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May 29, 2018 - Washington Report

By Leah Wavrunek posted 05-29-2018 03:17 PM

  

This Week on the Hill

The House and Senate are in recess this week, returning the week of June 4.

 

Fiscal Year 2019 Budget Update

Both chambers of Congress continued to advance spending bills last week, with votes taken at both the subcommittee and full committee levels. The House and Senate also released their “302(b)” allocations, which set the topline spending amounts for each appropriations bill.

  • House Appropriations 302(b) allocations: Adopted on a party-line vote of 29-22, spending increases were directed mainly to defense, homeland security and veterans’ programs while health and education and environmental programs were level funded.
  • Transportation-Housing and Urban Development: The House Appropriations Committee voted 34-17 to provide $71.8 billion in discretionary spending, which is an increase of $1.5 billion above the fiscal 2018 enacted level. The committee report released last week in advance of the vote requires the administration to select another round of participants in the drone pilot program, requiring the Department of Transportation to select new states, tribes, or other local governments by the end of 2018.
  • Financial Services: The $23.4 billion spending measure was approved by the House subcommittee on Thursday; the funding level is equal to the fiscal 2018 enacted level. An increase of $186 million was provided to the Internal Revenue Service and the bill includes $415 million for the Office of National Drug Control Policy.
  • Senate Appropriations 302(b) allocations: Adopted by a 31-0 vote by the Senate Appropriations Committee, the allocations ensure each of the spending bills would get an increase over the current year.
  • Agriculture: The full Senate Appropriations Committee voted 31-0 to approve the bill, which provides $23.24 billion in discretionary funding, an increase of $225 million above the fiscal 2018 enacted level. The bill includes $1.25 billion for rural water and waste program loans, $425 million for the rural broadband loan and grant pilot program, and $73.22 billion in mandatory spending for the Supplemental Nutrition Assistance Program (SNAP). Due to declining SNAP enrollment, this is $794 million below the fiscal 2018 level. The Democratic bill summary can be found here.
  • Energy-Water: The full Senate Appropriations Committee voted 30-1 to approve the bill, which provides $43.77 billion, an increase of $566 million above the fiscal 2018 enacted level. The bill provides $6.927 billion to the Army Corps of Engineers (an increase of $100 million) and $1.49 billion to the Bureau of Reclamation (an increase of $498 million above the budget request). The Democratic bill summary can be found here.

After returning from recess, the House plans to take up a three bill “minibus” appropriations package (H.R. 5895) that includes the Energy-Water, Military Construction-VA, and Legislative Branch spending bills.

 

IRS Releases Notice to States on SALT Provisions

Last Wednesday the Internal Revenue Service (IRS) released a notice intended to inform taxpayers that “the Treasury Department and IRS intend to propose regulations addressing the federal income tax treatment of certain payments made by taxpayers for which taxpayers receive a credit against their state and local taxes.” The Tax Cuts and Jobs Act limits an individual’s deduction for state and local taxes to $10,000 and in response some states are considering or have adopted bills that attempt to maximize taxpayers’ deductibility through other means. The notice states that proposed regulations will assist taxpayers in understanding the relationship between the federal charitable deduction and the new statutory limitation on the deduction for state and local tax payments. The notice did not include a possible timeline for release of the proposed regulations.

 

Ways and Means Approves TANF Overhaul Bill

On Thursday the House Ways and Means Committee voted 22-14 to advance H.R. 5861, the JOBS for Success Act. The bill reauthorizes the Temporary Assistance for Needy Families (TANF) program for five years, as well as child care and related programs, while renaming the TANF program as the Jobs and Opportunity with Benefits and Services (JOBS) program. Significant changes in the bill include: giving states more flexibility and making them accountable for work outcomes; establishing a dashboard with state profiles; requiring funds go to families under 200 percent of the poverty line; allowing up to 50 percent of a state’s allocation to be transferred to the Child Care and Development Fund, child welfare (up to 10 percent) and workforce programs under the Workforce Innovation and Opportunity Act; and prohibiting states from spending federal moneys on state social services spending. A summary can be found here and a section-by-section analysis here; the bill text can be found here. The current TANF program’s authorization expires on September 30.

 

House and Senate Committees Advance Water Infrastructure Bills

Committees in both chambers advanced water infrastructure bills last week. The House Transportation and Infrastructure Committee advanced a bill (H.R. 8) by voice vote; the bill includes authorization of $2.5 billion for seven projects. The bill text can be found here and a section-by-section summary can be found here. The Senate Environment and Public Works Committee voted 21-0 to advance S. 2800, America’s Water Infrastructure Act of 2018. The bill sets a goal of completing feasibility studies within two years and authorizes the Environmental Protection Agency (EPA) to provide grants to small and medium water systems for training and technical assistance. The bill also extends through fiscal year 2020 the current annual $100 million authorization for the Water Infrastructure Finance and Innovation Act (WIFIA) and extends WIFIA lending terms to the drinking water and clean water state revolving funds. Bill text can be found here and a section-by-section summary here.

 

President Signs Banking Bill, Includes Municipal Bond Provision

Last week the House voted 258-159 to approve a bill (S. 2155) that included the first significant overhaul of the Dodd-Frank Act banking rules passed after the 2008 financial crisis; the President signed the bill into law on Thursday. The bill exempts dozens of regional banks from tighter regulation by raising the threshold for closer oversight from $50 billion to $250 billion in assets, loosens appraisal requirements for certain mortgage loans and broadens the definition of qualified mortgages. Of import to states, the bill requires banking regulators to treat certain investment grade municipal securities as 2B High Quality Liquid Assets (HQLA) for purposes of liquidity coverage ratio.

