This Week on the Hill
The House and Senate are both in session this week.
The House convenes today and will consider six natural resources bills. On Tuesday the chamber will consider 11 bills, with many related to privacy and identify theft. For Wednesday and the balance of the week, the House will consider two bills including H.R. 5445, the 21st Century IRS Act. Several committees scheduled hearings this week: the Appropriations Committee will hold several hearings on fiscal 2019 budget requests; the Energy and Commerce Committee will hold a hearing Thursday on robocalls; and the Ways and Means Committee will hold a hearing Tuesday on the jobs gap.
The Senate convenes today and will resume consideration of S. 140, a bill on Native American tribal water rights. The chamber may also take up S. 1129, the Coast Guard Reauthorization Act. Several committees scheduled hearings this week: the Energy and Natural Resources Committee will hold a hearing Tuesday on deferred maintenance in national parks; the Environment and Public Works Committee will hold a hearing Wednesday on the role of states in protecting groundwater; and the Senate Finance Committee will hold a hearing Wednesday on multiemployer pension systems.
Tomorrow the Supreme Court will hear oral arguments on the South Dakota v. Wayfair online sales tax case. A decision is expected by late June; a ruling in favor of South Dakota would allow state and local governments to collect billions of dollars more in sales taxes each year.
House Agriculture Committee Releases Farm Bill
On Thursday House Agriculture Committee Chairman K. Michael Conaway (R-TX) introduced the Agriculture and Nutrition Act of 2018 (H.R. 2), the 2018 Farm Bill. The current Farm Bill (P.L. 113-79) expires at the end of September. The bill touches on a broad array of issues, including food safety, nutrition and the environment. The Supplemental Nutrition Assistance Program (SNAP) would see over 35 changes in the bill, including strengthening existing work requirements and eliminating broad-based categorical eligibility for people who receive non-cash assistance from Temporary Assistance for Needy Families (TANF). The bill text can be found here, a section-by-section summary here, and the policy highlights here. The Congressional Budget Office released its cost estimate of the bill, finding a net increase in direct spending of $500 million over the 2019-2028 period. The bill is scheduled for a committee markup on Wednesday.
First Opportunity Zone Designations Announced
On April 9 the Treasury Department and Internal Revenue Service (IRS) designated the first Opportunity Zones in 18 states and territories. The Tax Cuts and Jobs Act (TCJA) created Opportunity Zones to spur investment in distressed communities throughout the country; new investments in these zones can receive preferential tax treatment. States nominate low-income communities to be designated as Qualified Opportunity Zones, which had an initial deadline of March 21 to either submit nominations or request a 30-day extension. This announcement covers nominations submitted by March 21, and future designations will be made for states that requested an extension. Submissions were approved for: American Samoa; Arizona; California; Colorado; Georgia; Idaho; Kentucky; Michigan; Mississippi; Nebraska; New Jersey; Oklahoma; Puerto Rico; South Carolina; South Dakota; Vermont; Virgin Islands; and Wisconsin. A list of all designated zones can be found here.
President Issues Executive Order on Work Requirements
Last Tuesday the President issued an Executive Order on Reducing Poverty in America by Promoting Opportunity and Economic Mobility. The executive order states that the federal government should do everything within its authority to empower individuals by providing opportunities for work and that it should be the policy of the federal government “to reform the welfare system of the U.S. so that it empowers people in a manner that is consistent with applicable law and the following principles, which shall be known as the Principles of Economic Mobility.” After laying out the new principles, the order directs the Secretaries of Treasury, Agriculture, Commerce, Labor, Health and Human Services, Housing and Urban Development, Transportation and Education to review all regulations and guidance documents relating to waivers and exemptions, determine if additional programs should have work requirements, and submit a list of recommended regulatory and policy changes within 90 days of this order. The order talks extensively about broadening state and local flexibility to administer programs that best fit their own unique needs and circumstances.
HUD Awards $28 Billion for Disaster Recovery Efforts, Other Funding Announced
Last week three different federal agencies announced funding for disaster recovery efforts. First, the Department of Housing and Urban Development (HUD) awarded nearly $28 billion to support long-term disaster recovery in hard-hit areas in nine states, Puerto Rico and the U.S. Virgin Islands. The funds are provided through HUD’s Community Development Block Grant-Disaster Recovery Program and will address seriously damaged housing, businesses and infrastructure from major disasters that occurred since 2015. Second, the Department of Commerce’s Economic Development Administration released its fiscal year 2018 Disaster Supplemental; up to $587 million will be available to help communities and regions devise and implement long-term economic recovery strategies in areas where a disaster was declared under the Stafford Act in 2017. Finally, the Department of Transportation announced more than $1 billion in Emergency Relief funds to help 32 states, several U.S. territories and Federal Land Management Agencies repair roads and bridges damaged by storms, floods and other unexpected events.
