Capitol to Capitol | June 5, 2017

Running Out of Time and Money

As health care, tax reform and the federal budget continue to dominate the time of lawmakers on Capitol Hill, a familiar congressional foe is about to blindside Congress: The debt ceiling.

DYK?

On this day in 1968, former U.S. attorney general, U.S. senator, and presidential candidate Robert F. Kennedy was shot three times at the Ambassador Hotel in Los Angeles shortly after winning the California and South Dakota Democratic presidential primaries. The assassin, Sirhan Sirhan, was a Palestinian who was angered at Kennedy’s support for Israel. On June 6, nearly 26 hours after the shooting, Kennedy died a few blocks from the Ambassador Hotel at Good Samaritan Hospital.

The debt ceiling, or debt limit, is the total amount of money the U.S. government is authorized to borrow to meet its existing legal obligations. The debt limit does not authorize new spending commitments, but rather, allows the government to finance programs already enacted into law. A statutorily imposed debt ceiling has been in effect since 1917, with the enactment of the Second Liberty Bond Act. Before 1917 there was no debt ceiling enforced, but there were parliamentary procedural limitations on the level of possible debt that could be held by the federal government.

When the debt ceiling suspension ended on March 15, the legal cap on U.S. borrowing was set at $19.846 trillion. Since then, the U.S. Department of Treasury has been using special accounting measures to keep debt below that limit to continue paying all the country's bills in full and on time. But those measures only work for so long, and when they run out, the Treasury will not have enough money to cover its bills. (The current federal debt can be found here.)

When the debt ceiling was reinstated in mid-March, lawmakers thought they would have until fall 2017 to act before a government default. But Treasury Secretary Steven Mnuchin is now warning that Congress will need to confront the nation’s debt earlier than expected, urging Capitol Hill leaders to raise the debt ceiling by August. The reason for the accelerated timeline is largely because many wealthy individuals are holding onto assets in hopes that Congress will come through on its promised tax reform. The Congressional Budget Office reported back in May that revenues were running about 3 percent below projections from early this year. Federal data and insights from many tax advisers reveal that some taxpayers are pushing back 2016 income by postponing cashing out on investments and making other financial decisions in hopes that they will pay less later if the White House follows through with its promise to enact tax reform this year.

But before Congress has the chance to enact tax reform, GOP leadership will need to raise the debt ceiling, which is no small task. Mnuchin has asked lawmakers to pass a “clean” increase to the debt ceiling, which is essentially new borrowing with no strings attached. It remains to be seen, however, whether Congress has the appetite for a clean increase. Many on Capitol Hill believe a clean debt limit increase will raise the chances of a fight over the debt limit—not just between Republicans and Democrats, but within both parties.

The GOP is torn over whether to combine spending cuts with raising the debt ceiling. Democrats may soon butt heads over whether they can use this vote as leverage to push for their own concessions because their votes are going to be needed to avoid default. Failure to pass an increase would result in the first ever U.S. default on its debt, which would call into question whether the U.S. government can meet its obligations. While the exact consequences of this are technically unknown, a default could cause a severe economic crisis that could include frozen international credit markets, a spike in interest rates, and a worldwide collapse in stocks.

NCSL Contacts: Max Behlke, Jake Lestock

Washington Braces for Comey’s Testimony on Thursday

On Thursday, the Senate Intelligence Committee will hear public testimony from former FBI Director James Comey about reports that President Donald Trump pressured him to shut down an FBI investigation into former national security adviser Michael Flynn. The hearing is part of the Senate committee’s investigation into Russia’s meddling in the presidential election, including allegations of collusion between Moscow and the Trump campaign. The committee has issued subpoenas to Flynn and sent requests for information and testimony to other current and former Trump associates.

Although the June 8 hearing, which is expected to be broadcast live by the major television networks, has garnered a great deal of interest, it is possible that it may not live up to the hype, and may not even happen at all. For one, it’s unclear how much Comey will be willing to reveal while a separate investigation led by special counsel Robert Mueller is underway. Additionally, White House aides have indicated Trump is weighing whether to assert executive privilege in hopes of blocking the testimony, but at the moment that seems unlikely. Assuming Comey does testify, his comments may dictate the schedule of Congress for the foreseeable future and may prove telling for the prospects of passing important Republican priorities this year

Health Care in Grave Condition

When the Senate adjourned for the Memorial Day week long recess, Republican senators left skeptical over whether or not they could come to agreement on legislation to repeal and replace the Affordable Care Act. When they return today, they will be more doubtful than ever.

DYK?

The phrase “Under God” was added to the Pledge of Allegiance during the Cold War. This symbolized the resistance to communists, who were atheists.

