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March 12, 2018 - Washington Report

By Leah Wavrunek posted 03-12-2018 03:50 PM

  

This Week on the Hill

The House and Senate are in session this week, working on a fiscal year 2018 spending bill, financial regulations and school violence bills.

The Senate convenes today and will resume consideration of a financial deregulation bill, with a vote expected this week (additional information on the bill is below); the chamber may also vote on the nominee to head U.S. Customs and Border Protection. Several committees scheduled hearings this week: the Commerce, Science and Transportation Committee will hold a hearing Tuesday on state and local transportation needs; the Judiciary Committee will hold a hearing Wednesday on school safety; and the Energy and Natural Resources Committee will hold a hearing on the President’s proposed fiscal 2019 budget for the Interior Department.

The House convenes Tuesday and will consider six bills under suspension of the rules including S. 324, the State Veterans Home Adult Day Health Care Improvement Act. On Wednesday the House will consider five bills including H.R. 3249, the Project Safe Neighborhoods Grant Program Authorization Act. For Thursday and the balance of the week, the chamber will vote on two bills, with additional legislative items possible. Several committees scheduled hearings this week: the Education and the Workforce Committee will hold a hearing Thursday on accountability in welfare programs; the Homeland Security Committee will hold a hearing Thursday on lessons from the 2017 disasters; and the Oversight and Government Reform Committee will hold a hearing Thursday on federal permitting processes.

 

Budget Negotiations Continue with Two Weeks Until Deadline

The current continuing resolution (P.L. 115-123) funding the federal government expires on March 23 and appropriators continue to work on an omnibus appropriations bill. The bipartisan budget deal enacted last month provided an additional $143 billion for discretionary programs in fiscal year 2018, split between defense ($80 billion) and nondefense ($63 billion) programs. House Majority Leader Kevin McCarthy has said the House bill may be released this week, although disagreements linger between the House and Senate on the treatment of family planning funds in the Labor-Health and Human Services-Education spending bill.

 

Different Strategies Emerge on Infrastructure

Last week House Speaker Paul Ryan (R-WI) and Senate Democrats revealed differing strategies for moving an infrastructure package through Congress, following the release of the President’s infrastructure plan and legislative principles last month. According to various media reports, Speaker Ryan said that House Republicans will break up the President’s infrastructure plan into multiple pieces of legislation as a way to make progress this year; the House will first address airports and runways as part of a reauthorization of the Federal Aviation Administration. Following the reauthorization would be bills to address highways, bridges, harbors and the electrical grid. The two-year budget deal reached last month included a $20 billion increase for infrastructure, split between fiscal 2018 and 2019; details on how that money would be allocated is expected in the March 23 spending bill. Meanwhile, Senate Democrats released a $1 trillion infrastructure plan as an alternative to the administration’s plan. Instead of the President’s $200 billion federal investment to spur $1.5 trillion in total public/private investment, the Democrats’ plan calls for a $1 trillion direct federal investment offset by changes to the tax code. The Department of Transportation also released a report on the President’s infrastructure plan, describing the transportation initiatives proposed in the plan.

 

Banking Bill Advances in Senate, Addresses Municipal Debt

The Senate is expected to vote this week on a bill (S. 2155) that would modify provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and other laws governing regulation of the financial industry. The bill would change the regulatory framework for small depository institutions with assets under $10 billion (community banks) and for large banks with assets over $50 billion. The bill also would make changes to consumer mortgage and credit-reporting regulations and to the authorities of the agencies that regulate the financial industry. A cost estimate from the Congressional Budget Office found the bill would increase federal deficits by $671 million over ten years and would slightly increase the probability that a systematically important financial institution would fail. Section 403 of the bill deals with the treatment of certain municipal obligations; the bill corrects an error made in Dodd-Frank, which excluded some municipal bonds from being considered high-quality liquid assets (HQLA) during a capital solvency risk stress test, and makes all investment grade municipal debt eligible as HQLA.

 

Federal Government Supports States in Online Sales Tax Case, Bills May Ride Along on Omnibus

Last week the Solicitor General filed an amicus curiae brief supporting South Dakota in the case pending before the U.S. Supreme Court on the collection of online sales taxes, South Dakota v. Wayfair, Inc. As part of its argument, the brief states that when deciding the precedent-setting case of Quill Corp. v. North Dakota (which required a physical presence for the collection of sales taxes), “the Quill Court did not and could not anticipate the development of modern e-commerce.” New briefs in support of South Dakota were also filed by four senators and 41 states, territories and the District of Columbia. The Supreme Court will hear the case on April 17. Meanwhile, two bills are being pushed for inclusion in the fiscal year 2018 omnibus bill addressing the issue of online sales tax collection. The first, S. 976 and sponsored by Senator Mike Enzi (R-WY), would allow state and local authorities in the state where the buyer lives to enforce sales tax levies on out-of-state vendors in online transactions. The other bill, H.R. 2193 and sponsored by Representative Kristi Noem (R-SD), is similar to the Senate bill but would exempt companies with less than $5 million in annual sales from audit and would phase in enforcement based on total annual sales.

