Capitol to Capitol | Jan. 8, 2018

What to Expect in Washington in 2018 

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When Tina Smith, Minnesota’s former Lieutenant Governor, was sworn in last week to replace Senator Al Franken, who resigned the day before among sexual harassment allegations, she became the 22nd woman currently serving in the U.S. Senate, an all-time record.  

"Obviously the biggest challenge we have is now in the Senate, we have 51 Republicans and 49 Democrats. There is no way of getting things done this year without bipartisan support, but I think there are clearly some areas where we can work together."

Senate Majority Whip John Cornyn (R-Texas) on Fox News Friday, Jan. 5.

Although Republicans on Capitol Hill were unable to deliver on several priorities in 2017, notably healthcare reform, they closed out the year on a high note by securing a major legislative victory in tax reform. In 2018, they hope to build upon that momentum by delivering other big achievements, such as an infrastructure package, entitlement reform, and border security. However, another big legislative achievement may be even harder in 2018, given the politics of an election year. And, if both parties in Congress cannot come to agreement on a long-term spending package, given that the current government funding measure expires on Jan. 19, it is possible that the bulk of 2018 could be focused on the passage of short-term funding bills to keep the government open.

Tax Reform

While federal tax reform may be over in Washington, it’s just beginning in the states. As legislatures convene their 2018 legislative sessions, state lawmakers are now combing through the $1.5 trillion tax overhaul to determine how the tax changes may affect their states.

Join us this Friday, Jan. 12 at 2 p.m. ET for a free webinar that features state and federal tax experts who will discuss the implications of the new law and what it means for states. Registration is now open.

NCSL’s Resources for Federal Tax Reform and the States

Infrastructure

President Donald Trump hosted congressional Republican leadership in Camp David over the weekend to plan their 2018 legislative agenda. At the top of the president’s list—infrastructure. According to administration officials, the president wants to make 2018 the “year of infrastructure” and wants to pass a plan that aims to build roads, bridges and highways. But mixed signals are coming from the administration for how to pay for it. According to an article from the Sunday edition of the Washington Post:

"President Trump expressed misgivings about his administration’s infrastructure plan Friday at Camp David, telling Republican leaders that building projects through public-private partnerships is unlikely to work—and that it may be better for the government to pursue a different path.

"Then on Saturday morning, Gary Cohn, the president’s chief economic adviser, delivered a detailed proposal on infrastructure and public-private partnerships that seemed to contradict the president. He said the administration hoped $200 billion in new federal government spending would trigger almost $1 trillion in private spending and local and state spending, according to people familiar with his comments. Cohn seemed to present the plan as the administration’s approach, although the president had suggested such an approach might not work."

While the details may still need to be finalized, expect the administration to present an infrastructure plan in 2018. Whether or not the proposal can secure the necessary votes in Congress remains to be seen. However, infrastructure investment has bipartisan support so look for Democrats to engage Republicans in the hopes that both sides can find common ground for a comprehensive plan. 

Trade

POLITICO reported yesterday that in the coming weeks, the Trump administration is expected to release a plan that would aggressively crackdown on what it views as unfair trade practices. The plan could include new tariffs aimed at countering China’s and other economic competitors’ alleged unfair trade practices, according to three administration officials. The potential actions are just the latest of moves by an administration that has focused on renegotiating trade deals, such as the North American Free Trade Agreement (NAFTA), that, in its view, have been bad for the country. Expect the focus on trade to continue throughout 2018.

Health Care

Conservatives in Washington are hoping that 2018 will provide them with another opportunity to repeal and replace the Affordable Care Act (ACA), but those are lofty ambitions considering that midterm elections loom in November and because the election of Democrat Doug Jones in Alabama to replace the seat vacated by Attorney General Jeff Sessions has reduced the Republican majority in the Senate to 51-49. However, the administration may implement major reforms through executive actions. For instance, according to The Hill, the Trump administration is poised to soon release guidelines that would allow states to add work requirements to their Medicaid programs for the first time, which would be a major change to the 50-year-old program. 

