2018 funding: The continuing resolution signed by the President on December 22 expires on January 19. Congress will need to negotiate a new spending deal prior to that date, which may take the form of another short-term bill or an omnibus that would fund the government for the remainder of fiscal 2018. Part of the negotiation will involve setting the overall spending amounts; if Congress wants to spend more than allowed under the current budget caps ($549 billion for defense and $516 billion for non-defense discretionary) a bipartisan agreement will be needed.
- Reauthorize the Children’s Health Insurance Program (CHIP): The bill that extended funding for the federal government through January 19 also extended CHIP through March 31 and provided $2.85 billion in funding. Congress will need to agree on a long-term reauthorization during this quarter, or will be faced with the need for another short-term solution and the possibility of states closing their programs. A bill to reauthorize the program for five years (R. 3922) passed the House but has faced concerns from Democrats in the Senate over the proposed funding offsets.
- Raise the debt limit: On December 8, the debt limit suspension authorized by Congress’ September budget deal expired, and the debt limit was reinstated at $20.5 trillion. It is estimated that the debt ceiling will likely be reached in March, once the Treasury Department has exhausted its use of extraordinary measures to stay below the ceiling.
- Stabilize or repeal the Affordable Care Act: After competing bills were introduced last year to both repeal the Affordable Care Act (ACA) and stabilize the law, it is uncertain what Congress may do this year on health care. Two bills were introduced to stabilize the law: a bill to continue cost-sharing reduction payments and a bill to fund a reinsurance program. The ACA’s individual mandate was repealed as part of the tax bill approved in December; Senate Majority Leader Mitch McConnell (R-KY) promised to consider the stabilization bills as part of the negotiations over the tax bill.
- Address the Deferred Action for Childhood Arrivals (DACA) Program: Last fall the President announced his administration would end an Obama-era program that allowed young undocumented immigrants to live in the country without facing deportation; the program expires on March 5. Members of Congress are hoping to negotiate a deal on the program prior to its expiration, although contentious issues such as border security and funding a border wall may prove to be a hurdle.
Other issues that could be brought forward by the administration or Congress include an infrastructure funding package, a third supplemental disaster aid bill, possible action to delay or suspend the imposition of several health insurance taxes, and entitlement reform.
FirstNet Deadline Passes, All States Opt-In
The statutory 90-day decision period for governors to “opt-in” or “opt-out” of the First Responder Network Authority’s (FirstNet) proposed Radio Access Network expired on December 28. As of that date, all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands had made the decision to opt-in to the network; three territories (American Samoa, Guam, and the Northern Mariana Islands) have until March 12, 2018 to make their decision. According to FirstNet, the authority will issue work orders to deploy the Radio Access Networks across the country in early 2018. New Hampshire, which had originally indicated it was opting-out of the network and choosing an alternative plan, ultimately decided to opt-in to the FirstNet Radio Access Network.
Hatch Introduces Tax Extenders Package
After passage of the tax bill, Senate Finance Committee Chairman Orrin Hatch (R-UT) introduced S. 2256, the Tax Extenders Act of 2017. The Senate tax extenders package would retroactively extend a number of tax credits and deductions that expired at the end of 2016 through 2018. Provisions that would be extended through 2018 include a tax deduction for mortgage debt forgiveness, a deduction for college tuition and related expenses, and renewable tax credits for certain wind energy facilities, geothermal heat pumps and fuel cell projects. The extenders package also includes a revamped credit meant to encourage investment in carbon capture technology, which is supported by the coal industry. The Senate Finance Committee may consider the measure in January.
FCC Announces Connect America Broadband Funds
The Federal Communications Commission (FCC) recently identified the locations of nearly 1 million homes and small businesses, currently unserved by high speed Internet access, in 48 states that are eligible for up to $2 billion in support for broadband deployment over the next decade. The funds will be distributed through the FCC’s Connect America Fund, to support companies that successfully compete in an auction to deploy broadband at the lowest cost in these unserved rural areas across the country. The auction, scheduled to begin in 2018, seeks to expand service to census blocks unserved by broadband delivering speeds of 10 Mbps downloads/1 Mbps uploads. A map showing the locations eligible for support can be found here and a public notice on the auction can be found here.
GAO Study Examines Potential Revenue Gains from Remote Online Sales
The U.S. Government Accountability Office (GAO) released a report that examines potential state revenue from collecting taxes on remote online sales as well as compliance costs for businesses. GAO estimated that state and local governments could gain from about $8 billion to about $13 billion in 2017 if states were given authority to require sales tax collection from all remote sellers; this is about 2 to 4 percent of total 2016 state and local government general sales and gross receipts tax revenues. The report also found that some businesses would likely see increases in several types of costs if required to collect taxes on all remote sales, with higher costs expected for businesses not currently experienced in multistate tax collection. In 1992, the Supreme Court ruled in Quill v. North Dakota that a state can only require a business to collect and remit sales tax if the business has substantial presence in that state. A case, South Dakota v. Wayfair, Inc., challenging that decision is currently pending before the U.S. Supreme Court.
