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

Volume 20   Issue 6 - February 8, 2013

WANTED: REAUTHORIZATION

The federal government has long used its reauthorization tool to modify laws, assess the use of funds, adopt changes to grants based on recipients’ (particularly states’) experiences and redirect services. State officials have used the same process to seek changes to laws, highlight what’s working or not, seek greater flexibility and share experiences with implementing laws. Most laws have five years before the reauthorization timer goes off. Recently, however, the process has broken down due to myriad differences among the House and Senate, political parties, policy viewpoints, and Congress and the administration. Among the laws well-beyond its reauthorization date and in need of a comprehensive rewrite is the No Child Left Behind Act (NCLB). NCSL and eight other state and local government organizations have urged Congress to make bipartisan reauthorization of the education law a top priority. In a letter on Feb. 4, the organizations called for full reauthorization, greater funding flexibility and federal policies that “authentically” support state and local innovation instead of the temporary, limited relief waivers provide. State legislators are encouraged to send a similar message to their congressional delegations and the administration to develop momentum for a NCLB rewrite. The letter is available at http://www.ncsl.org/issues-research/educ/coalition-esea-letter-to-113th-congress.aspx. NCSL staff contacts: Lee Posey, Michael Reed


SEQUESTRATION STAND-INS

Barring another temporary delay, states can expect an estimated 5.9 percent across-the-board reduction in FY 2013 federal non-defense discretionary funds. Heftier reductions in the 7.3 percent neighborhood will hit defense discretionary accounts. This adds up to $85 billion to be cut through Sept. 30, 2013. This week, President Obama urged lawmakers to delay the cuts, known as sequestration, by finding new revenue and targeting spending reductions. Noting that $2.5 trillion in deficit savings have been enacted in recent years, a “balanced mixed of spending cuts and tax reform is the best way to finish the job of deficit reduction.” The president did not give details on how to find enough savings to postpone sequestration, but did suggest altering tax incentives for corporations and high-income earners. Meanwhile, House Republicans may offer legislation that would pay for the first year of sequestration, estimated at $84 billion, by cutting 10 percent of the federal workforce through attrition and freezing salaries for members of Congress over the next 10 years. Stay tuned. NCSL staff contacts: Michael Bird, Jeff Hurley


BALANCED BUDGET BILL

The House on Wednesday passed legislation, 253-167, to require the president to offer a budget proposal that would balance the federal budget within 10 years or identify when his plan would achieve a balanced budget. Introduced by Georgia Rep. Tom Price, H.R. 444 follows recent reports that the House will offer a budget resolution that would balance the budget in 10 years by cutting entitlement programs and discretionary spending. The president missed the deadline to release his annual budget for FY 2014 this week due to uncertainty surrounding December’s fiscal cliff. He is now expected to unveil his budget proposal in March. NCSL staff contacts: Michael Bird, Jeff Hurley


SOME GOOD NEWS, SOME BAD NEWS

 The Congressional Budget Office (CBO) this week released its 10-year “Budget and Economic Outlook” with some uplifting as well as disturbing news. The report predicts slow economic growth (1.4 percent) for 2013 followed by more robust performance in subsequent years with inflation and interest rates staying low in the near-term. The CBO also projects that FY 2013 will see the first deficit in four years fall under a trillion dollars. Debt held by the public is estimated to rise over a decade to 77 percent of Gross Domestic Product (GDP). However, that percentage balloons if federal policymakers cancel or postpone “sequestration” and continue using temporary “fixes” for tax credits and Medicare provider reimbursements. The likelihood of any of these happening is at least even odds given decisions reached over the last dozen years. CBO’s report generated predictable responses—from calls for a “go big” deficit and debt bargain to postponement or imposition of sequestration to enactment of tax and entitlement reform. The report will serve as “support” for virtually any effort to resolve federal fiscal issues that have significant implications for state budgets. The CBO report is available at: http://www.cbo.gov/publication/43907. NCSL staff contacts: Michael Bird, Jeff Hurley