Capitol to Capitol | Vol. 22, Issue 16

10/14/2015

Capitol to CapitolUNCERTAINTY ABOUNDS IN BUDGET TALKS. Having at least temporarily avoided a government shutdown, the ongoing uncertainty over filling the leadership void created by Speaker John Boehner’s (R-Ohio) pending resignation has further complicated the near-term fiscal picture. At the end of September, Congress passed a 10-week continuing resolution that aligns with the FY 2016 post-sequestration spending level set in 2011’s Budget Control Act. The White House and congressional negotiators have had preliminary discussions on the framework of a potential budget deal. However, the news that current House Majority Leader Kevin McCarthy (R-Calif.) would not seek the top spot in the House Republican Conference, along with the debate on who will replace Boehner as speaker, has at least temporarily deferred any discussions on the fiscal landscape. This uncertainty adds another dynamic to an already tight calendar for lawmakers before the debt limit and government funding expire, with only three and seven weeks of session remaining, respectively. Meanwhile, the House Budget Committee last week approved a reconciliation bill that is expected to be on the House floor later this month. The bill would reduce the deficit by close to $80 billion over the next decade, according to the Congressional Budget Office, and would repeal portions of the Affordable Care Act, including the medical device tax and the “Cadillac tax,” and suspend federal funding to Planned Parenthood. NCSL staff contact: Jeff Hurley

THE LONG AND WINDING ROAD TO ANOTHER TEMPORARY EXTENSION. The first of many fast-approaching deadlines arrives in less than three weeks, as the current 90-day extension for federal transportation programs expires on Oct. 29. Additionally, although the Department of Transportation noted that the Highway Trust Fund will remain solvent until well into 2016 without additional funding, balance levels may fall low enough by Nov. 20 that the DOT could be forced to reduce state reimbursements. Initial hopes for a long-term reauthorization have waned, and another short-term extension appears likely. In September, Senator Charles Schumer (D-N.Y.) and Representative Paul Ryan (R-Wisc.) floated a proposal that would combine long-term infrastructure investment with international tax reform. The plan would offer multinational corporations a one-time tax break on corporate earnings, and use this “repatriation” to fund infrastructure projects. Negotiations eventually halted because of  disagreements on the appropriate level of highway funding. The Senate earlier this summer approved the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, which would provide $350 billion for highway and transit programs, although it only identifies funding for half of the six-year reauthorization. The House Transportation and Infrastructure Committee is planning a markup for a multi-year surface transportation bill later this month and just days before the current reauthorization expires, almost certainly indicating the need for another short-term extension. NCSL has consistently urged congressional leaders to enact a fully funded, long-term infrastructure reauthorization that strengthens the shared commitment between states and the federal government. Stay tuned. NCSL staff contacts: Ben Husch, Melanie Condon

FINAL DUE DATE. The federal government will reach its statutory debt limit sooner than previously anticipated, as reported by Treasury Secretary Jack Lew. On Nov. 5, the Department of Treasury will have exhausted all “extraordinary measures” and will only have $30 billion in cash, and unable to meet all of its financial obligations. Earlier target dates estimated the debt limit, currently set at $18.1 trillion, would not be breached until December. Lew attributed the earlier deadline to lower-than-anticipated tax receipts. Solutions for the moment remain sparse. Senate Republican Conference Chairman John Thune (R-S.D.) noted the possibility that a provision increasing the nation’s borrowing authority could be attached to either a highway bill extension or a budget deal, although the latter remains increasingly unlikely. NCSL staff contact: Jeff Hurley


Capitol to Capitol is a publication of the National Conference of State Legislatures, the premier bipartisan organization representing the interest of states, territories and commonwealths. The conference operates from offices in Denver and Washington, D.C.