USDA Releases SNAP Administration Flexibility Guidance
Last month the U.S. Department of Agriculture (USDA) Food and Nutrition Service issued national program guidance on new flexibility for Supplemental Nutrition Assistance Program (SNAP) state operators. The new guidance clarifies that while certification decisions must be made by state employees, USDA is expanding the possible use of contracted private-sector staff to provide basic case-specific information. According to the release, USDA recently approved requests from Michigan and Louisiana, and this guidance reflects the department’s interest in considering other similar state requests. A memo on personnel guidance for call centers can be found here.
CDC Report Shows Increased Deaths from Drug Overdoses
A report released last month by the Centers for Disease Control and Prevention (CDC) found that in 2016, there were more than 63,600 drug overdose deaths in the United States. Also, the age-adjusted rate of drug overdose deaths involving synthetic opioids other than methadone doubled between 2015 and 2016, from 3.1 to 6.2 per 100,000; the rates of drug overdose deaths increased from 1999 to 2016 for all age groups. In 2016, 22 states and the District of Columbia had age-adjusted drug overdose death rates that were statistically higher than the national rate.
CMS Announces Phase-Out of Designated State Health Programs
The Centers for Medicare & Medicaid Services (CMS) released a letter to states announcing that CMS will no longer be accepting state proposals to finance Medicaid 1115 demonstrations by drawing down federal funds for programs that have historically been paid for by states outside of Medicaid. These time-limited arrangements, known as Designated State Health Programs (DSHP), effectively allow states to bypass paying their usual share of Medicaid expenses for demonstration programs, according to the CMS letter. Authority for DSHP in current demonstrations will continue until the end of the state's current demonstration period but will not be extended or renewed. CMS also began requiring states to submit claiming protocols to ensure only allowable DSHP costs were matched with federal Medicaid funds.
EPA Solicits Comments on Replacement of the Clean Power Plan Rule
On December 18 the Environmental Protection Agency (EPA) issued an Advance Notice of Proposed Rulemaking (ANPRM) to announce that the agency will solicit public input on the next regulatory steps to limit greenhouse gas emissions. In the ANPRM, the EPA is considering proposing emission guidelines to limit greenhouse gas emissions from existing electric utility generating units and is soliciting information on the proper respective roles of state and federal governments in that process, as well as information on systems of emission reduction, compliance measures, and state planning requirements. The full text of the ANPRM can be found here and a fact sheet can be found here. Comments may be submitted for 60 days after publication in the Federal Register. The ANPRM is a separate, but related, action to the October 16, 2017 proposed rule to repeal the Clean Power Plan.
Recently Released Reports
October 2017 Medicaid and CHIP Enrollment Data Highlights
Centers for Medicare and Medicaid Services
Transforming Federal Grant Reporting: Open the Data, Reduce Compliance Costs, and Deliver Transparency
Data Foundation
Completing College: A National View of Student Completion Rates - Fall 2011 Cohort
National Student Clearinghouse Research Center
MACStats: Medicaid and CHIP Data Book
Medicaid and CHIP Payment and Access Commission
How Do School Funding Formulas Work?
Urban Institute
Economic News
Third Estimate Shows GDP Increased 3.2 Percent in Third Quarter 2017
Recently released data from the Department of Commerce Bureau of Economic Analysis shows that real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the third quarter of 2017. Gross domestic product is the value of the goods and services produced by the nation’s economy less the value of goods and services used up in production. This information is based on the “third” estimate, which is derived from more complete source data than were available for the “second” estimate issued last month, which showed an increase of 3.3 percent. For the third estimate of the third quarter, personal consumption expenditures increased less than previously estimated, but the general picture of economic growth remains the same. The release also noted that the downward revision to personal consumption expenditures was partly offset by an upward revision to state and local government spending. In the second quarter of 2017, real GDP increased 3.1 percent.
Unemployment Rates Stable in 40 States in November
New data from the Bureau of Labor Statistics shows that most regional and state unemployment rates saw little change in November; 40 states and the District of Columbia had stable unemployment rates, 2 states had higher rates and 8 states had lower rates. Compared to one year earlier, 25 states and the District of Columbia had little or no change, while 2 states had increases, and 23 states had jobless rate decreases. The national jobless rate was unchanged from October at 4.1 percent but was 0.5 percentage point lower than in November 2016. Nonfarm payroll employment increased in 6 states in November, decreased in 2 states and was essentially unchanged in 42 states and the District of Columbia. Over the year, 27 states added nonfarm payroll jobs and 23 states and the District of Columbia were essentially unchanged. In November, 17 states had unemployment rates lower than the U.S. figure of 4.1 percent, 9 states and the District of Columbia had higher rates, and 24 states had rates that were not appreciably difference from that of the nation.