This Week on the Hill
The House and Senate are in recess this week and are scheduled to return on February 26.
New Report Projects Growing Health Care Expenditures
New data from the Centers for Medicare and Medicaid Services (CMS) shows that under current law, national health spending is projected to grow at an average rate of 5.5 percent per year for the period of 2017-2026 and to reach $5.7 trillion by 2026. This is a higher rate than the 4.2 percent growth seen during the period of 2008-2016. Health spending is projected to grow 1.0 percentage point faster than Gross Domestic Product (GDP) per year during the period, resulting in the health share of GDP expected to rise from 17.9 percent in 2016 to 19.7 percent by 2026. Among the major payers for health care, projected growth in spending for Medicare (7.4 percent per year) and Medicaid (5.8 percent per year) are both substantial contributors to the rate of national health expenditure growth, although for different reasons: in Medicare, projected enrollment growth is a primary driver; for Medicaid, it is an increasing projected share of aged and disabled enrollees. By 2026, federal, state, and local governments are projected to sponsor 47 percent of total national health expenditures, up from 45 percent in 2016. National health spending is projected to have reached nearly $3.5 trillion in 2017.
Senate Fails to Advance Immigration Legislation
Last week the Senate failed to advance three different proposals that addressed the Deferred Action for Childhood Arrivals (DACA) program and border security. A vote on the framework proposed by the President failed in a 39-60 vote, while a plan offered by Senators Mike Rounds (R-SD) and Angus King (I-ME) secured 54 yes votes and a plan sponsored by Senators John McCain (R-AZ) and Chris Coons (D-DE) was blocked by a vote of 52-47. It is uncertain when Congress will schedule additional immigration votes; although the President ended the DACA program as of March 5, two federal courts are blocking that action.
Bipartisan Bill to Reinstate Advanced Refunding Bonds Introduced
Last Tuesday Representatives Randy Hultgren (R-IL) and C.A. Dutch Ruppersberger (D-MD) introduced a bill to restore the tax exemption for advance refunding bonds that was repealed in the Tax Cuts and Jobs Act. The press release noted that “while the Tax Cuts and Jobs Act protected the vast majority of municipal bonds, the law repealed the exclusion of interest income earned on advance refunding bonds from federal income taxation. This change to the tax code makes it more expensive for states and local governments to take advantage of a favorable interest rate environment.” The bill, H.R. 5003, has been referred to the Ways and Means Committee although no action has been scheduled at this time.
Senate Committee Advances Criminal Justice Reforms Bill
On Thursday the Senate Judiciary Committee voted 16-5 to advance the Sentencing Reform and Corrections Act, comprehensive legislation aimed at reducing mandatory minimums for certain non-violent offenders. Provisions of the bill include: eliminating the three-strike mandatory life provision; increasing judicial discretion in sentencing of certain nonviolent offenders; adding new mandatory minimums for certain interstate domestic violence and heroin-trafficking offenses; establishing recidivism reduction programs; limiting solitary confinement for juveniles in federal custody; and creating the National Criminal Justice Commission to undertake a comprehensive review of the criminal justice system. The Attorney General voiced concerns with the bill in a letter to committee chairman Chuck Grassley (R-IA) last week.
ACF Releases Updated Second Quarter SSBG Allocations
On February 7 the Administration for Children and Families (ACF) released an update on the Social Services Block Grant (SSBG) fiscal year 2018 remaining second quarter allocation. Based on the continuing resolution (CR) passed by Congress and signed by the President on December 9, 2017, SSBG funds will be allocated through February 8, 2018, based on the previous year's SSBG allocation. Final fiscal year 2018 award amounts will be determined after passage of a full year appropriation. The total state allocation is approximately $87 million and the total territory allocation is $36,097.
FEMA Releases Draft National Mitigation Strategy for Comment
The Federal Emergency Management Agency (FEMA) recently released a draft National Mitigation Investment Strategy and is soliciting comments from the public. The Investment Strategy is intended to provide a national approach to investments in mitigation activities and risk management across the country for the federal government; state, local and tribal governments; and the private sector. Centered around three principles, the Investment Strategy provides recommendations organized around six outcomes including improved coordination, increasing private investments, shared responsibility with state and local governments, improved risk communication, better data-sharing, and improving the resiliency of the built environment. Comments will be accepted through March 11.
Report Shows Costs of the Opioid Crisis Continue to Rise
A new report from Altarum, a nonprofit health care research institute, shows that the cost of the country’s opioid crisis is estimated to have exceeded $1 trillion from 2001 to 2017 and is projected to cost an additional $500 billion by 2020. The annual cost increased from $29.1 billion in 2001 to an estimated $115 billion in 2017, with the growth rate between 2011 and 2016 doubling the rate observed between the previous five years. The costs of the opioid crisis are borne by individuals in the form of lost wages; the private sector in lost productivity and health care costs; and federal, state and local governments in lost tax revenue and additional spending on health care, social services, education and criminal justice.
Recently Released Reports
Key Healthcare Proposals in Governors' Proposed Budgets for SFY2019
Kaiser Family Foundation
How States Fund Pre-K: A Primer for Policymakers
Education Commission of the States
Budgeting for Cybersecurity
National Conference of State Legislatures
2015-16 National Postsecondary Student Aid Study: Student Financial Aid Estimates for 2015-16
National Center for Education Statistics
Economic News
Consumer Price Index Increased in January 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 January, showing the CPI-U increased 0.5 percent on a seasonally adjusted basis. Over the last twelve months, the all items index increased 2.1 percent before seasonal adjustment. The seasonally adjusted increase in the all items index was broad-based, with increases in the indexes for gasoline, shelter, apparel, medical care, and food all contributing. The index for all items less food and energy rose 0.3 percent in January, while the energy index rose 3.0 percent and the food index rose 0.2 percent. The index for all items less food and energy rose 1.8 percent for the 12 months ending January. Meanwhile, real average hourly earnings for all employees decreased 0.2 percent from December to January, seasonally adjusted. This result stems from a 0.3 percent increase in average hourly earnings being offset by a 0.5 percent increase in the CPI-U.