Capitol to Capitol | Oct. 16, 2017

Senator Graham: “If we don’t [pass tax reform] we’re dead”

Yesterday on “Face the Nation,” Senator Lindsey Graham (R-S.C.) told host John Dickerson that if Republicans, who control both chambers of Congress as well as the Oval Office, cannot pass tax reform after failing to repeal and replace the Affordable Care Act (ACA), then they “are going to lose across the board in the House in 2018. And all of my colleagues running in primaries in 2018 will probably get beat. It will be the end of Mitch McConnell as we know it." Needless to say, passage of a tax package has become the top priority for Republicans on Capitol Hill.

DYK?

In the Western Hemisphere, coffee was considered “the Devil’s Drink” until a pope “baptized” it in the 16th century. Coffee quickly spread throughout the Muslim world in the 9th century when Islamic clerics learned how to cultivate the plant. However, when the drink made its way to Christians in Europe, who had been at war with Muslim countries for centuries, it was not exactly received with open arms. However, after Pope Clement VIII was brought a steaming cup of java and he took a sip, legend has it that he said: “This devil’s drink is delicious. We should cheat the devil by baptizing it.” The beverage has flourished in the Western Hemisphere ever since.

The next crucial step for tax reform will take place this week when the Senate looks to pass a budget resolution that differs substantially from the budget resolution passed by the House on Oct. 5. After voting to confirm Callista Gingrich to be ambassador to the Vatican on Monday, the Senate on Tuesday will vote to start debate on the budget, which will be followed by 50 hours of debate and then a marathon process of amendments known as "vote-a-rama." Following the votes on amendments, the chamber will then vote on the final package, which is expected to pass.

After passage, the Senate and House will head to what is expected to be a contentious conference committee in November to iron out the details. In conference, budget writers will need to reconcile the differing packages to reach an agreement on a plan that will serve as the framework for tax reform. Both chambers will then need to pass the conference committee budget resolution, which is by no means guaranteed, before they can begin the budget reconciliation process, which will serve as the vehicle for tax reform.

NCSL Contacts: Max Behlke, Jake Lestock

Trump Administration Cancels Health Insurance Payments

Last week, the Trump administration announced that it would be discontinuing Cost Sharing Reduction (CSR) payments that are intended to reduce out-of-pocket health care costs for low-income Americans who obtain their healthcare through the ACA. The payments have been part of an ongoing debate between the administration and Congress on whether the payments should be approved by the White House or appropriated by Congress.

DYK?

Dr. James Naismith invented the game of basketball in 1891 to provide a creative and healthy indoor “athletic distraction” for a rowdy class of students during the brutal New England winter. It is believed that Naismith drew up the rules of his new game of basketball in about an hour. Most of these rules still apply today.

The CSR payments, which cost about $7 billion in 2017, alleviate copays and deductibles for people with lower incomes who purchase insurance through the healthcare exchanges established by the ACA. According to the Kaiser Family Foundation (KFF), 57 percent of people that have obtained their health insurance in the marketplace qualified for cost sharing subsidies. Should the payments cease, which is still a question considering that multiple groups, including 18 states and the District of Columbia, filed suit against the administration almost immediately after the announcement, the KFF expects that insurers would have to raise premiums by approximately 19 percent to make up for the loss of the government’s payments. 

Also last week, the administration signed an executive order (EO) that proposes changes to the health insurance market. The EO touches on association health plans, short-term limited duration plans and health reimbursement arrangements. The administration has expressed concern that many Americans only have access to one or two providers, and these proposed changes could expand their networks.

NCSL will be releasing an overview of both the executive order and the CRS payment announcement shortly.

NCSL Contact: Haley Nicholson

EPA Proposes Repeal of the Clean Power Plan

Last week, the Environmental Protection Agency (EPA) Administrator Scott Pruitt proposed repealing the Clean Power Plan (CPP) claiming it “exceeds EPA’s statutory authority,” and is “inconsistent with the Clean Air Act (CAA).”

This action begins what will likely be a lengthy regulatory process per the Administrative Procedure Act while simultaneous litigation surrounding the previously finalized rule continues. Unveiled in 2015, the CPP aims to reduce greenhouse gas (GHG) emissions by requiring states to develop plans to meet requirements in the CPP, and if not, EPA would impose a federal implementation plan on a nonconforming state. Ten days after the rule was issued, 27 states petitioned the U.S. Court of Appeals of the District of Columbia for an emergency stay, while 18 states indicated their support for the rule. The D.C. Circuit denied the stay, but in February 2016, the U.S. Supreme Court stayed implementation of the rule pending judicial review by the D.C. Circuit. While the D.C. Circuit heard oral arguments in September 2016, the court granted President Donald Trump’s administration’s request to defer further judicial proceedings following an executive order directing the agency to review, revise, or potentially rescind the rule. As the CPP remains stayed, the administration’s actions to withdraw the rule will not have any immediate effect on the implementation of the rule.

