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

Volume 19   Issue 4 - February 3, 2012

 

POTHOLES AHEAD!!!

At 2:45 a.m. this morning, the House Transportation and Infrastructure Committee concluded 18 hours of testy debate on H.R. 7, Florida Rep. John Mica’s proposed five-year reauthorization of surface transportation programs, costing approximately $260 billion. The American Energy and Infrastructure Jobs Act of 2012 cleared the committee on a 29-24 party-line vote. Today the House Ways and Means Committee is marking up additional legislation that will provide some of the funds to finance the underlying reauthorization bill. Earlier this week, the House Natural Resources Committee approved H.R. 3407, 3408 and 3410, bills that would provide additional revenues for surface transportation by expanding domestic energy production. The Natural Resources Committee’s trio calls for further exploration of offshore oil and gas as well as oil shale, and increased production and drilling of oil in the Arctic National Wildlife Reserve and Arctic shelf. NCSL staff is pouring over more than 1,000 pages of legislative language and amendments and will have details available early next week. The text of Rep. Mica’s legislation is available at http://thomas.loc.gov/home/gpoxmlc112/h7_ih.xml. The Senate Banking, Housing and Urban Affairs Committee is marking up its mass transit title of the Senate’s reauthorization package (S. 1813), and the Senate Finance Committee intends to finish off its revenue title for the underlying bill next week. NCSL staff contacts: Molly Ramsdell, Jennifer Arguinzoni


FLEXIBILITY OUT, SANCTIONS IN

States that do not comply with new federal restrictions on the use of Electronic Benefit Transactions (EBT; e.g., in casinos, liquor stores, strip clubs) in the Temporary Assistance for Needy Families (TANF) program will face fiscal administrative sanctions. That is the message sent to states with the U.S. House of Representatives lopsided vote on H.R. 3567 on Feb. 1, 2012. The legislation passed 395-27 and drew NCSL's opposition expressed in a letter sent on Jan. 30 and signed by South Dakota Senator Tom Hansen and Kansas Representative Barbara Ballard, co-chairs of NCSL's Human Services and Welfare Committee. The legislation retreats from the program flexibility states agreed to in exchange for block grant funding when TANF was enacted in 1996. As the lawmakers representing NCSL argued in their letter, “states are already addressing the (EBT) issues in H.R. 3567 ... [and] ... are looking at similar EBT limitations and other ways to combat fraud and abuse in their current sessions.” H.R. 3567 doesn't curry favor in the Senate, but could become part of negotiations to extend authorization of the TANF program. Those TANF discussions are part of the give-and-take involving another extension of a payroll tax reduction and unemployment benefits. (See related story below.) NCSL’s letter is available at http://www.ncsl.org/issues-research/human-services/letter-in-opposition-to-hr-3567.aspx. NCSL staff contacts: Sheri Steisel, Emily Wengrovius


LANDING GEAR DOWN

On their 23rd try over four years, negotiators on a four-year reauthorization of state airport grants, the Essential Air Service and other Federal Aviation Administration programs, have struck a bipartisan, bicameral compromise. The agreement on H.R. 658 will authorize state airport grant appropriations totaling $13.4 billion over four years. The Essential Air Service (EAS), which provides subsidies to carriers serving rural communities, will receive annual mandatory spending authority of $190 million. New communities will not be allowed to be added to the EAS program. The agreement (H. Rpt. 112-381) requires federal standards for lithium batteries to correlate with international standards and adds 16 long-distance slots to Reagan Washington National Airport. The legislation’s fate should be sealed by early next week with a Senate vote. More details will follow. NCSL staff contacts: Molly Ramsdell, Jennifer Arguinzoni


HEALTH CARE YELLOW PAGES

State legislators and legislative staff seeking comprehensive information on the Affordable Care Act need not travel further than NCSL's website. At http://www.ncsl.org/issues-research/health/american-health-benefit-exchanges.aspx, last updated Feb. 1, 2012, the latest data on health benefit exchanges and essential health benefit packages are available. The site contains information issued via statute, rule or other federal government communications. It also provides key dates and deadlines for states that are in the process of complying with the Act. Need more information? Contact: Joy Johnson Wilson or Rachel Morgan (NCSL DC Office)


