This Week on the Hill
The House and Senate are in recess this week and will return the week of July 9th.
Year 2019 Budget Update
The Senate Appropriations Committee completed its work last week by passing the final two appropriations bills, and also passed the first spending package on the floor. The House postponed work on the Labor-Health-Education spending bill until after the July 4th recess.
- Senate Spending Package: The Senate voted 86-5 to approve a three-bill, $146.6 billion spending package (H.R. 5895) that covers the Energy-Water, Legislative Branch, and Military Construction-Veterans Affairs appropriations bills. Unlike the House version, the Senate version did not include contentious policy riders, including one to repeal the Waters of the United States, or WOTUS, rule. The bill now moves to committee to reconcile differences.
- Senate Labor-Health and Human Services-Education: The full Appropriations Committee voted 30-1 to advance a $179.3 billion spending measure, which is an increase of $2.2 billion over the fiscal year 2018 enacted level. The bill provides an additional $145 million to fight opioid abuse, an increase of $250 million for Head and adds $195 million for mental health treatment, prevention and research. The Ranking Member’s summary is here.
- Senate Defense: The full Appropriations Committee voted 30-1 to advance a $675 billion bill, an increase of $20.4 billion over year 2018. The recommendation provides $607.1 billion in base funding and $67.9 billion for Overseas Contingency Operations funding. The Ranking Member’s summary is here.
Senate Passes Farm Bill
On Thursday the Senate voted 86-11 to approve the farm after the House had passed their version a week earlier on a vote of 213-211. Unlike the House version, the Senate’s farm bill does not increase work requirements for the Supplemental Nutrition Assistance Program (SNAP) or tighten eligibility. The bill does include provisions that would legalize industrial hemp production, extend the National Flood Insurance Program through January 31, 2019, and allow some grazing on land contracted under the Conservation Reserve Program. Additional information on amendments and bill text can be found here. The farm bill would authorize and set policies for farm, conservation, crop insurance, nutrition, rural development and other programs for fiscal years 2019-23; the current farm bill expires September 30. After passage in both chambers, a conference committee will be needed to reconcile differences between the two versions.
EPA Explores Changes to Clean Water Permits
On Wednesday, Environmental Protection Agency Administrator Scott Pruitt issued a memorandum regarding the agency’s role in permitting discharges of dredged or fill materials under the Clean Water Act. Current regulations under section 404(c) of the Clean Water Act allow the EPA to veto a permit issued by the Army Corps of Engineers or an approved state that allows for the discharge of dredged or fill material at specified disposal sites. The memo instructs the Office of Water to develop proposed rulemaking that would consider the following changes: eliminate EPA’s “preemptive” and “retroactive” veto authority; require a regional administrator to obtain approval from EPA headquarters before initiating the section 404(c) process; require a regional administrator to review and consider certain documents before publishing notice of a proposed determination; and require EPA to publish and seek public comment on a final determination before such a determination takes place. The memorandum can be found here.
USDA Releases New SNAP Payment Error Rates
Last week the U.S. Department of Agriculture (USDA) released new data on improper payments in the Supplemental Nutrition Assistance Program (SNAP). The national SNAP benefit payment error rate – a measure of both overpayments and underpayments made by all states nationwide – in fiscal year 2017 was 6.3 percent. This is an apparent increase over the 3.66 percent reported for fiscal year 2014, believed to be largely the result of the improved measurement procedures implemented by the Food and Nutrition Service (FNS) to improve the accuracy of the data, rather than an actual increase in improper payments. The rates – which are assessed at the state level and analyzed to determine a national rate – measure state agencies’ accuracy in issuing SNAP benefit payments to program participants. They reflect the sum total of underpayments and overpayments by states and do not necessarily represent fraud by program recipients. The state-by-state rates can be found here.
Senate Committee Approves Career and Technical Education Bill
Last Wednesday the Senate Health, Education, Labor Pensions Committee approved bipartisan legislation to reauthorize the Carl D. Perkins Career and Technical Education Act. The legislation would increase the state set-aside by approximately $60 million per year, ensure alignment of Perkins with the Workforce Innovation and Opportunity Act (WIOA) and guarantee a role for governors in the administration of the law. The House passed its bipartisan bill, H.R. 2353, last year.
CMS Releases Medicaid Program Integrity Strategy
The Centers for Medicare and Medicaid Services (CMS) announced new or enhanced Medicaid program integrity measures to provide more oversight of Medicaid spending. The initiatives include stronger audit functions, increased beneficiary eligibility oversight, and enhanced enforcement of state compliance with federal rules. Under the plan, CMS will begin targeted audits of some states’ managed care organization financial reporting and will be checking to make sure claims experience matches what plans have been reporting. CMS will also initiate audits of state beneficiary eligibility determinations in states previously reviewed by the Office of Inspector General. CMS notes that total Medicaid spending increased from $456 billion in 2013 to an estimated $576 billion in 2016 with the federal share increasing from $263 billion to an estimated $363 billion during the same period.
FTA Awards $264 Million in Bus Infrastructure Grants
The U.S. Department of Transportation Federal Transit Administration (FTA) recently announced $264 million in grants under the Buses and Bus Facilities Infrastructure Investment Program. The total funding includes $226.5 million from year 2017 and $37.9 million from year 2018 appropriations. Over 450 project proposals from 53 states and territories totaling approximately $2 billion in federal funds were submitted; 139 projects were chosen to receive funding. FTA also recently announced the opportunity to apply for approximately $366 million in year 2018 grant funding, with applications due by August 6.
Recently Released Reports
To What Extent Does Your State Rely on Sales Taxes?
Tax Foundation
Public Funding for Job Training at the State and Local Level
Urban Institute
School Leadership: A Primer for Policymakers
Education Commission of the States
2018 KIDS COUNT Data Book
The Annie E. Casey Foundation
Economic News
CBO Projects Federal Debt to Hit Record Levels in Next 30 Years
The Congressional Budget Office released its annual long-term budget projections, looking at projections of what federal spending, revenues, deficits, and debt would be for the next 30 years if current laws did not generally change. Federal debt, currently at 78 percent of gross domestic product (GDP), is projected to approach 100 percent of GDP by the end of the next decade and 152 percent by 2048. Annual budget deficits would rise from 3.9 percent of GDP in 2018 to 9.5 percent in 2048; the large deficits would arise because spending would grow steadily under current law and revenues would not keep pace with that spending growth. Revenues are projected to be roughly flat over the next few years relative to GDP, rise slowly, and then jump in 2026 as most of the provisions of the Tax Cuts and Jobs Act that directly affect the individual income tax rate are set to expire at the end of calendar year 2026.
Estimate Shows GDP Increase Was Lower for the 1st Quarter of 2018
Recently released data from the Department of Commerce Bureau of Economic Analysis shows that real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2018. domestic product is the value of the goods and services produced by the nation’s economy less the value of goods and services used up in production. This information is based on the “third” estimate, which is derived from more complete source data than were available for the “second” estimate issued last month, which showed an increase of 2.2 percent. For the third estimate of the first quarter, the general picture of economic growth remains the same while private inventory investment and personal consumption expenditures were revised down. In the fourth quarter of 2017, real GDP increased 2.9 percent.