Key Documents

NCSL Contacts: Ben Husch, Kristen Hildreth

House Approves Emergency Hurricane and Wildfire Funding Legislation

On Oct. 12 the U.S. House of Representatives passed legislation to provide $36.5 billion in emergency funding for hurricane and wildfire relief and recovery. The vote was largely bipartisan, passing by 353-69. The bill will now move to the Senate for approval.

According to a press release from the Appropriations Committee, “The legislation fully funds the requests submitted to Congress from the administration. It includes $18.7 billion for the Federal Emergency Management Agency’s Disaster Relief Fund, $576.5 million for wildfire-fighting efforts, and $16 billion for debt relief for the National Flood Insurance Program, which now needs additional funds to make necessary insurance claims payments to individuals. In addition, it includes a provision for the Disaster Nutrition Assistance Program that enables low-income residents in Puerto Rico to receive the same emergency nutrition assistance that other hurricane-affected states already receive.”

  • NCSL’s letter to Congress urging passage of the Disaster Relief legislation.

NCSL Contact: Ethan Wilson

Senate Committee Advances Autonomous Vehicle Legislation

Earlier this month, the Senate Commerce Committee unanimously approved the AV START Act after adopting two dozen amendments, including one offered by the committee’s ranking member, Senator Bill Nelson (D-Fla.), that seeks to establish a balance between federal and state laws affecting self-driving vehicles. While the amended bill made clear that states cannot interfere with federal agencies' power to regulate vehicle design, safety and performance standards, it also said that it could not be construed "to prohibit a state or political subdivision of a state from maintaining, enforcing, prescribing or continuing in effect" laws and regulations on sale, distribution and service of highly automated vehicles or their components. The amendment also made clear that state liability laws would apply, for damages related to operating such vehicles.

Currently, states are pre-empted from enacting or enforcing laws that regulate the design, construction, or performance of a motor vehicle where a federal motor vehicle safety standard (FMVSS) already exists. However, as no FMVSS are yet in place for autonomous vehicles, the Nelson amendment would similarly pre-empt states from regulating the design, construction and performance of an autonomous vehicle for items required by the bill’s safety evaluation report (SER).

NCSL Contacts: Ben Husch, Kristen Hildreth

Real ID

The Department of Homeland Security (DHS) began updating its Real ID website to reflect the status of those states whose extension requests are under review—about half the states had extensions that expired on Oct. 10. DHS plans to update the website on a weekly basis. The updated map shows those states previously granted an extension but remain "under review" in blue, and also notes that those states not granted an extension can expect a short grace period, until Jan. 22, 2018.  After that date, an individual holding a driver’s licenses from a non-compliant state will need to show an alternative form of acceptable identification and be subject to secondary screening when boarding a commercial aircraft. It would also limit the individual’s ability to enter certain federal facilities and access nuclear power plants.

NCSL Contacts: Ben Husch, Kristen Hildreth

NAFTA Renegotiations Return to the U.S. for Round Four

Representatives from Mexico, Canada and the U.S. met over the weekend just outside of Washington, D.C., for the fourth round of talks over the future of North American Free Trade Agreement (NAFTA).

DYK?

On this day in 1923, The Walt Disney Company was founded by Walt Disney and his brother, Roy Disney.

The three parties have met once in each of their countries since talks kicked off in D.C. in mid-August. As officials have indicated previously, these talks have engaged a wide range of stakeholders—private sector, labor groups, legislative representatives and state/provincial officials. While few details have been publicly released, Politico reports that round four featured state-owned enterprises, textiles, goods, services, government procurement, food safety,- plant and animal health, the environment, financial services, anti-corruption and regulatory practices and more. Back in July, the Trade Representative’s office released a summary of NAFTA renegotiation objectives that outline a range of priorities from trade deficit reduction to conditions for trade in services.

Two of the issues receiving increased consideration include auto trade rules of origin and a potential sunset provision. The sunset provision would terminate NAFTA after five years without further action to extend the program by the three countries. Tightened auto trade provisions under consideration would require 50 percent of the parts of a vehicle to originate in United States, and 85 percent to originate in a NAFTA country, to be eligible for NAFTA benefits, Politico reports. NAFTA talks were scheduled to be completed after seven rounds, which means the U.S., Mexico and Canada have hit their theoretical halfway point.

