This Week on the Hill
The House and Senate are in session this week, with funding for the government set to expire on Thursday.
The House convenes today and will consider nine bills under suspension of the rules, and for the balance of the week will consider two bills including H.R. 772, which directs the Food and Drug Administration to reissue its menu labeling rules related to calorie and nutrition information. The House may also consider legislation making further appropriations for fiscal year 2018; currently House Democrats have a retreat scheduled for Wednesday, but this could be changed depending on the spending bill. There is limited committee action scheduled this week: the Agriculture Committee will hold a hearing Tuesday on the state of the rural economy and the Ways and Means Committee will hold a hearing Tuesday on opioid abuse and dependence in Medicare.
The Senate convenes at 3 p.m. today to debate the nomination of Andrei Iancu to be director of the U.S. Patent and Trademark Office, followed by a confirmation vote at 5:30 p.m. Several committees have scheduled hearings this week: the Energy and Natural Resources Committee will hold a hearing Thursday on energy infrastructure; the Environment and Public Works Committee will hold a hearing Wednesday on the impact of federal environmental regulations on farming and ranching; and the Health, Education, Labor and Pensions Committee will hold a hearing Tuesday on improving college affordability when reauthorizing the Higher Education Act.
New Fiscal Year 2018 Continuing Resolution Expected This Week
The current continuing resolution (CR) funding the federal government (P.L. 115-120) expires Thursday. No new text has been released at this time, but according to news reports, another continuing resolution is expected that would run through March 22 or 23. The White House is seeking additional funds for items known as “anomalies” to be added to the next CR, including: $90 million to help the Internal Revenue Service implement the new tax law; $225 million in emergency funds for the Small Business Administration’s disaster loans account; and funds for defense shipbuilding and Department of Energy nuclear weapons accounts. It is unknown if the latest CR would include a suspension of the debt ceiling, or funding for other programs such as disaster relief and community health centers, in an attempt to secure votes for passage. As House Democrats have scheduled a retreat starting Wednesday, a vote in the House may occur as early as Tuesday.
Debt Limit Will Be Reached Earlier than Previously Estimated
Last week the Treasury Department and Congressional Budget Office (CBO) both released new estimates on when the federal government may reach its statutory debt limit. The debt limit was suspended on September 8, 2017 and the suspension expired on December 8. Since that date, the Treasury Department has been using “extraordinary measures” to borrow additional funds without breaching the debt ceiling. The CBO projects that if the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted in the first half of March. CBO had previously estimated the debt ceiling would be reached in late March or early April, but the office incorporated the anticipated effects of the tax bill into its new calculations. Meanwhile, Treasury sent a letter to congressional leaders that estimates the “debt issuance suspension period” would continue through February 28, and requests that lawmakers act to increase the statutory debt limit as soon as possible.
Powell Sworn in as Fed Chair, Interest Rate Held Steady
Today Jerome Powell was sworn in as the 16th chairman of the Board of Governors of the Federal Reserve, as the Fed voted last week to keep interest rates steady. Janet Yellen had led the Fed since February 2014 but was not reappointed by President Trump. Mr. Powell’s term as Chairman is four years; prior to his appointment as Chairman, he served as a member of the Board of Governors since May 2012. Last Wednesday the Federal Market Open Committee voted 9-0 to maintain the target range for the federal funds rate at 1.25 to 1.50 percent. The committee noted that information received since the last meeting in December indicates the labor market has continued to strengthen and that economic activity has been rising at a solid rate.
EPA Delays Waters of the United States Rule
On Wednesday the Environmental Protection Agency (EPA) and Army Corps of Engineers finalized a rule adding an applicability date to the 2015 Clean Water Rule also known as Waters of the United States (WOTUS). The 2015 rule was intended to clarify which bodies of water fell under the jurisdiction of the Clean Water Act, expanding it to include smaller waterways such as ponds, headwaters and wetlands; the original effective date was August 28, 2015. The rule was halted by a nationwide stay from the U.S. Court of Appeals for the Sixth District, but recently the Supreme Court ruled that challenges to the WOTUS rule must be filed in federal district courts, not federal appeals courts. To prevent the rule from going into effect after the Supreme Court decision, the EPA action extends the applicability date to 2020. During that time, the EPA and Army Corps of Engineers will be reconsidering the 2015 rule and working to develop a new rule that would revise the definition of “waters of the United States.” The language for the final rule changing the applicability date can be found here.
