Capitol to Capitol | Aug. 28, 2017

Federal Funding Is About to Hit A Wall   

As Hurricane Harvey continues to ravage the Texas Gulf Coast, Washington is bracing for a political storm over government funding that will begin in earnest when Congress returns from its August recess next week. In addition to having to reauthorize the Children’s Health Insurance Program (CHIP), the National Flood Insurance Program (NFIP), and the Federal Aviation Administration (FAA) by Sept. 30, Congress will have to pass a government funding package by the end of September to avoid a shutdown and will also have to raise the debt ceiling to avoid a government default. President Donald Trump has requested meetings next week with Senate Majority Leader Mitch McConnell and Speaker Paul Ryan, as well as their Democratic counterparts, to talk strategy for September, which will likely include a discussion of a federal aid package to pay for billions of dollars of damages inflicted by Hurricane Harvey. Federal funding for Harvey, however, may be contentious, given that 180 Republicans, including most of the Texas delegation, voted against a similar relief package in 2013 for victims of Superstorm Sandy. 

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On this day in 1963, the Reverend Martin Luther King Jr. gave his “I Have a Dream Speech”—one of the most famous speeches in American history. The address, which became a defining moment of the civil rights movement, was delivered on the steps of the Lincoln Memorial to over 250,000 people who had traveled to the nation’s capital for the March on Washington for Jobs and Freedom.  

Republican leaders in both chambers understand that any missteps in September could doom the chances of passing tax reform this year, or even this Congress. Last week, House Ways and Means Tax Policy Subcommittee Chairman Peter Roskam said that Ryan is "trying" to "clear a pathway" to tackle the policy obstacles in September to deliver on tax reform. But given that Congress is slated to only be in session for 12 days in September, the outcome is anything but certain.

Budget: The House passed HR3219 on July 27, which included four of the 12 regular FY2018 appropriations bills. The legislation also included the Department of Homeland Security Border Infrastructure Construction Appropriations Act, which provides funding for the construction of fencing and a wall along the Southern border, a nonstarter for congressional Democrats whose votes are likely needed to pass the final package. (On Aug. 22, Trump threatened a government shutdown if the spending bill did not fund the construction of a border wall.) The House is expected to work on the remaining measures to fund the federal government when lawmakers return from recess the first week of September. The final package, however, will likely violate the Budget Control Act and is therefore unlikely to get the 60 votes in the Senate needed to make it to the floor.

Regardless of whether or not the House passes a spending package in September, Ryan does not think the Senate will have enough time to clear each of the spending bills, chiefly due to the slower Senate process and also because the Senate will be using a lot of floor time to confirm the backlog of Trump administration nominations. “It will take more time for the Senate to process these bills. So I would absolutely anticipate we’re going to have to have an [short-term budget] extension so that we can process all these bills,” Ryan told CNBC. A short-term extension, possibly through the end of the calendar year, would ensure that the government doesn’t shut down at the end of September, but may just delay the inevitable policy fights.

Debt Ceiling: If Congress does not raise the federal government’s borrowing limit by October, it may reach a point where it can no longer pay its bills. Treasury Secretary Steven Mnuchin has said that the U.S. will hit the debt limit by Sept. 29, one day before the government funding deadline. Congress must first decide how high to raise the debt ceiling, and then determine whether the increase will be “clean” or if it will have additional policy riders. The White House and Mnuchin have called for a clean debt ceiling measure, but conservative groups, including FreedomWorks, have rejected that plan and signaled that conservatives will not support a clean increase without also attaching spending cuts. The inclusion of policy riders, however, will make passage of a debt limit increase less palatable for members of congress, including Democrats, whose votes may be necessary for passage.

NCSL Contacts: Max Behlke, Jake Lestock

NAFTA Renegotiation Begins in Washington, D.C.

Representatives from Mexico, Canada and the U.S. met Aug. 16 for the first of a series of meetings to renegotiate the North American Free Trade Agreement (NAFTA).

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After 9/11, bollards—sturdy, short, vertical posts—were installed on Capitol Hill that reportedly can stop “an eight-ton truck barreling into them at 50 mph.” At a cost of $7,500 each to install, the 7,000 Capitol bollards run along a perimeter of roughly 29,000 feet (5.5 miles) protecting the U.S. Capitol, the Senate and House office buildings, the U.S. Supreme Court, and the three buildings of the Library of Congress.