Immigration/DACA/Border Wall

After meeting with House and Senate Republican leaders at Camp David on Saturday, Trump told reporters “The wall is going to happen, or we’re not going to have DACA”, referring to the Deferred Actions of Childhood Arrivals (DACA) program put into place under President Obama. DACA, which Democrats are determined to restore, allowed qualifying individuals who came to the United States illegally as minors to receive a renewable two-year deferred action from deportation and to be eligible for a work permit. Other high-profile immigration issues on the administration’s radar includes eliminating “chain migration,” which gives preferences to families of legal immigrants, and the immigrant visa lottery system. 

Welfare and Entitlement Reform

Last Tuesday, House Majority Whip Steve Scalise (R-La.) told “Fox & Friends” that "the next big thing you're going to see is a need for workers, and I think the next thing we can do is to go and reform those welfare programs that are trapping people in a failed welfare state.” He went on to say that “Let's actually put some work requirements in place so that we can get people back to work, rebuild the middle class."

However, reforming federal welfare programs, such as Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP), or federal entitlement programs, such as Medicaid, Social Security, and Medicare, would be no easy lift, especially in an election year. This is particularly true in the Senate, where Republicans would likely need the votes of at least nine of their Democratic colleagues to pass a comprehensive bill.

Children’s Health Insurance Program (CHIP) 

Congress included $2.85 billion in funding for the Children’s Health Insurance Program (CHIP) in the end of the year short-term funding bill that was intended to fund states’ CHIP programs through the end of March. However, some states may run out of funding sooner as the federal funding may only be able to fund every state through Jan. 19.

CHIP is a state-federal program, which sends matching funds to states to provide low-cost health coverage to children in low-income families. The program has bipartisan support and is expected to be addressed in the upcoming spending bill.

NCSL Contacts: Max Behlke, Jake Lestock

The First Priority: Keeping the Government Open

Another shutdown deadline looms this month as government funding is set to run out on Jan. 19. This is the same day sequestration—or across the board spending cuts—will take effect if lawmakers don’t strike a deal to lift budget caps. While both parties have said they have no desire to force a shutdown and talks among leadership last week were said to be “positive and productive,” leadership knows that they will need to work through some big-ticket items. First, they must settle on new limits for defense and non-defense spending and then will need to wade through controversial issues including stabilizing healthcare markets, additional funding to disaster-hit states, and find a solution to the looming deadline of DACA.

DACA allows undocumented immigrants who entered the country as minors to receive a renewable two-year period of deferred action from deportation. The Trump administration announced last year that it was ending DACA and now Congress has until mid-March to pass a legislative fix or hundreds of thousands of immigrants will be at risk of being deported but challenges lie ahead over the polarizing issue of border security. Trump is requesting $18 billion to build a border wall as part of a $33 billion plan for border security, which may lead to a stand-off with Democrats. Even if a deal is struck on budget caps by Jan. 19, lawmakers will still need to pass another short-term spending bill to extend current funding levels for a few more weeks to come to an agreement on federal spending.

NCSL Contacts: Max Behlke, Jake Lestock

Justice Department Rescinds Policy on Non-Enforcement of State Marijuana Laws 

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The National Aeronautics and Space Administration’s (NASA) past, present and future are all on symbolic display in an epic logo designed to celebrate its 60th birthday in 2018. President Dwight D. Eisenhower signed NASA’s founding legislation, the 1958 National Aeronautics and Space Act, on July 29, 1958. According to a Jan. 3 release, NASA considers its birthday to be Oct. 1, the day the agency opened for business.

On Jan. 4, Attorney General Jeff Sessions issued a memo rescinding guidance from the previous administration establishing a standard of non-interference with state laws legalizing marijuana. The new policy directs U.S. attorneys “to enforce the laws enacted by Congress” in states where marijuana has been legalized to some degree. The Department of Justice (DOJ) considers the measure a “return to the rule of law” while some members of Congress from both parties have gone on the attack to protect state sovereignty. 

