Capitol to Capitol | May 22, 2017

CBO Health Care Score Due Wednesday

DYK?

Abraham Lincoln is the only president to have obtained a patent: After being aboard a steamboat that ran aground on low shoals and had to unload its cargo, Lincoln, who loved tinkering with machines, designed a method for keeping vessels afloat when traversing shallow waters by using empty metal air chambers attached to their sides. For his design, Lincoln obtained Patent No. 6,469 on May 22, 1849.

The Congressional Budget Office (CBO) is expected to release its analysis of the House-passed version of the health care overhaul, the American Health Care Act of 2017 (AHCA) on Wednesday. CBO’s analysis of the original House legislation, which was ultimately pulled from consideration before a vote, estimated the number of people without health insurance would increase by 24 million by 2026 and would reduce federal deficits by $150 billion over 10 years.

The updated health bill was amended to allow states to apply for waivers from key Affordable Care Act  provisions that mandate which services insurance plans must cover and requiring insurers to charge people in a given region the same premiums regardless of a pre-existing condition. Perhaps the most significant aspect of the CBO score will verify whether it will adhere to Senate reconciliation procedures, which Republicans are using to bypass a Democratic filibuster. If the CBO analysis signals that the bill does not meet the Senate reconciliation requirement that the legislation save $2 billion over 10 years, it’s possible the House-passed legislation will again have to be amended and then be considered by the House.

Last Tuesday, NCSL staff met with the majority and minority staff of the Senate Finance Committee, which is working on rewriting the Medicaid provisions of the AHCA. The majority staff confirmed that the Senate Republicans favor overhauling Medicaid to a per capita cap system, but are still developing a formula and administrative procedures. Moreover, the meetings reflect bipartisan consensus that if a health care rewrite is not completed before the August recess, a full health care overhaul will not take place this year, given the full legislative schedule that will await Congress when it returns from its summer break.

Action Item: It is important that states provide comments to the Finance Committee and to their senators ASAP to ensure their state’s perspective is included. NCSL will also be surveying states and will provide the final survey to the Senate Finance Committee so it has a comprehensive document of state perspectives on Medicaid. If you have any questions or comments, please contact Rachel Morgan, NCSL’s Health and Human Services Committee director. 

NCSL Contact: Rachel Morgan

President’s Budget Expected Tuesday

President Donald Trump will release his first formal budget proposal Tuesday for Fiscal Year 2018, which begins on Oct. 1. The proposed budget will spare the two largest drivers of future spending, Medicare and Social Security, but is expected to propose trillions in cuts for the remaining programs.

DYK?

The Smithsonian Institution is the world’s largest museum, education, and research complex, with 19 museums and the National Zoo. The Institution was founded in 1846 with funds from the Englishman James Smithson (1765–1829). Per his wishes, the funds were given “under the name of the Smithsonian Institution, an establishment for the increase and diffusion of knowledge.”

Smithsonian Facts: 154 million artifacts, works of art, and specimens in the collections

-145 million of which are held by the National Museum of Natural History.
-10 million digital records available online through the Collections Search Center.
-2 million library volumes held by Smithsonian Libraries.
-156,830 cubic feet of archival material held by Archives across the Smithsonian.
-Only a small portion of the Smithsonian’s collections (estimated at less than 2 percent) are on display in the museums at any given time.

This week’s budget will expand upon the outline released in March, known as the skinny budget. The skinny budget recommended a 28 percent reduction in the State Department's budget; proposed major spending reductions for the departments of Commerce, Agriculture, Energy, Transportation, and Housing and Urban Development; and would reduce funding of the Environmental Protection Agency by 31 percent. Additionally, the budget is expected to reduce $800 billion of funding for Medicaid over 10 years, which comports with the House-passed health care legislation.

It is also anticipated that the proposal will provide more funding details around campaign promises, including a new paid leave entitlement for parents and a boost in security measures along the U.S.-Mexico border. These proposed cuts would pay for a nearly 10 percent boost or $54 billion increase in defense spending.