U.S. Trade Representative Robert Lighthizer, Canadian Foreign Affairs Minister Chrystia Freeland and Mexican Secretary of the Economy Ildefonso Guajardo released a brief joint statement shortly after the meeting that the countries made “detailed conceptual presentations,” started developing texts, and have engaged a wide range of stakeholders in the private sector, labor groups, legislative representatives, and state/provincial officials. The statement did not provide details on the subjects or takeaways of the conversation.

Generally, Mexico and Canada have indicated an interest in preserving NAFTA as is, especially regarding duty-free trade, and in updating the agreement in some areas such as e-commerce. As for the U.S., the Trade Representative’s office last month released a summary of NAFTA renegotiation objectives that outline a range of priorities from trade deficit reduction to conditions for trade in services. According to the statement, negotiators are scheduled to reconvene Sept. 1-5 in Mexico, followed by a meeting later that month in Canada and then back to Washington in October.

NCSL Contact: Jon Jukuri, Lucia Bragg

Federal Flood Insurance Expires at the End of September

Hurricane Harvey pummeled southeast Texas and notably Houston over the weekend, destroying buildings and causing widespread power outages due to heavy rainfall and “unprecedented” flooding. To add insult to injury, Harvey’s destruction, which will cost tens of billions of dollars to repair, is happening eerily close to the National Flood Insurance Program’s Sept. 30 expiration. Congress is struggling to keep the program alive. Coastal state Republicans have been diverging from their party to team up with Democrats to salvage an agreement to keep the National Flood Insurance Program (NFIP) alive.

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Since as far back as the Monroe administration, but with much more consistency since President John Kennedy, presidents have issued signing statements when they sign bills into law, including constitutional challenges to various sections. Presidents are often saying that if push comes to shove during implementation of the law, the administration will side with its own view of the Constitution. Critics of signing statements, like the American Bar Association, argue that presidents are ignoring the intent of Congress and should simply veto the bill if it presents constitutional problems.

The NFIP aims to reduce the impact of flooding on private and public structures by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations. While it has worked to protect millions of Americans from the financial risks of flooding, the program has also racked up almost $25 billion in debt, mostly in recent years from expensive disasters such as Hurricane Katrina and Superstorm Sandy. Now, lawmakers are at odds over how to improve the insurance program’s bottom line. The key source of tension is to what extent homeowners should pay higher rates to put the program on stronger financial footing. This past month, 26 Republicans from states including New York, Texas, Mississippi and Florida have fought proposals by the House Financial Services Committee saying that changes would make flood insurance unaffordable for their constituents.

Congress already has let the federally run flood insurance program lapse three times in recent years, complicating coverage for people who are trying to sign up, file for renewal, or seek more coverage. “The NFIP must be reauthorized in a meaningful way that addresses the fundamental business model of the program,” said Brock Long, the Federal Emergency Management Agency (FEMA) administrator who oversees the NFIP. “A lapse … would have a major impact on Americans across the country.” So as Texas begins the arduous path of rebuilding, Congress will also need to dig itself out of the numerous problems it must address next month including the insurance program, funding the government, raising the debt limit and reauthorizing the Federal Aviation Administration.

NCSL Contact: Ethan Wilson

Read the Aug. 21, 2017 Capitol-to-Capitol. 

If you have comments or suggestions regarding Capitol-to-Capitol, please contact Max Behlke.

NCSL's Advocacy in Washington

NCSL's Washington staff advocate Congress, the White House, and federal agencies on behalf of state legislatures in accord with the policy directives and resolutions that are recommended by the NCSL Standing Committees and adopted by the full conference at the annual NCSL Legislative Summit Business Meeting. As a result of the advocacy that is guided by these policies positions, NCSL is recognized as a formidable lobbying force in state-federal relations.

NCSL Staff in Washington, D.C.

  • Neal Osten | 202-624-8660 | Molly Ramsdell | 202-624-3584 | Directors
  • Max Behlke | 202-624-3586 | Budgets and Revenue
  • Danielle Dean | 202-624-8698 | Communications, Financial Services 
  • Ethan Wilson | 202-624-8686 | Commerce and Financial Services 
  • Rachel Morgan | 202-624-3569 | Health and Human Services
  • Jon Jukuri  | 202-624-8663 | Labor, Economic Development and International Trade
  • Susan Frederick | 202-624-3566 | Law, Criminal Justice, and Public Safety
  • Ben Husch | 202-624-7779 | Natural Resources and Infrastructure