Capitol to Capitol
An Information Service of NCSL's Standing Committees

Volume 18   Issue 6 - February 18, 2011
 

BUDGET TRAIN LEAVES STATION

On Monday the president released his FY 2012 budget proposal, requesting $3.7 trillion in spending and anticipating $1.1 trillion in deficit spending. While the president expects the FY 2011 budget to run a shortfall of $1.6 trillion, his proposal would trim the deficit by $1.1 trillion over the next 10 years, largely from spending reductions and revenue increases. The president’s budget contains cuts to the Clean Water and Drinking Water State Revolving Funds, Community Services Block Grant, the Low Income Home Energy Assistance Program (LIHEAP) and the Community Development Block Grant. He proposes $556 billion for a six-year transportation reauthorization and adds money to some existing education programs as well as some new competitive grants. In terms of deficit reduction, the president recommends medical malpractice reform, changes to the corporate tax code, reform of the Pension Benefit Guaranty Corporation, a three-year freeze on federal civilian pay, and a five-year freeze on non-security discretionary spending. For a comprehensive review of the president’s FY 2012 budget, go to: http://www.ncsl.org/default.aspx?TabId=22203. The Federal Funds Information for States (FFIS) also has a complete breakdown comparing funding allocations from the president’s budget with current funding in 2011. It’s available here: http://www.ncsl.org/documents/statefed/JimMartinTable.pdf. NCSL staff contacts: Michael Bird, Jeff Hurley


HOUSE INTRODUCES FY 2011 APPROPRIATIONS PLAN

The president’s budget wasn’t the only spending proposal making news, as House Republicans introduced legislation (H.R. 1) that would fund the federal government after March 4, when the current continuing resolution expires. The debate on H.R. 1 began Feb. 15 and continues today. The measure would reduce current discretionary spending levels by $58 billion and the president’s FY 2011 budget proposal by $100 billion... H.R. 1 would reduce a variety of state-federal programs, including State Revolving Funds, Title I, (LIHEAP), state and local law enforcement and high-speed rail. A detailed NCSL summary of the proposed reductions is available here: http://www.ncsl.org/default.aspx?TabId=22219. NCSL staff contacts: Michael Bird, Jeff Hurley


 COMMITTEE CONSENSUS AGAINST STATE BANKRUPTCY PROTECTION

 

On Feb. 14, the House Judiciary Committee held a hearing on proposed state bankruptcy protection, bond defaults and pension obligations. Members from both sides of the aisle criticized potential legislation that would allow states to file for bankruptcy. “States currently have ways to put their fiscal houses in order,” stated Judiciary Chairman and Texas Rep. Lamar Smith. “Congress should not hinder restricting efforts at the state level by passing laws that make it more expensive for states to access capital in the bond market during a recession.” Committee member and Georgia Rep. Hank Johnson , added, “State bankruptcy may be a solution in search of a problem.” NCSL, governors and other state and local groups this week put together a fact sheet on pensions, municipal bonds and bankruptcy to help clarify states involvement in these issues. A copy of the fact sheet is available here: http://www.ncsl.org/documents/statefed/statelocalfactsheet.pdf.  NCSL staff contacts: Susan Parnas Frederick (bankruptcy), Diana Hinton, Michael Reed (pensions), Michael Bird, Jeff Hurley (defaults).


PREEMPTION REAPER VISITS HOUSE

This week the House Judiciary Committee passed H.R. 5, which would once again preempt various areas of state medical malpractice and tort reform law. And once again, NCSL registered its bipartisan opposition to this broad preemptive strike in a letter on Feb. 16, 2011, to the committee’s chair and ranking member signed by Nevada Assemblyman William Horne and Texas Representative Jerry Madden, chair and immediate past chair of NCSL’s Law and Criminal Justice Committee. The letter argues that the “one-size-fits-all approach to medical malpractice envisioned in H.R. 5 would undermine state diversity and disregard factors unique to each particular state.” The legislation contradicts conclusions reached by NCSL studies regarding need for federal action. Prospects for this legislation have gotten a boost from the various deficit reduction commissions that have almost unanimously called for preemptive action as a federal budget saver. Next stop for this legislation is the House Energy and Commerce Committee’s subcommittee on health. The letter can be viewed at http://www.ncsl.org/default.aspx?tabid=22234. (NCSL staff contacts: Susan Parnas Frederick, Jennifer Arguinzoni)


HERE COMES THE BUDGET JUDGE(S)

Legislation addressing the nation’s deficit problems may be introduced sooner than previously indicated, as a new coalition called the “Gang of Six” are working on a plan to reduce the national debt. North Dakota Senator Kent Conrad, Illinois Senator Dick Durbin , Idaho Senator Mike Crapo and Oklahoma Senator Tom Coburn have joined forces with Virginia Senator Mark Warner and Georgia Senator Saxby Chambliss, who had been working on gathering sponsors for legislation responding to the Bowles-Simpson fiscal commission report. Reports suggest these senators hope to introduce their proposal after the Presidents’ Day recess to help garner support for what may amount to cuts in discretionary spending and tax and entitlement reform. (NCSL staff contacts: Michael Bird, Jeff Hurley)