FFIS Releases Grants 101 Resource
Last week Federal Funds Information for States (FFIS) released Grants 101: An Introduction to Federal Grants for State and Local Governments. The report covers the types of spending that make up total federal outlays, the types of payments from the federal government to recipients (including states), and the various types of grants that reach states. Also included is a list of sources for tracking federal funds, including USAspending.gov.
DOJ Announces Surge to Combat Prescription Drug Diversions
On Wednesday Attorney General Jeff Sessions announced a surge by the Drug Enforcement Administration (DEA) to combat prescription drug diversion. The 45-day action will surge Special Agents, Diversion Investigators, and Intelligence Research Specialists to focus on pharmacies and prescribers who are dispensing unusual or disproportionate amounts of drugs. The DEA will aggregate and analyze data from 80 million transaction reports it collects each year from prescription drug manufacturers and distributors to identify patterns, trends, and statistical outliers. Last fall the Department of Justice created the Opioid Fraud and Abuse Detection Unit, and also assigned experienced prosecutors to opioid hot spot districts to focus on investigating and prosecuting opioid-related health care fraud.
FCC Votes to Increase Effectiveness of Wireless Emergency Alerts
Last Tuesday the Federal Communications Commission (FCC) adopted rules to improve the geographic targeting of Wireless Emergency Alerts (WEA), a system that delivers critical warnings and information to the public on their wireless phones. According to the FCC, the updated rules are intended to “promote the wider use and effectiveness of this lifesaving service, especially for state and local authorities to convey critical messages to their communities.” The new action requires participating wireless providers to deliver WEA alerts to the target area specified by the alert originator with no more than one-tenth of a mile overshoot; the enhanced geo-targeting requirement will become effective on November 30, 2019. Since it was deployed in April 2012, WEA has been used to issue over 33,000 emergency alerts, including severe weather warnings, evacuate and shelter-in-place alerts, and AMBER Alerts. The report and order adopted by the FCC can be found here and commissioner statements can be found here.
Recently Released Reports
Tax Reform Moves to the States: State Revenue Implications and Reform Opportunities Following Federal Tax Reform
Tax Foundation
TANF 12th Report to Congress
Administration for Children and Families
How Students Use Federal, State and Institutional Aid to Pay for College: A Primer for State Policymakers
Education Commission of the States
Medicare Beneficiaries' Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future
Kaiser Family Foundation
Economic News
Economy Adds 200,000 Jobs in January
New data released last week by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 200,000 in January and the unemployment rate was unchanged at 4.1 percent. Economists had expected an increase of about 180,000 as January marked the 88th straight month of job growth. The data also shows that in January there were 6.7 million unemployed persons, little changed from 6.6 million in December. The number of long-term unemployed (jobless for 27 weeks or more) was little changed at 1.4 million, accounting for 21.5 percent of the total unemployed. The labor force participation rate was 62.7 percent for the fourth consecutive month. In January, job gains occurred in construction (36,000), food services and drinking places (31,000), health care (21,000) and manufacturing (15,000). Employment saw little change for mining, wholesale trade, retail trade, transportation and warehousing, information, financial activities, professional and business services, and government. The average hourly earnings for all employees increased by 9 cents to $26.74 in January, following an increase of 11 cents in December. Over the year, average hourly earnings have risen by 75 cents or 2.9 percent.
Unemployment Rates Lower in 6 States in December
New data from the Bureau of Labor Statistics shows that most state unemployment rates saw little change in December; 43 states had stable unemployment rates, 1 state had a higher rate and 6 states and the District of Columbia had lower rates. Compared to one year earlier, 23 states and the District of Columbia had little or no change, 2 states had increases, and 25 states had unemployment rate decreases. The national jobless rate was unchanged from November at 4.1 percent but was 0.6 percentage point lower than in December 2016. Nonfarm payroll employment increased in 10 states in December, decreased in 3 states and was essentially unchanged in 37 states and the District of Columbia. Over the year, 25 states added nonfarm payroll jobs and 25 states and the District of Columbia were essentially unchanged.