Capitol to Capitol | Jan. 23, 2017

1/23/2017

Capitol to CapitolThe Dawn of a New Era—and Spending Priorities—in Washington

When Donald Trump became the 45th president of the United States on Friday, he ushered in a new era in the nation's capital, which had not seen a Republican administration since 2009. And, according to the The Hill, the new head of the federal government is planning to make it smaller. Following a blueprint outlined by the conservative Heritage Foundation, the president's plan aims to cut $10.5 trillion in federal spending over the course of a decade by eliminating programs and agencies, and through targeted cuts in program funding. The administration's initial plan, or “skinny budget,” is expected to be released within the first 45 days and will provide an overview of the administration's priorities. A full and more detailed budget proposal is expected within the first 100 days.

The Ides of March: The Return of the Debt Limit

As part of the November 2015 budget deal, the federal government's borrowing limit was suspended until March 15, 2017. If the debt limit is not suspended again or increased, the federal government will no longer be able to borrow funds to pay its bills and will only be able to spend what it collects. The Treasury Department has the ability, however, to use accounting tools known as "extraordinary measures" to avoid defaulting on the government's spending obligations until the middle of the summer. Nonetheless, the debt limit will need to be addressed at some point in the first half of 2017 and the issue will likely play a prominent role this year, especially as Trump and Congress look to overhaul healthcare and the federal tax code, as well as rein in federal spending.

NCSL Contact: Max Behlke

Trump Administration Taking Shape

Since the 115th Congress convened earlier this month, Senate confirmation hearings for Trump's nominees for top cabinet posts have taken center stage. Historically, the chamber has conducted confirmation hearings before the new president takes the oath of office so that the body can move to quickly confirm the nominees after inauguration. And, as expected, the Senate convened on Friday afternoon and confirmed two of Trump's nominees, General James Mattis as secretary of defense, and General John Kelly as secretary of homeland security. The Senate traditionally has given incoming presidents deference regarding their choices to lead their government departments and agencies. However, several of Trump's nominees had rocky confirmation hearings and still have to clear a vote of the full Senate, which at 52-48 has a slim Republican majority.  

D.Y.K ?? John Quincy Adams in 1825 was the first U.S. president to wear pants to an inauguration.  Before that, they all wore "knee breeches."

Passage of Budget Reconciliation Begins Healthcare Reform

Before adjourning for the inauguration Jan. 13, both congressional chambers approved S. Con Res. 3, the reconciliation budget for 2017 that funds the government into March and directs certain Senate and House committees to each find at least $1 billion in cost cutting over 10 years with the aim of dismantling parts of the Affordable Care Act (ACA). It establishes a reserve fund that permits the Budget Committee chairs to adjust the levels in the budget resolution for health care legislation, including legislation that repeals the ACA and makes other health care reforms. Critics of the reconciliation measure on Capitol Hill, including prominent Republicans and fiscal hawks, have contended that repealing the law without replacing it will add hundreds of billions of dollars to the federal deficit.

While the reconciliation measure, by design, does not provide legislative specifics, in general, the legislation establishes two reserve funds that provide the chairmen of the congressional budget committees with flexibility for repeal, and/or replacement, of the ACA.  

Read more about the budget reconciliation process.

NCSL Contacts: Max Behlke (budget); Rachel Morgan (health) 

States Closely Follow Healthcare Reform

Due to the increase in Medicaid funding provided by the Affordable Care Act, federal money now accounts for 61.2 percent of total state Medicaid spending. Medicaid, which accounts for 29 percent of state spending, is the second largest portion of state spending, after education. States are closely following both how federal healthcare reform may lead to how they administer their state health programs, as well as how it may affect their budgets. NCSL is closely monitoring the health care reform discussion and will continue to provide information as more details of the potential replacement law are made known.

For more information, please visit NCSL's Federal Health Care page. 

NCSL Contact: Rachel Morgan

Remote Sales Tax Collection: All Eyes on South Dakota

A South Dakota federal district court ruled on Jan. 17 that the state's courts, rather than the federal courts, will serve as the venue for the lawsuit brought against the state's remote sales tax law. The 2016 law requires out-of-state companies that have: (1) more than $100,000 in South Dakota sales; or (2) 200 or more separate transactions with South Dakota customers, to collect and remit the state's sales tax, regardless of whether or not the companies are physically located in the state.

This ruling is a victory for the state because the lawsuit will almost certainly move faster through the state's legal system for two reasons. First, the South Dakota court system does not have an intermediate court between state circuit court, where the case will be heard first, and the state Supreme Court. The absence of an intermediate court will allow for a faster appeals process. Second, the 2016 law, Senate Bill 106, has language directing both the state circuit court and the state Supreme Court to issue judgement as "expeditiously as possible and this action shall proceed with priority over any other action presenting the same question in any other venue." This unique language was intended to urge the courts to act as swiftly as possible so the state could ultimately appeal the decision to the United States Supreme Court, with the intent of overturning Quill.  

NCSL Contact: Max Behlke 

Read the Jan. 10 edition of Capitol-to-Capitol. If you have comments or suggestions, please contact Max Behlke.


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.