This Week on the Hill
The Senate returns from an abbreviated summer recess on Wednesday, while the House is out until September 4. When the Senate returns, the chamber is expected to continue work on judicial nominations as well as consideration of another spending package, containing the Labor, Health and Human Services and Education and Defense appropriations bills.
Fiscal Year 2019 Budget Update
The Senate is scheduled to consider another spending package this week, encompassing the two largest appropriations bills: Labor-Health and Human Services (HHS)-Education and Defense. The Senate Appropriations Committee approved the $675.0 billion Defense bill (S. 3159) by a vote of 30-1 and approved the $179.3 billion Labor-HHS-Education bill (S. 3158) also by a vote of 30-1. The Labor-HHS-Education bill provides $12.1 billion for the Labor Department (a $92 million decrease from the current year), $71.4 billion for the Education Department (a $541 million increase) and $90.1 billion for HHS (a $2.3 billion increase).
Supreme Court Nomination Hearing to Begin September 4
On Friday Senate Judiciary Chairman Chuck Grassley (R-IA) announced that the hearing for Judge Brett Kavanaugh to serve as an Associate Justice on the U.S. Supreme Court will begin on September 4. According to the press release, the chairman expects the hearing to last 3 to 4 days, with opening statements by Judiciary Committee members and the nominee occurring the first day, followed by the questioning of the nominee and testimony from outside experts and others.
HHS Releases Proposed Rule on Risk Adjustment Payments
Last week the Department of Health and Human Services (HHS) released a proposed rule relating to risk adjustment payments, which were suspended and then reinstated last month. The rule proposes to adopt the risk adjustment methodology that HHS previously established for the 2018 benefit year which uses the statewide average premium in the payment transfer formula. In February a district court vacated the use of the statewide average premium in the methodology for the 2014-2018 benefit years; the decision is currently being reconsidered. The proposed rule further explains the justification for utilizing statewide average premium in the risk adjustment transfer calculation, with public comments due by September 7.
FEMA Announces Hazard Mitigation Funds
The Federal Emergency Management Agency (FEMA) recently announced the fiscal year 2018 application cycle for two grants under the Hazard Mitigation Assistance program. The Pre-Disaster Mitigation Grant Program provides resources to states, tribal governments, territories and local communities in their efforts to implement a sustained pre-disaster natural hazard mitigation program. There is a total of $235.2 million in funds available; a fact sheet can be found here. The Flood Mitigation Assistance Grant Program provides resources to assist states, tribal governments, territories and local communities in their efforts to reduce or eliminate the risk of repetitive flood damage to buildings and structures insurable under the National Flood Insurance Program (NFIP). There is a total of $160 million in funds available; a fact sheet can be found here. The application period for both grants is October 1, 2018 through January 31, 2019 and the notices of funding opportunity can be found on grants.gov.
Treasury Releases Proposed Rule on Pass-Through Entities Under Tax Bill
Last Wednesday the U.S. Treasury Department and Internal Revenue Service issued proposed regulations implementing provisions of the Tax Cuts and Jobs Act (TCJA) that allow owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income (found in Section 199A of the bill). According to the press release, the proposed rules ensure that all small business income below $315,000 for married couples filing jointly ($157,500 for single filers) is eligible for the deduction, provide clarity and flexibility for filers on topics such as aggregation rules and specified service, trade or business income above the thresholds, and establish anti-abuse safeguards to prevent improper tax avoidance schemes. Qualified business income includes domestic income from a trade or business; employee income, capital gains, interest, and dividend income are excluded from this deduction. Comments are due 45 days after the rules are published in the Federal Register.
Reports Find Problems with DATA Act Implementation
Two different reviews recently found problems in implementation of the Digital Accountability and Transparency Act (DATA Act). The 2014 law required standardized reporting of federal spending to be posted on USAspending.gov to provide the public with accurate, consistent and reliable data on federal government spending. First, the Senate Permanent Subcommittee on Investigations issued a bipartisan report on federal agency compliance with the DATA Act, finding that the current version of USAspending.gov fails to achieve its legislative mandate with inconsistent spending data and agency guidance for submitted data weakening data standards. Second, the U.S. Government Accountability Office released a report finding half of the agencies met federal requirements for the implementation and use of data standards.