REGULATORY BUMPS FOR BONDS

A proposed federal rule threatens states with higher borrowing costs, creation of a two-tiered state and local government securities market, and potential tempering of investor preference for governmental bonds. The threat emanates from the "Volcker Rule," a regulation required under the Dodd-Frank Wall Street Reform Act that mitigates the risk of proprietary trading activities by financial institutions. The rule has been proposed by the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation and the Federal Reserve System. Their task is to indentify exclusions, including state and local government-issued securities. However, the four regulatory agencies have proposed to distinguish between bonds issued by states and localities and those issued by separate state agencies, political subdivisions, municipal corporations, special districts and others (which aren't specifically issued by a state or local government). This contradicts federal regulations and laws in existence since the 1930s. It also appears to contradict legislative intent. NCSL is collaborating with other state and local government associations to replace the proposal with language from the 1934 Securities Act that has served well as the guiding definition for uniform federal treatment of state and local government securities. State legislators are urged to comment on the proposed regulation by the announced deadline of Feb. 13, 2012. NCSL staff contacts: Michael Bird, James Ward, Jeff Hurley


ROLLING IN THE DEEP

This week’s semi-annual Budget and Economic Outlook prepared by the Congressional Budget Office (CBO) offers mixed news. The good news is that under current law, federal debt will be stabilized over the next 10 years, dropping to 62 percent of Gross Domestic Product by 2022. The bad news is that CBO’s baseline assumes provisions that appear politically untenable. These assumptions include sunsetting the 2001, 2003 and 2010 tax cuts and allowing the alternative minimum tax to expand to additional tax payers. They also include the carrying out of reductions in Medicare provider reimbursements and a possible unraveling of the across-the-board discretionary spending reductions ordered under the Budget Control Act. If these assumptions are not met the public debt is estimated to rise to 94 percent of the GDP by 2022, the highest rate since right after World War II. At a House Budget Committee hearing on Wednesday, CBO Director Douglas Elmendorf reiterated a familiar message: “Congress will need to either raise revenues well above what’s been the historical average share of GDP or make fundamental changes in the large programs, or some combination.” The full report is available here: http://www.cbo.gov/ftpdocs/126xx/doc12699/01-31-2012_Outlook.pdf. NCSL staff contacts: Michael Bird, Jeff Hurley


BUDGET REFORM BONANZA

The House continues to offer an array of proposals that would either alter the budget process or provide federal savings. Following amendments from the House Rules Committee, House Majority Leader Eric Cantor of Virginia plans to bring to the floor H.R. 3521, which would give the president line-item veto authority in certain appropriations bills, contingent on congressional approval. Meanwhile, after passing the House Budget Committee last week, the first of a series of 10 budget overhaul proposals passed the House. These include H.R. 3582, which would require the Congressional Budget Office (CBO) to consider economic growth when scoring legislation (known as “dynamic” scoring). H.R. 3578 would prohibit CBO from integrating inflation into their spending projections. The House also passed legislation to freeze federal salaries one more year through the end of 2013. This came after the House passed a resolution to reduce congressional committee operating budgets by almost 5 percent. NCSL staff contacts: Michael Bird, Jeff Hurley


WHO FOOTS THE BILL?

The 20-member House-Senate payroll tax conference held its third meeting this week in an effort to find consensus to fund payroll tax cuts, extend unemployment compensation and Medicare provider reimbursements for the rest of the calendar year. In the discussions are needed extensions or reauthorizations of the Temporary Assistance for Needy Families (TANF) block grant, the Transitional Medical Assistance (TMA) program and the Qualifying Individual (QI) program. How to pay for these extensions, estimated at $160 billion over the next 10 years, remains the primary hurdle. Or will Congress revert to pushing the “emergency” designation button and skirt the offset skirmish? House Republicans have stated a preference to offset the legislation’s costs through increased Medicare premiums for high-income earners and freezing pay for federal workers next year. In the past, Senate Democrats have galvanized around a surtax on individuals making more than $1 million. This option appears to be off the table. Many of these issues have obvious funding and economic effects on states. Only 26 days remain before something must happen. Stay tuned. NCSL staff contacts: Michael Bird, Jeff Hurley (legislation generally), Joy Johnson Wilson, Rachel Morgan (TMA, QI, Medicare), Sheri Steisel, Emily Wengrovius (TANF), Michael Reed (UI)