The administration has also said the budget proposal will reportedly include $200 billion for infrastructure projects over 10 years. Several outlets reported last week  the budget is also expected to presume that an overhaul of the tax code will be revenue-neutral, a feat that will be hard to achieve as the administration has made it clear that it wants to pass a historic tax cut.

Along with the battle over program funding that is bound to happen, another controversial element of the budget will be the administration’s growth forecasts. The White House projects the nation’s economic growth rate will rise to 3 percent by 2021, compared to the 1.9 percent forecast under current policy by the Congressional Budget Office. These aggressive growth assumptions could undermine the administration’s ability to sell its agenda to Congress. William Hoagland, a former congressional Republican budget aide who now works for the Bipartisan Policy Center said, “I am extremely pessimistic that you can show a balanced budget unless you’re going to make the mother of all ‘rosy scenario’ type assumptions.”

Many believe the president’s proposal will be just that—a blueprint, with Congress highly unlikely to pass anything resembling it. But it will set the stage for the spending fights ahead. Republicans have already expressed concerns about some of Trump's proposed cuts and House Democrats are warning the budget is a recipe for a government shutdown. House Appropriations Committee member Mike Simpson (R-Idaho) has already predicted that Trump’s budget will kill any chances of passing a spending bill that isn’t a continuing resolution this year saying, "The rest of the appropriators and chairmen will probably kill me, but I think we're into a CR for 2018.” Simpson said infighting over the president’s proposed spending cuts could make it politically impossible for the GOP to find a path forward on fiscal 2018 appropriations bills, which are due in September.

NCSL will release an analysis of the administration’s FY 18 budget proposal later this week.

NCSL Contacts: Max Behlke, Jake Lestock

USTR Confirmation Clears the Way for NAFTA

Following confirmation of Robert Lighthizer as U.S. Trade Representative (USTR), the Trump administration moved to formally reopen the North American Free Trade Agreement (NAFTA) when it sent a formal letter of intent to Congress on May 18. The submission marks the beginning of a 90-day waiting period that is required before negotiations can begin.

The letter is concise, noting the shared interests of the United States, Mexico and Canada while outlining some areas for reconsideration. It identifies workers’ rights, intellectual property rights, state-owned enterprises, food safety, digital trade, customs procedures, and environmental protection as areas in need of improvement. In a joint press conference last week with Secretary of State Rex Tillerson, Mexican Foreign Minister Luis Videgara cautioned that NAFTA renegotiations would need to remain “trilateral in nature” but that he also considers reopening the deal a “significant net positive for the Mexico-U.S. relationship.” USTR has indicated it will publish a notice in the Federal Register requesting public input on the direction, focus, and content of the negotiations, which are set to begin no earlier than Aug. 16.

NCSL Contacts: Jon Jukuri, Lucia Bragg

Secretary Mnuchin and the Export-Import Bank

DYK?

Donald Trump was the 44th person to become president of the United States, but he became the 45th President because the office was held twice by Grover Cleveland (terms 1885–1889 and 1893–1897), being the 22nd and 24th president.

Treasury Secretary Steven Mnuchin expressed clear support from the administration for the Export-Import Bank at a Senate Banking Committee hearing on May 18. The Export-Import Bank of the United States (Ex-Im) is the official export credit agency of the United States. Ex-Im is an independent, self-sustaining executive branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services.

Referring to the bank as “an important tool,” Mnuchin said the president has proposed adding new members to the bank in part so that it may make loans greater than $10 million to small businesses. The praise was welcome clarity for supporters of the Ex-Im Bank, given Trump last month tapped former Representative Scott Garrett (R-N.J.), an outspoken critic of the agency, to be its president. Garrett’s confirmation is expected this spring or summer, though no date has been set.