 

DOT Announces Fiscal Year 2017 TIGER Grants

On Friday the Department of Transportation announced the list of 41 recipients of nearly $500 million in discretionary funding for road, transit, maritime and rail projects through the Transportation Investment Generating Economic Recovery (TIGER) program. According to the announcement, more than 64 percent of this round of TIGER funding was awarded to rural projects, and tribal projects are receiving $39.18 million. The fiscal year 2017 TIGER program gave special consideration to projects which emphasized improved access to reliable, safe, and affordable transportation for communities in rural areas, such as projects that improve infrastructure condition, address public health and safety, promote regional connectivity, or facilitate economic growth or competitiveness. Additional information on the selected projects can be found here.

 

School Violence Bills Introduced in House and Senate

Multiple bills have been introduced in the House and Senate to address school violence, with a bill receiving a vote in the House this week. On Wednesday the House is scheduled to vote on the Student, Teachers, and Officers Preventing (STOP) School Violence Act (H.R. 4909). The bill would authorize $50 million annually to create a grant program to train students, teachers, school officials and local law enforcement on how to identify and intervene early when signs of violence arise, create a coordinated reporting system, and implement school threat assessment protocols. Last week a group of 13 Republican senators introduced the School Safety and Mental Health Services Improvement Act, which would allow public schools to use federal dollars for school counselors, alarm systems, security cameras and crisis intervention training. The bill text can be found here and a summary can be found here. On Sunday the administration unveiled its priorities for legislation designed to prevent school violence, including using federal funds for teachers who volunteer for firearms training and the creation of a blue-ribbon commission headed by Education Secretary Betsy DeVos to study school safety and violence.  

 

President Trump Issues Proclamations on Steel and Aluminum Tariffs

Last week the President issued two proclamations related to tariffs on imports of steel and aluminum. Citing a threat to national security, the proclamation on steel adjusts the import of steel articles by imposing a 25 percent ad valorem tariff on steel articles imported from all countries except Canada and Mexico. The proclamation on aluminum adjusts the imports of aluminum articles by imposing a 10 percent ad valorem tariff on aluminum articles imported from all countries except Canada and Mexico. Both proclamations state that the President may also remove or modify the restriction on steel or aluminum articles from any country that arrives at a satisfactory alternative means to address the national security threat.

 

Bipartisan Mandatory Parks Funding Bill Introduced

Last week a bipartisan, bicameral group introduced a bill that will use revenues from energy production on federal lands to help pay for the over $11 billion maintenance backlog at national parks. The National Park Restoration Act (S. 2509) was introduced by Senators Lamar Alexander (R-TN), Angus King (I-ME), Steve Daines (R-MT), Martin Heinrich (D-NM), Shelley Moore Capito (R-WV), Joe Manchin (D-WV), Cory Gardner (R-CO) and Thom Tillis (R-NC), and Representatives Mike Simpson (R-ID) and Kurt Schrader (D-OR). The bill creates the National Park Restoration Fund to provide mandatory funding for the high-priority deferred maintenance needs that support critical infrastructure and visitor services at the national parks, providing the funding for the backlog on top of annual appropriations for operations and construction at the National Park Service. The fund would receive 50 percent of onshore and offshore revenues from energy production on federal lands over expected amounts that are not already allocated to other purposes.

 

Governors Urge Congress for Additional Opioid Funds

On Thursday the Senate Health, Education, Labor and Pensions Committee held a hearing on the opioid crisis with two governors giving testimony: Governor Larry Hogan of Maryland and Governor Kate Brown of Oregon. Each of the governors noted the importance of funding to their states and indicated the $6 billion included in the recent two-year budget deal is a start but additional funds are needed. Governor Hogan noted in his testimony that his administration has committed half a billion dollars toward fighting the heroin and opioid epidemic and substance use disorders, but the scale of the crisis will require a much more aggressive approach from the federal government, backed up by sufficient federal funding. Governor Brown’s testimony indicated she will soon declare addiction and substance abuse to be a public health crisis, as Oregon, California, Washington and the province of British Columbia are planning regional work to tackle the crisis.

 

Recently Released Reports

Governors’ Top Education Priorities in 2018 State of the State Addresses

Education Commission of the States

Emergency Department Data Show Rapid Increases in Opioid Overdoses

Centers for Disease Control and Prevention

The Impact of Federal Tax Reform on State Corporate Income Taxes

Council on State Taxation

The Future of Statewide College Promise Programs

The Century Foundation

 

Economic News

 

Economy Adds 313,000 Jobs in February

New data released last week by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 313,000 in February and the unemployment rate was unchanged at 4.1 percent. The growth in February is the biggest gain since July 2016. The data also shows that in February there were 6.7 million unemployed persons, unchanged from January. The number of long-term unemployed (jobless for 27 weeks or more) was essentially unchanged at 1.4 million, accounting for 20.7 percent of the total unemployed. The labor force participation rate increased by 0.3 percentage point over the month to 63.0 percent but changed little over the year. In February, job gains occurred in construction (61,000), retail trade (50,000), professional and business services (50,000), manufacturing (31,000), financial activities (28,000), mining (9,000) and health care (19,000). Employment saw little change for wholesale trade, transportation and warehousing, information, leisure and hospitality, and government. The average hourly earnings for all employees increased by 4 cents to $26.75 in February, following an increase of 7 cents in January. Over the year, average hourly earnings have risen by 68 cents, or 2.6 percent.