Labor Announces Grants to Streamline Occupational Licensing Rules
Last week the Department of Labor announced $7.5 million in funds to help review and streamline occupational licensing rules. Funds will be available to states, and associations of states, to review, eliminate and reform licensing requirements, and to promote portability of state licenses. Additionally, grant funding will be available to postsecondary institutions and occupational licensing partners to address barriers to licensure for veterans and transitioning service members. Individual states may apply for between $100,000 and $450,000 for a three-year grant. An existing association of states can apply for up to $1 million for a three-year grant. According to the announcement, Labor intends to make funding available for up to 20 states and may also fund one to two associations of states. Applications are due May 14. Additional information on the grant can be found here.
2019 Payment Rule for ACA Exchange Plans Finalized
The Centers for Medicare and Medicaid Services (CMS) released the Health and Human Services (HHS) Benefit and Payment Parameters for 2019 final rule last week, which includes CMS standards for issuers and exchanges, generally for plan years beginning on or after January 1, 2019. CMS also issued new guidance on expanding hardship exemptions, where individuals who live in counties with no issuers or only one issuer will now qualify for a hardship exemption from paying the Affordable Care Act’s (ACA) penalty for not having coverage. Under the final rule, states will have greater flexibility, including more options to select an essential health benefit benchmark plan and allowing its issuers to substitute benefits across benchmark plan categories. A fact sheet on the final rule can be found here.
Interagency Agreement Signed to Speed Up Project Permitting
Last week several federal agencies signed the One Federal Decision Memorandum of Understanding (MOU), intended to create a coordinated and timely process for environmental reviews of major infrastructure projects. The signatories include the following agencies: Departments of the Interior, Agriculture, Commerce, Housing and Urban Development, Transportation, Energy, and Homeland Security; Environmental Protection Agency; Army Corps of Engineers; Federal Energy Regulatory Commission; Advisory Council on Historic Preservation; and Federal Permitting Improvement Steering Council. Under the MOU, one lead agency will be responsible for navigating each major infrastructure project through the entire federal environmental review and permitting process, and agencies will follow permitting timetables established by the lead agency, with a completion goal of two years. The President’s Executive Order 13807 established a “One Federal Decision” mechanism for major infrastructure projects, and this MOU is a result of that order.
Smaller National Park Fee Increase Announced
On Thursday the National Park Service (NPS) announced changes to the entrance fees charged at national parks. Most seven-day vehicle passes to enter national parks will be increased by $5 and will be implemented in many parks beginning June 1. According to the announcement, more than two-thirds of national parks will remain free to enter; a complete list of park entrance fees can be found here. The price of the annual America the Beautiful National Parks and Federal Recreational Lands Annual Pass and Lifetime Senior Pass will remain $80. The NPS began studying fee increases to address the $11.6 billion in deferred maintenance across the system; all of the revenue from the fee increases will remain in the NPS with at least 80 percent of the money staying in the park where it is collected. The NPS initially proposed a larger increase in entrance fees at 17 national parks during peak season last year.
Nation’s Report Card Released
Last week the 2017 math and reading assessments for grades 4 and 8, also known as the Nation’s Report Card, were released. At the national level, compared to 2015, there was a 1-point increase in the average reading score at grade 8 in 2017, but no significant change in the average score for reading at grade 4, or for mathematics at either grade. Looking at state results, average scores for most states were unchanged from 2015 in both subjects and at both grades.
Recently Released Reports
How Have Pension Cuts Affected Public Sector Competitiveness?
Center for State and Local Government Excellence
The Costs, Opportunities, and Limitations of the Expansion of 529 Education Savings Accounts
Brookings Institution
Projections of Education Statistics to 2026
National Center for Education Statistics
Wide Variation in Federal Defense Spending from State to State
The Pew Charitable Trusts
New Federal Tax Law Makes It Difficult for States to Provide Accurate Revenue Forecasts
Rockefeller Institute of Government
Economic News
Job Openings at 6.1 Million in February
The number of job openings was little changed at 6.1 million on the last business day of February, according to data recently released by the U.S. Department of Labor (down from 6.2 million in January). Job openings increased for finance and insurance (+69,000) and state and local government education (+31,000) but decreased in accommodation and food services (-91,000), construction (-56,000) and wholesale trade (-38,000). The number of hires was little changed at 5.5 million in February and the hires rate was little changed at 3.7 percent. The number of separations was little changed at 5.2 million. The 3.2 million quits reported in February were essentially unchanged from January; 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 1.6 million. Over the 12 months ending in February, hires totaled 65.6 million and separations totaled 63.3 million, yielding a net employment gain of 2.3 million.
Consumer Price Index Decreased in March as Real Hourly Earnings Increased
The U.S. Bureau of Labor Statistics released new data on the Consumer Price Index for All Urban Consumers (CPI-U) for March, showing the CPI-U decreased 0.1 percent on a seasonally adjusted basis after rising 0.2 percent in February. Over the last twelve months, the all items index increased 2.4 percent before seasonal adjustment. The index for all items less food and energy rose 0.2 percent in March, while the energy index fell sharply due mainly to the 4.9 percent decrease in the gasoline index. The index for all items less food and energy rose 2.1 percent for the 12 months ending March, its largest 12-month increase since the period ending February 2017. Meanwhile, real average hourly earnings for all employees increased 0.4 percent from February to March, seasonally adjusted. This result stems from a 0.3 percent increase in average hourly earnings combined with a 0.1 percent decrease in the CPI-U.