ETA Announces Dislocated Worker Grants
The Department of Labor’s Employment and Training Administration (ETA) recently announced the availability of up to $100 million for Trade and Economic Transition National Dislocated Worker Grants to provide training and career services to dislocated workers affected by major economic dislocations. Supported by the Workforce Innovation and Opportunity Act (WIOA), these grants provide funding to states, outlying areas, eligible tribal governments and other entities to address events such as job loss or employer/industrial reorganization due to trade or automation; loss, decline or major change of a primary or legacy industry; or other economic transition or stagnation that may disproportionately impact mature workers. Applications are due by September 7 although ETA will fund applications that meet all requirements based on the order ETA receives them, until all funds are depleted. Additional information can be found here.
Administration Releases Model Foster Family Home Licensing Standards
The Department of Health and Human Services (HHS) released a notice for public comment on the proposed National Model Family Foster Home Licensing Standards. The Family First Prevention Services Act, passed in February as part of the Bipartisan Budget Act of 2018, directs the department to “identify reputable model licensing standards with respect to the licensing of foster family homes.” By April 1, 2019, Title IV-E agencies, including all states, must provide HHS specific and detailed information about state foster family home licensing standards. The proposed model standards are categorized into eight categories including foster home eligibility, foster family home health and safety, foster home capacity, foster home sleeping arrangements, emergency preparedness, transportation, training, and foster parent assurances. Comments are due on or before October 1. More information on the Family First Prevention Services Act, which aims to change the way Title IV-E funds can be spent by states, can be found here.
EPA Publishes Superfund Emphasis List Revision
The Environmental Protection Agency (EPA) recently released the next revision of the Administrator’s Emphasis List of Superfund Sites Targeted for Immediate, Intense Action. Eight sites were removed from the emphasis list, leaving 14 Superfund sites on the list from New Hampshire, New Jersey, Virginia, Indiana, Minnesota, Oklahoma, Iowa, Missouri, Colorado, Montana, California, Oregon and Washington. The initial list and last revision were released on December 8, 2017 and April 16, 2018, respectively, in direct response to recommendations from the Superfund Task Force. It is anticipated that this list will be revised quarterly.
Recently Released Reports
Opening Credits: An Introduction to Prior Learning Assessment Policies
Education Commission of the States
The Role of Community Health Centers in Addressing the Opioid Epidemic
Kaiser Family Foundation
Want More Students to Pay Down Their Loans? Help Them Graduate.
Third Way
Local Workforce Development Boards and Child Care
Urban Institute
Economic News
Job Openings See Little Change in June
The number of job openings was little changed at 6.7 million on the last business day of June, according to data recently released by the U.S. Department of Labor. Job openings increased in June for educational services (+20,000), financial activities (+35,000), and construction (+10,000) but decreased in transportation, warehousing and utilities (-84,000) and information (-13,000). The number of hires was little changed at 5.7 million in June and the hires rate was down slightly at 3.8 percent. The number of separations was little changed at 5.5 million. The 3.4 million quits reported in June were down slightly from 3.5 million in May; many economists closely watch the number of quits as a measure of employee confidence in finding another job. Finally, layoffs and discharges increased to 1.7 million (up from 1.6 million in May). Over the 12 months ending in June, hires totaled 66.6 million and separations totaled 64.1 million, yielding a net employment gain of 2.5 million.
CBO Releases Long-Term Budget Outlook Under Alternative Fiscal Policies
The Congressional Budget Office (CBO) recently released a report on the long-term budget outlook under alternative fiscal policy scenarios. Under the current extended baseline projections, federal debt held by the public rises from an amount equal to 78 percent of Gross Domestic Product (GDP) in 2018 to 118 percent of GDP in 2038. In this new report, CBO considers how the federal budget and the nation’s economy would evolve under three alternative scenarios; in those scenarios, laws would be changed to continue certain policies now in place, leading to even higher debt. Changes such as maintaining the individual income tax provisions in the Tax Cuts and Jobs Act (currently set to expire in 2026) and increasing discretionary spending would increase debt levels above the current baseline.