This Week on the Hill
The House and Senate return today, and the big issue facing Congress is passing an extension of federal funding, as the current continuing resolution expires Friday, January 19.
The House convenes today and will consider eight bills under suspension of the rules, including H.R. 4258, which restructures an employment and savings assistance program for low-income families. For Wednesday and the balance of the week, the House will consider three bills under suspension of the rules and three bills subject to a rule, and may also consider legislation making further appropriations for fiscal year 2018. Several committees are scheduled to meet this week: the Energy and Commerce Committee will hold a hearing Thursday on modernizing the Superfund cleanup program; the Transportation and Infrastructure Committee will hold a hearing Thursday on water resources infrastructure; and the Ways and Means Committee will hold a hearing Wednesday on CMS actions to prevent opioid misuse.
The Senate convenes today and will resume consideration of FISA reauthorization language. Several committees have scheduled hearings this week: the Finance Committee will hold an executive session Thursday on the nomination of Alex Azar as Secretary of Health and Human Services; the Health, Education, Labor and Pensions Committee will hold a hearing Thursday on reauthorizing the Higher Education Act; and the Homeland Security and Governmental Affairs Committee will hold a hearing Wednesday on Medicaid and the opioid epidemic.
Fiscal Year 2018 Budget Update
The current continuing resolution (P.L. 115-96) funding the federal government expires January 19, giving Congress just three days this week to reach an agreement on extending funding or face a government shutdown. The largest obstacles to reaching a funding agreement include setting the topline spending numbers and finding a solution for the Deferred Action for Childhood Arrivals (DACA) program. Another short-term funding extension has been expected, which may run through February 16, but uncertainty is growing as to whether Republicans can secure the votes to pass a bill through the House and Senate, with concerns voiced by members over defense spending levels and immigration. A House Republican conference meeting on the stopgap continuing resolution is scheduled for Tuesday night.
CHIP Update
An authorization of the Children’s Health Insurance Program (CHIP) may be included in an upcoming bill as new cost estimates show a significantly reduced cost or a savings to the government, depending on the length of the reauthorization. The January 5 cost estimate from the Congressional Budget Office (CBO) for S. 1827, the Keep Kids’ Insurance Dependable and Secure Act, shows a five-year reauthorization would increase the deficit by $0.8 billion over the next ten years. This cost estimate takes into account the enactment of the tax bill (P.L. 115-97), which repealed the penalties related to the individual health insurance mandate starting in 2019. A second cost estimate, released on January 11, estimated the effects of a ten-year reauthorization of CHIP, and found that enacting that change would decrease the deficit by $6 billion over a ten-year period. Without the concerns over offsets, it is expected that a CHIP reauthorization will pass Congress and some members have floated a six-year reauthorization. At this point, the main question is if the bill will be attached to a larger spending bill and what the timing of that may be. The current continuing resolution provides $2.85 billion in funding for CHIP allotments for the first half of FY 2018 that extends through March 31, 2018.
Supreme Court to Review Online Sales Tax Collection Case
Last week the U.S. Supreme Court announced it would consider a case challenging the high court’s 1992 ruling in Quill v. North Dakota, which required a company to have a “physical presence” in a state for sales taxes to be collected. South Dakota passed a law in 2016 that requires retailers with more than $100,000 in annual sales in the state to pay a 4.5 percent tax on purchases, meant to challenge the Quill decision. According to a recent report from the U.S. Government Accountability Office, state and local governments could have collected up to $13 billion more in 2017 if they had been allowed to require sales tax payments from online and other remote sellers; 45 states and the District of Columbia levy sales taxes on the sale of goods and services. The case before the Supreme Court is South Dakota v. Wayfair Inc; the court did not announce a date for oral arguments. The State and Local Legal Center, which provides assistance to states and local governments in connection with Supreme Court litigation, filed a “friend of the court” brief in support of South Dakota.
CMS Releases New Guidance for Medicaid Work Requirements, Approves Kentucky Waiver Request
The Centers for Medicare & Medicaid Services (CMS) announced new guidance that will allow states to use Medicaid section 1115 demonstration authority to make participation in work or other community engagement a requirement for continued Medicaid eligibility or coverage for certain adult Medicaid beneficiaries. CMS notes that the policy responds to numerous state requests to allow work or participation in other community engagement activities including skills training, education, job search, volunteering or caregiving as a condition for Medicaid eligibility for able-bodied, working-age adults. This policy change would exclude individuals eligible for Medicaid due to a disability, elderly beneficiaries, children, and pregnant women. To date, CMS has received demonstration project proposals from 9 states (Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, Utah and Wisconsin) that include employment and community engagement initiatives. On Friday, CMS approved Kentucky’s section 1115 demonstration project, which includes a community engagement requirement as a condition of eligibility for adult beneficiaries ages 19 to 64, with exemptions.