Representative Dana Rohrabacher (R-Calif.) released a statement saying, “This is a profound misreading of the Constitution, which allows states, not the heavy-handed federal government, to determine such issues. How ironic that the attorney general has long championed states’ rights when it suits other parts of his agenda!” Senator Cory Gardner (R-Colo.) took to the Senate floor to issue an ultimatum to Sessions saying, “I will be putting a hold on every single nomination from the Department of Justice until Attorney General Jeff Sessions lives up to the commitment he made to me in my pre-confirmation meeting with him. The conversation we had that was specifically about this issue of states’ rights in Colorado.”

Currently, eight states and the District of Columbia have legalized recreational marijuana use, and an additional 22 states allow only medical marijuana use. In May of 2017, NCSL issued a letter to the chair and ranking member of the House Appropriations Committee’s Subcommittee on Commerce, Justice and Science. The letter expressed support for the inclusion of language in FY 2018 appropriations legislation that would prohibit limitations on Department of Justice funding to states that have legalized medical marijuana use.

Additional information on state-level marijuana legislation can be found on NCSL’s website.

NCSL Contacts: Susan Frederick, Lucia Bragg (federal marijuana actions); Karmen Hanson (state marijuana laws).

Financial Services: Significant Federal Reform Possible in 2018 

During the first half of 2018, expect plenty of political energy spent on flood insurance, banking regulations (including Dodd-Frank rollbacks) and many high-profile executive branch nominations.

DYK?

On this day, in…

  • 1790, George Washington delivered the first State of the Union address in New York City.
  • 1835, the national debt of the United States was zero for the first and only time. It lasted exactly one year. 
  • 1867, Congress overrode President Andrew Johnson’s veto of a bill granting all adult male citizens of the District of Columbia the right to vote, and the bill became law. It was the first law in American history that granted African-American men the right to vote. 

If Congress is to tackle flood insurance in any meaningful way, Democrats and Republicans in both chambers will need to find a way to work across the aisle. One thing is certain: The string of recent natural disasters has put the National Flood Insurance Program under unprecedented duress. How to reform the program, however, is still very much up for debate.

Fiscal hawks and financial conservatives want to alleviate taxpayer burden by introducing private market options into the predominately government-run flood insurance program. Coastal delegations and many Democrats are concerned that in doing so, consumers and policyholders will suffer more expensive and less comprehensive flood insurance coverage. Moving forward, both sides will need to provide concessions—but due to the urgency of the situation (funding for the NFIP currently runs out on Jan. 19), Congress will need to act fast.

One area where there is some measurable bipartisan support is banking regulation reform and rollbacks to the 2010 Dodd-Frank legislation. Lawmakers have found common ground on scaling back post-Great Recession regulations on smaller and regional banks—many of which have had a hard time complying with Dodd-Frank requirements. Democrats and Republicans in the Senate seem to be coalescing support around S.2155—the Economic Growth, Regulatory Relief, and Consumer Protection Act. S.2155 passed out of the Senate Committee on Banking, Housing and Urban Affairs last month. The legislation appears to be on a favorable trajectory in the Senate.

The question remains how the more conservative House will view the legislation. House Committee on Financial Services Chairman Jeb Hensarling (R) has long been a vocal critic of Dodd-Frank and earlier this year sponsored legislation designed to roll-back much of Dodd-Frank. Despite differences in the House and Senate, stakeholders are optimistic that Congress can have a bill on the president’s desk within the next few months.

A few blocks up Pennsylvania Avenue, the Trump administration is poised to make a number of nominations to high profile financial regulatory posts in the next few months. Many of these upcoming (and current) nominations will be accompanied by contentious Senate confirmation hearings. Stay tuned for more updates.

NCSL Contact: Ethan Wilson

Also of Note …

  • Orrin Hatch, the longest-serving Republican Senator in U.S. history, announced last Tuesday he will not seek re-election in November. Hatch’s decision increases the likelihood that Mitt Romney, the former Massachusetts governor and Republican presidential candidate, with run for Hatch’s seat. POLITICO
  • The House is expected to consider legislation this week to reauthorize an electronic surveillance program, known as Section 702 of the Foreign Intelligence Surveillance Act (FISA) before Jan. 19 expiration. Bloomberg
  • Here are all the upcoming deadlines facing Congress and the Trump administration. CBS News

Read the Dec. 18, 2017, Capitol-to-Capitol.

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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