In 1953, Louis Rabaut, a Democrat from Michigan, sponsored a resolution to add the words "under God" to the Pledge, but it failed. However, his fortune changed once President Dwight D. Eisenhower got involved. Recently baptized as a Presbyterian, the president heard a sermon, arguing the words "under God" from Lincoln's speech set the United States apart from others as a nation. At the time, the Cold War was gaining steam, and Eisenhower was fighting communism across the globe.

The next day, the president encouraged Charles Oakman, a Republican also from Michigan, to re-introduce the bill, which Congress passed. Eisenhower signed the bill, H.J. Res 243, into law on June 14, 1954. A story announcing the news in the Washington Post quoted him as saying the new version would add "spiritual weapons which will forever be our country's most powerful resource."

Last Thursday, in an interview with a home state news station, Senator Richard Burr (R-N.C.), a key ally of Majority Leader Mitch McConnell (R-Ky.), said, “I don’t see a comprehensive healthcare plan this year.” Burr’s comments are not a complete surprise, given that they came just a week after McConnell, in an interview with Reuters, said that "I don't know how we get to 50 (votes) at the moment. But that's the goal. And exactly what the composition of that (bill) is I'm not going to speculate about because it serves no purpose.” Senate Republicans had hoped to have a draft bill this week, but it now looks like that any legislative framework will at best be an outline of parameters.

Even if Republicans reach an agreement on a proposal, they will have to face strong headwinds of public disapproval. The Kaiser Family Foundation released a poll on May 31 that underscored the unpopularity of the bill approved by the House. It found that more Americans have an unfavorable view of the House passed American Health Care Act (AHCA) than are favorable (55 percent vs. 31 percent, respectively), and that three-quarters of Americans surveyed think the House bill does not fulfill the president's promises on health care. The poll also found that 82 percent of respondents believed that the federal funding for Medicaid expansion will likely exacerbate an issue that has already deeply divided the Senate GOP.

In the meantime, health insurers, who are worried about what a GOP health care bill would mean for them, have until June 21 to file proposed 2018 rates with the federal government. Some have already announced withdrawal from the individual insurance market for next year, citing major uncertainty about the repeal effort. Other insurers are seeking higher rate hikes to protect themselves against potential chaos in the individual health insurance marketplaces. Until a health care bill is enacted, or declared dead, expect the health insurance market to remain volatile and unpredictable.

NCSL Contacts: Rachel Morgan, Haley Nicholson

House Has CHOICE For Dodd-Frank Repeal

When the House returns this week, one of its first task will be to vote on the Financial CHOICE Act of 2017, which would repeal and replace banking regulations from the Dodd-Frank law. CHOICE, or Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, is an effort to undo much of the 2010 Dodd-Frank law, which was enacted in the wake of the 2007-2008 financial crisis that spurred the Great Recession.  

The legislation is expected to pass the House along a party-line vote after Financial Services Chairman Jeb Hensarling (R-Texas) agreed to remove a controversial section of the bill that would have repealed the debit card swipe fee cap known as the Durbin Amendment. The House bill in its current form is unlikely to pass the Senate, which is more likely to narrow the focus of the legislation. On Thursday, the Senate Banking Committee will begin that process by holding a hearing focused on smaller lenders.

NCSL Contact: Neal Osten

White House Unveils Infrastructure Week

This week, the White House will hold its own Infrastructure Week, which will include several events focused on different infrastructure systems. Earlier today, the president released a set of key legislative principles for moving forward with reform of the nation’s air traffic control (ATC) system. ATC reform is expected to be a major issue of contention as both the House and Senate continue their work to reauthorize the Federal Aviation Administration, whose authority expires at the end of September.

DYK?

The candidate who ran the most times for office of the president of the United States was Norman Thomas. Thomas ran for the presidency on the Socialist Party ticket in six consecutive elections beginning in 1928 and was unsuccessful each time.

On Wednesday, the president will travel to both Ohio and Kentucky to highlight the positive impact of the nation’s system of inland waterways. Finally, on Thursday, the White House will host a group of governors and mayors to discuss roadway and rail infrastructure permitting issues.

As a reminder, late last month, the administration offered a few details on its infrastructure proposals as part of its FY 2018 budget proposal. For more information, see NCSL’s Info Alert.

NCSL Contacts: Ben Husch, Kristen Hildreth 

Public Comments on NAFTA Due by June 12

On Thursday, May 18, Robert Lighthizer, the new U.S. Trade Representative (USTR), officially announced the administration's intent to renegotiate the North American Free Trade Agreement (NAFTA), signaling the start of the required 90-day period of formal consultations with Congress before negotiations can begin, in accordance with the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (also known as TPA). Public comments on NAFTA's negotiating objectives are due by June 12 and the U.S. Trade Representative's office will hold a June 27 public hearing on the upcoming trade talks.

NCSL Contacts: Jon Jukuri, Lucia Bragg

Read the May 22, 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
  • 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