 

Rescissions Bill Introduced in Senate

Last week a group of Republican Senators introduced legislation (S. 2979) that would rescind the $15 billion in unspent funding identified by the White House on May 8. The Congressional Budget and Impoundment Act of 1974 authorizes the President to send a rescission message to Congress specifying the accounts, programs and amounts to be rescinded; funds are locked down for 45 days allowing Congress to either approve, modify, or ignore the President’s rescission request. The details of the $15 billion rescission package can be found here. No floor vote has been announced in the Senate and the House has yet to schedule a vote on its rescission bill (H.R. 3). Contentious provisions in the rescissions package include spending cuts to funding to combat the spread of the Ebola virus overseas and for the Children’s Health Insurance Program.

 

HHS Releases Proposed Rule on Title X Funding

The U.S. Department of Health and Human Services recently released a proposed rule to revise its Title X regulations to ensure none of the funds appropriated for family planning are used in programs where abortion services are offered. Under current regulations, Title X funds can be used at a clinic that offers abortion services, but the funds cannot be used to cover those services. The proposed rule would prohibit recipients from using Title X funds to perform, promote, refer for, or support abortion as a method of family planning, prevent Title X providers from sharing physical resources such as building space and personnel with providers offering abortion services, and tighten reporting requirements for Title X grantees. Comments will be due 60 days after the proposed rule is published in the Federal Register.

 

House and Senate Pass Several Bills Prior to Recess

Prior to adjourning for a one-week recess, the House and Senate passed several bills, some of which were sent to the President for his signature. On Tuesday the House voted 250-169 to approve S. 204, known as the Right to Try bill. The measure would allow patients to directly petition drug manufacturers for access to treatments that received initial approval and are going through clinical trials, bypassing the current requirement that the Food and Drug Administration must sign off before patients can obtain an experimental drug. The bill is expected to be signed by the President. On Wednesday the Senate voted 92-5 to approve S. 2372, which combines the Department of Veterans Affairs’ seven community care programs and extends the VA Choice Program, while providing the program an additional $5.2 billion. The President is also expected to sign this bill. Finally, on Tuesday the House voted 360-59 to approve a prison reform bill (H.R. 5682) that would provide training programs for federal prisoners with a goal of reducing recidivism rates; it is unknown if the Senate will take up the bill or move forward with its own legislation.

 

FEMA Announces Availability of FY2018 Preparedness Grants

Last week the U.S. Department of Homeland Security and Federal Emergency Management Agency (FEMA) announced the release of fiscal year 2018 Notices of Funding Opportunity for eight preparedness grant programs totaling more than $1.6 billion. The grant programs provide funding to state, local, tribal, and territorial governments, as well as transportation authorities, nonprofit organizations, and the private sector, to improve the nation’s readiness in preventing, protecting against, responding to, recovering from and mitigating terrorist attacks, major disasters and other emergencies. Grant programs covered by the notice of funding opportunity include: Emergency Management Performance Grant, Homeland Security Grant Program, Tribal Homeland Security Grant Program, Nonprofit Security Grant Program, Intercity Passenger Rail – Amtrak Program, Port Security Grant Program, Transit Security Grant Program and Intercity Bus Security Grant Program.

 

Treasury Adds New Opportunity Zone Designations

The Treasury Department recently updated the list of designated Qualified Opportunity Zones, with the list now current through May 18. The update designated qualified opportunity zones in an additional 30 states and two territories under the Opportunity Zones Program contained in the Tax Cuts and Jobs Act. The program allows investors to receive tax incentives on unrealized capital gains that are invested in “Opportunity Funds,” which are dedicated to investing in low-income areas designated as qualified opportunity zones. Frequently asked questions about Opportunity Zones can be found here.

 

EPA Holds Summit on Contaminated Water, Administrator Announces Next Steps

The Environmental Protection Agency (EPA) held a two-day, national leadership summit last week on water contamination from per-and polyfluoroalkyl substances (PFAS). PFAS are a group of manmade chemicals that are found in a wide range of consumer products such as cookware, pizza boxes, stain repellants, and firefighting foam; according to the EPA, there is evidence that exposure to PFAS can lead to adverse health outcomes in humans. The summit last week included representatives from over 40 states, tribes, and territories, along with federal agencies, associations, industry groups and non-governmental organizations. EPA stated staff would visit communities impacted by PFAS, including New Hampshire and Michigan, and also announced next steps the agency will take following the summit. More information on PFAS can be found here.

 

Recently Released Reports

Implications of the ACA Medicaid Expansion: A Look at the Data and Evidence

Kaiser Family Foundation

States Taxing Sports Betting: Lessons From Other Revenue Streams

Tax Foundation

The Condition of Education 2018

National Center for Education Statistics

People in Prison in 2017

Vera Institute of Justice

 

Economic News

 

Real State Personal Income Saw Slower Growth in 2016

Real state personal income grew on average 1.1 percent in 2016, after increasing 4.7 percent in 2015, according to estimates recently released by the U.S. Department of Commerce Bureau of Economic Analysis. Real state personal income is a state’s current-dollar personal income adjusted by the state’s regional price parity and the national personal consumption expenditures price index. The percent change in real state personal income ranged from 3.3 percent to -3.6 percent. Across metropolitan areas, the percent change ranged from 6.6 percent to -8.1 percent. Overall, eight states had declining real personal income. Regional Price Parities (RPPs) measure the differences in price levels across states and metropolitan areas for a given year and are expressed as a percentage of the overall national price level. All items RPPs cover all consumption goods and services, including rents. Areas with high/low RPPs typically correspond to areas with high/low price levels for rents.