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

Volume 19  - January 20, 2012 
 

NCSL SAYS “GO BIG

” In a letter to the president and congressional leaders on Jan. 17, NCSL urged the administration and Congress to “go big” in their efforts to reduce the nation’s debt. The president will have the opportunity to address the nation’s deficit in his FY 2013 proposed federal budget release in early February, while Congress may offer recommendations in the spring with their budget resolution. The “go big” principle, which has been suggested by members of Congress and the private sector, is generally defined as a deficit reduction plan of at least $4 trillion in order to put America on a fiscally sustainable path. The letter, signed by NCSL President Stephen Morris of Kansas and the co-chairs of NCSL’s Deficit Reduction Task Force, New Hampshire Representative Terie Norelli and Wyoming Representative Rosie Berger, stated the “White House and Congress need to examine all possible avenues for deficit reduction, including discretionary spending, entitlement reform and revenue-related options.” Two deficit reduction proposals—the National Commission on Fiscal Responsibility’s Moment of  Truth and the Bipartisan Policy Center’s Restoring America’s Future—are cited as possible frameworks the administration and Congress could tap to place the nation’s debt on a downward trajectory. The letter is available at: http://www.ncsl.org/issues-research/budget-tax/fy2013-budget.aspx


AUTHORIZED, FUNDED OR NOT?

The funding of and authorization for a smorgasbord of state-federal programs will hang in abeyance throughout this year. First up will be the 23rd attempt to reauthorize Federal Aviation Administration programs, including the state airport improvement grant program, which currently expires Jan. 31, 2012. Following behind it, each with sunset date of Feb. 29, 2012, are the Temporary Assistance for Needy Families (TANF) block grant, and the Unemployment Emergency Compensation (UEC), Transitional Medical Assistance (TMA) and Qualifying Individuals (QI) programs. These issues are likely to be addressed in legislation to extend the 2 percent payroll tax deduction. Also in the mix for possible action this year are reauthorizations of the No Child Left Behind (NCLB) and Workforce Improvement (WIA) acts, highway-mass transit-highway safety programs, clean water and safe drinking water revolving fund authorizations, and a variety of farm bill programs. A January 2012 Congressional Budget Office report explores these issues in depth and is available at http://www.cbo.gov/doc.cfm?index=12672. NCSL staff contacts: Molly Ramsdell, Jennifer Arguinzoni (transportation), Joy Johnson Wilson, Rachel Morgan (TMA, QI), Sheri Steisel, Emily Wengrovius (TANF), Michael Reed (UEC, WIA), Lee Posey, Michael Reed (NCLB), Tamra Spielvogel, Marcus Peterson (farm bill, revolving funds)


PENSIONS, BAILOUTS, BANKRUPTCY, DEFAULTS

This quartet of issues received much discussion at the outset of the 112th Congress. The chatter dissipated as states continued to address their pension challenges and failed to seek “federal bailouts,” bankruptcies were limited to but a few local governments, and the promise of billions in defaults forecast by a handful of economists never materialized. But the quartet has resurfaced. A Dec. 8, 2011, report by the Joint Economic Committee’s Republicans concludes that the “state pension crisis is virtually unavoidable” and federal action to ensure sustainable state plans, eliminate roadblocks to reform, and prohibit “bailouts” needs examination. A recently released report from Utah Senator Orrin Hatch concludes that federal legislation is needed to “solve what has become an intractable problem (for states and localities).” His report attributes a portion of last August’s federal credit downgrade to “underfunded government pensions at the federal, state and local level” and concludes that defined benefit plans are “inappropriate for state and local governments.”  Stay tuned. NCSL’s most recent update on state pension legislation is available at: http://www.ncsl.org/issues-research/employment-working-families/2011-pension-and-retirement-enacted-legislation.aspx. The JEC and Hatch reports are available at: http://jec.senate.gov/republicans/public/?a=Files.Serve&File_id=1fcd61a8-d8c9-43ab-bcfb-ecdca93c3d01 and http://hatch.senate.gov/public/_cache/files/ecfaf678-a3ec-45a4-a2bf-3bca4fe9475d/Hatch%20Report%20-%20The%20Pension%20Debt%20Crisis%20that%20Threatens%20America.pdf. NCSL staff contacts: Michael Bird, Jeff Hurley (Washington, D.C.), Ron Snell (Denver)


RAISE THE ROOF

The House of Representatives on Wednesday passed a vote of disapproval to raise the nation’s debt by $1.2 trillion as prescribed in the Budget Control Act. The measure, H.J. Res. 98, was approved 239-176 and will now be considered by the Senate, which will likely block it when it reconvenes next week. Under August’s budget agreement, the debt limit is raised after the president notifies Congress that the government is within $100 billion of its borrowing authority, unless Congress votes to deny an increase. The nation’s debt ceiling would be increased to $15.2 trillion. NCSL staff contacts: Michael Bird, Jeff Hurley