NCSL Contacts: Jon Jukuri, Lucia Bragg

Puerto Rico Seeks Help From the Trump Administration and Congress

Puerto Rico Governor Ricardo Rossello recently wrote Treasury Secretary Steven Mnuchin to relay that his government will soon have no money to sustain government functions in the U.S. territory. Furthermore, Rossello’s message asked for a loan from the federal government to continue basic operations.

Specifically, Rossello wrote, “Without immediate access to a significant federal liquidity facility, we will be unable to provide essential services to our citizens, such as paying the salaries for teachers and first responders, providing health care, and paying pensions.”

Rossello’s message and sentiment was heard by the administration. After receiving the communication, the Office of Management and Budget amended its request to Congress to reflect a $4.9 billion loan to relieve Puerto Rico’s government funding crisis, at least in the short term.

Department of Veterans Affairs Issues Proposed Rules on Telehealth

The Department of Veterans Affairs (VA) released a proposed rule on Sept. 29 that would allow VA providers to use telehealth services to treat patients in any state, regardless of either party’s location or where the providers are licensed to practice. To comply with current licensing requirements, patients interested in using telemedicine must come to a federal health care facility or live in the same state as the remote provider. VA officials have said the new rules will allow them to significantly expand the technology’s reach to better serve the 9 million veterans receiving care. The rules would also override state licensing restrictions that limit the VA’s telehealth program, according to the department.

The move is part of the “Anywhere to Anywhere VA Health Care” program that VA Secretary David Shulkin and President Donald Trump announced in early August. The rule states that as that program expands, “it is increasingly important for VA health care providers to be able to practice telehealth across state lines and within states free of restrictions imposed by state law or regulations, including conditions attached to their state licenses.” The VETS Act of 2017, introduced back in April, proposes similar regulatory changes but is unlikely to move as quickly as the rulemaking process. The proposed rules allowed for a 30-day comment period, which will close at the end of the month.

NCSL Contacts: Jon Jukuri, Lucia Bragg

Federal Court Rules Department of Interior Violated Administrative Procedures Act

On Oct. 4, the U.S. District Court for the Northern District of California ruled that the Department of Interior (DOI) misused Section 705 of the Administrative Procedures Act (APA) when it froze certain provisions of the Bureau of Land Management’s (BLM) venting and flaring rule. The rule is aimed at reducing “waste of natural gas from venting, flaring, and leaks” during oil and natural gas production through onshore federal and Indian leases, and modernizes more than 30-year-old oil and gas production rules.

The court’s decision resulted in the rule going into immediate effect and also sets precedent for legal challenges surrounding various other rule delays, or postponements by an administration.

For more information, see NCSL’s information alert.

NCSL Contacts: Ben Husch, Kristen Hildreth

Also of Note …

  • House is in recess this week.
  • On Monday, Trump will hold a Cabinet meeting that is expected to discuss tax reform, immigration, and disaster relief. Trump will have lunch with Senate Majority Leader Mitch McConnell (R-Ky.) at the White House. The president’s relationship with McConnell is crucial for the passage of major legislation, including tax reform.
  • On Wednesday, Senate Finance Committee members, who will be central players in the tax reform debate, will visit the White House to meet with Trump.
  • NCSL sent a letter to Congress on Oct. 6 urging preservation of the State and Local Tax (SALT) deduction in tax reform.
  • Last week, Trump announced that he would not certify the 2015 Iran nuclear deal ahead of yesterday’s deadline, but instead will press Congress to pass legislation to amend the deal rather to address what he called its “many serious flaws.” While declining to certify the Iran deal will indeed undermine the law, the president’s move did not terminate the agreement. Trump acted under a U.S. law that requires the president to endorse the deal every 90 days with a certification that Iran is meeting its obligations and that the deal remains in the U.S. national interest. Read more from the Washington Post.
  • Government funding expires on Dec. 8.

 

‚ÄčRead the Oct. 9, 2017, Capitol-to-Capitol.

Like Capitol-to-Capitol? Have ideas or suggestions for how it can be improved? Let us know in this short survey or contact Max Behlke.

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
  • Danielle Dean | 202-624-8698 | Communications, Financial Services
  • Susan Frederick | 202-624-3566 | Law, Criminal Justice, and Public Safety
  • Ben Husch | 202-624-7779 | Natural Resources and Infrastructure 
  • Jon Jukuri  | 202-624-8663 | Labor, Economic Development and International Trade
  • Haley Nicholson | 202-624-8662 | Health
  • Ethan Wilson | 202-624-8686 | Commerce and Financial Services
  • Joan Wodiska | 202-624-3558 | Education