NCSL Contacts: Jon Jukuri, Lucia Bragg

NCSL Plays Important Role in House’s New Intergovernmental Task Force

Last Thursday, Speaker Paul Ryan (R-Wisc.) and Democratic leader Nancy Pelosi (D-Calif.) announced the creation of the Speaker’s Task Force on Intergovernmental Affairs, a bipartisan group of lawmakers focused on balancing the interests between federal, state, tribal, and local governments. The speaker released the following statement:

“Federalism is not a Republican or Democrat principle, but an American principle—and one that is integral to a thriving culture and economy. But in recent years, the principle of federalism has been slowly chipped away at by an overzealous federal government. Under Chairman Bishop’s leadership, the Task Force on Intergovernmental Affairs will study ways to restore the proper balance of power between the federal government and states, tribal, and local governments, and eliminate unnecessary regulatory burdens facing communities across the nation.”

Mission

The mission of the task force is to balance the interests of governments, examine the effects of federal rules and regulations on state and local partners and provide a forum for state and local groups to showcase their innovation and creativity in solving public policy issues. NCSL was appointed, along with the other six major state and local groups, as a member of the Advisory Council to the Task Force and will be representing your voice on the federal level. For full task force membership and goals, click here.

NCSL Contacts: Neal Osten, Molly Ramsdell

Important Tax Reform Hearing Set for Tuesday

House Republicans continued their push to gain momentum on rewriting the tax code with their first committee hearing last Thursday on the Better Way tax-reform blueprint. Not much ground was broken as business leaders from AT&T and Emerson Electric Co. were broadly asked friendly questions about the importance of cutting business rates. This week will prove much more exciting beginning on Tuesday when the Ways and Means takes a deeper look at the border adjustment tax. Treasury Secretary Steven Mnuchin heads to the committee to discuss Trump’s first budget on Wednesday, and the secretary finishes off the week at Senate Finance on Thursday, to discuss both the administration’s budget and their tax reform framework.

Tuesday’s hearing on border adjustability should prove to be contentious, as high profile supporters and opponents come to Washington to air their views. The proposal, which would tax imports but not exports, has split the business community. Retailers are among the most vigorous opponents of border adjustment, maintaining it would hike costs on consumers. Ways and Means Chairman Kevin Brady (R-Texas) has unwaveringly stood by the proposal, saying it would generate a rise in the value of the dollar that would curb the tax hit to retailers.

Serious consideration for this issue may begin to stall even further after statements from Senate Majority Leader, Mitch McConnell (R–Ky.) last week that the proposal has a very small chance at passing the Senate. McConnell also said that he wasn’t on board with any idea of tax reform adding to the debt, maintaining that it must be revenue neutral. This may cause problems since the border adjustment from the House GOP's blueprint raises more than $1 trillion over a decade. So, in short: Republicans are going to have to coalesce around more revenue raisers if they want revenue-neutral tax reform, something that was always going to be extremely difficult.

NCSL Contacts: Max Behlke, Jake Lestock

NCSL States Its Case On Infrastructure

NCSL, represented by Utah Senator and immediate past NCSL President Curt Bramble, joined state and local leaders from the National Association of Counties, United States Conference of Mayors, and National League of Cities last Wednesday for a robust conversation on infrastructure with members of Congress. The conversation, held during Infrastructure Week, focused on the role of state and local governments in building, maintaining and improving America’s infrastructure and how Congress can help support the nation’s infrastructure needs.

Bramble emphasized three needs as Congress develops solutions to the nation’s infrastructure woes: flexibility, financing and fiscal viability. Other state and local leaders echoed Bramble’s calls. Following the briefing, U.S. Representative  Gary Palmer (R-Ala.) convened a meeting with  Bramble and other local leaders who were joined by representatives from the National Governors Association and the International City/County Manager Association to discuss different regulatory issues that hinder the construction and maintenance of different infrastructure assets. Speakers highlighted regulatory burdens and urged the easing of federal regulations. For more information on the briefing please see NCSL’s Blog.

NCSL Contacts: Ben Husch, Kristen Hildreth

Read the May 15, 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