President Signs Executive Order to Support Transitioning Veterans
Last Tuesday the President signed an executive order on supporting veterans during their transition to civilian life. The order states that the federal government must improve mental healthcare and access to suicide prevention resources available to veterans, particularly during the critical one-year period following the transition from uniformed service to civilian life. The Departments of Defense, Veterans Affairs and Homeland Security are directed to submit a Joint Action Plan that describes concrete actions to provide seamless access to mental health treatment and suicide prevention services for transitioning uniformed service members in the year following discharge, separation, or retirement. The Department of Veterans Affairs issued a 2016 report on mental health and suicide which can be found here and state-specific data can be found here.
Bipartisan Caucus Releases Infrastructure Report
On Wednesday the bipartisan Problem Solvers Caucus released a new report with policy recommendations to build a 21st century infrastructure network. The report details bipartisan policy solutions to improve the nation’s highways, roads and bridges, transit and railways, ports and airports, water and sewer systems, energy systems and the power grid, and broadband and communications networks. For funding and financing, the report recommends maintaining the federal tax-exempt status for municipal bonds and private activity bonds, as well as increasing the private activity bond state volume cap for all infrastructure categories. The administration is also planning to release an infrastructure plan, but the timing of the release is unknown at this time.
Administration Releases Rural Prosperity Report, President Signs Orders on Rural Broadband
Last week the Interagency Task Force on Agriculture and Rural Prosperity, established through Executive Order 13790, released a report detailing its recommendations to promote agriculture, economic development, job growth, infrastructure improvements, technological innovation, energy security, and quality of life in rural America. The recommendations for legislative, regulatory, and policy changes are organized around five key indicators of rural prosperity. One of those indicators is e-Connectivity, where reliable and affordable high-speed internet connectivity can transform rural America as a key catalyst for prosperity. To help speed the deployment of rural broadband, the President signed two actions last week. The first, a presidential memoranda to the Secretary of the Interior, directs the Secretary to develop a plan to support rural broadband development and adoption by increasing access to tower facilities and other infrastructure assets managed by the department. The second, an executive order, instructs the General Services Administration to review the process for locating broadband facilities on federal property to ensure efficiency and effectiveness.
NOAA: 2017 Was Costliest Year for Weather Events in U.S.
A new report from the National Oceanic and Atmospheric Administration’s (NOAA) National Centers for Environmental Information found that the U.S. experienced a historic year of weather and climate disasters in 2017. In total, the U.S. was impacted by 16 separate billion-dollar disaster events tying 2011 for the record number of billion-dollar disasters for an entire calendar year. More notable than the high frequency of these events is the cumulative cost, which exceeds $300 billion in 2017, a new U.S. annual record; the previous annual record was $214.8 billion (CPI-adjusted), established in 2005. NOAA’s Billion-Dollar Weather and Climate Disaster website can be searched by state and disaster type, and contains data back to 1980.
Recently Released Reports
Counting for Dollars 2020: The Role of the Decennial Census in the Geographic Distribution of Federal Funds
George Washington University Institute of Public Policy
50-State Comparison: States' School Accountability Systems
Education Commission of the States
List of Expiring Federal Tax Provisions 2016-2027
Joint Committee on Taxation
Antibiotic Resistance Investment Map
Centers for Disease Control and Prevention
Public Education Funding Inequity
U.S. Commission on Civil Rights
Economic News
Job Openings at 5.9 Million in November
The number of job openings was little changed at 5.9 million on the last business day of November, according to data recently released by the U.S. Department of Labor; the job openings rate was 3.8 percent. Job openings increased in November for retail trade (+88,000), construction (+15,000), wholesale trade (+32,000), state and local government (+9,000) and leisure and hospitality (+6,000) but decreased in other services (-64,000), transportation, warehousing and utilities (-60,000), and real estate and rental and leasing (-39,000). The number of hires was little changed at 5.5 million in November and the hires rate was 3.7 percent. The number of separations was little changed at 5.2 million. The 3.2 million quits reported in November were little changed from October; 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 November, hires totaled 64.6 million and separations totaled 62.4 million, yielding a net employment gain of 2.1 million.
Consumer Price Index and Real Hourly Earnings Increased in December
The U.S. Bureau of Labor Statistics released new data on the Consumer Price Index for All Urban Consumers (CPI-U) for December 2017, showing the CPI-U increased 0.1 percent on a seasonally adjusted basis. Over the last twelve months, the all items index rose 2.1 percent before seasonal adjustment. The index for all items less food and energy rose 0.3 percent in December, while the energy index declined as the gasoline index decreased. The index for all items less food and energy rose 1.8 percent for the 12 months ending December; the 12-month change has now been either 1.7 or 1.8 percent for eight consecutive months. Meanwhile, real average hourly earnings for all employees increased 0.2 percent from November to December, seasonally adjusted. This result stems from a 0.3 percent increase in average hourly earnings combined with a 0.1 percent increase in the CPI-U. Real average hourly earnings increased 0.4 percent, seasonally adjusted, from December 2016 to December 2017.