Capitol to Capitol | Jan. 29, 2018

 

 State(s) of the Union

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On Sept. 25, 1820, Salem, New Jersey, held a “trial” against… tomatoes.

In the 19th century, the public in Europe and the United States believed that tomatoes were poisonous. To dispel this myth, Colonel Robert Johnston announced that he would eat an entire bag of them outside the courthouse in Salem. Hundreds of people reportedly came to the courthouse to watch him die, and a band played a funeral march while Johnston ate. Not dying after consumption, public opinion of tomatoes changed, which paved the way for them to flourish as a staple of American cuisine. 

Tomorrow, President Donald Trump will deliver his first State of the Union address to Congress and the states will be closely watching to hear how his policy goals for 2018 may affect them. While senior administration officials have suggested that Trump does not plan to roll out any new policies, expect the president to add some meat to the bones of his previously announced policy goals. Perhaps of most importance for states will be the details of Trump’s long-awaited trillion-dollar infrastructure plan. Specifically, states will be interested in how the president plans to pay for it and what portion would fall to state and local governments.

Overall, expect the president to deliver a conciliatory speech that will tout his first-year accomplishments, including his signature legislative achievement, overhaul of the federal tax code. It is also safe to say that Trump will tout the state of the nation’s economy, including the record highs on Wall Street and a 4 percent unemployment rate.

Trump is also likely to pressure Congress on immigration and his long-championed proposal to build a wall along the nation’s border with Mexico. His comments on the subject could set the tone for the ongoing immigration discussions that will again rise to the surface during budget talks next week to keep the government open.     

Also this week—The president will address a joint retreat of House and Senate Republicans in West Virginia. During the retreat, which will take place from Wednesday to Friday at the Greenbrier Resort, Republicans will look to find solutions to immigration and federal funding to keep the government open beyond Feb. 8. 

 

White House to Release Infrastructure Plan

Last week, a purported version of the administration’s infrastructure plan was leaked by multiple media companies, although the White House neither confirmed nor denied the document’s authenticity. The plan contains four “pots” of potential funding and the percentage of total funding that each pot would account for, although the plan did not include an overall dollar amount of funding. Additionally, the document gave no indication as to the source of funding. Later in the week, White House Infrastructure Advisor, DJ Gribbin, indicated the administration was not seeking new revenue for its forthcoming plan and would instead propose a series of spending cuts to existing domestic discretionary spending, including reductions in funding for Amtrak and other transit grant programs.

Within the leaked draft plan, the largest pot of funding, infrastructure incentives, would receive 50 percent of funding and be structured as a competitive grant that would provide funding for projects that also brought in, new non-federal revenues. Federal funds from this pot would only be able to represent a maximum of 20 percent of the project’s cost, a significant reduction from existing programs. Additionally, proposed projects would receive credit for non-federal revenues created within the past three years, but not beyond. Such funds could fund many transportation infrastructure projects but not energy related or broadband projects. Moreover, no specific agency is named as the lead federal agency.

The second pot, transformative projects, would receive 10 percent of overall funding. It would also be a competitive grant program, but run solely by the Department of Commerce and would be aimed at higher risk projects.

The third pot, rural infrastructure, would receive 25 percent of funds and be given to states as grants based on the percentage of rural population and rural highway lane miles in their state. States would be free to use these funds on numerous types of projects including transportation, energy, broadband and water.

The final pot is federal credit and financing and would provide a little over 12 percent to expand existing federal financing programs.

Finally, the plan would remove the annual cap on private activity bonds (PABs), along with other changes to PABs that would increase their value. There are additional provisions in the document that would give new flexibilities to states to raise new transportation revenues, including authority to toll existing interstates and commercialize rest areas.

It remains very unclear if this is the final version that the administration will formally submit as well as whether Congress will go along, propose their own plan, or do nothing.

NCSL Contacts: Ben Husch, Kristen Hildreth

 

Budget Battle at Impasse over DACA 

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While the State of the Union address is now commonplace in modern American politics, the idea of a president personally delivering a speech in Congress was considered unthinkable for nearly half of the nation’s history. In 1913, just a month into his presidency, President Woodrow Wilson changed that when he became the first president since John Adams to deliver a speech in the halls of Congress. Eight months later, he returned to Capitol Hill to give a State of the Union address, which has more-or-less been followed ever since. Wilson believed that the framers of the Constitution had made a mistake in delineating such a strong separation of powers among the three branches of government. Read more from the Washington Post.

After Congress approved an agreement to end a short three-day government shutdown last Monday, a long-term government funding plan is still nowhere in sight. The short-term deal kicked the can down the road, providing funding for government operations only through Feb. 8. They now have 11 days to come to an agreement on one of the most controversial issues to date: The Deferred Action for Childhood Arrivals (DACA) program. Implemented by the Obama administration, the DACA program, called "Dreamers," are individuals who were illegally brought to the country as children who were eligible to qualify for a two-year deferment from deportation. The Trump administration had stated that expiring DACA permits would no longer be renewable beginning on March 5, thus necessitating action by Congress to shield these individuals from deportation.

Last Thursday, Trump proposed a deal that would create a pathway to citizenship for 1.8 million undocumented immigrants brought to the U.S. as children along with $25 billion for border security and dramatic restrictions on legal immigration. This proposal may prove to further complicate ongoing negotiations between a group of senators who have been working to find common ground on the issue for weeks. Senate Minority Leader Chuck Schumer (D-N.Y.) and House Democratic Leader Nancy Pelosi (D-Calif.) have already come out in opposition to the framework released by the White House due to the sweeping changes to the legal immigration system.

The fight has fractured Congress into a number of camps on the issue. A group of House Republicans proposed a much more conservative plan going beyond the president’s and today a group of 48 House lawmakers unveiled a new bipartisan proposal that falls in the middle. Both parties are eager for a long-term budget agreement as Democrats worry about deep cuts to domestic programs and Republican defense hawks grow anxious about the uncertainty of Pentagon funding. A final deal is far from sight and this week will prove crucial to ongoing negotiations. The only thing currently certain is that the clock is ticking and time is quickly running out before another possible shutdown comes knocking.

NCSL Contacts:  Max Behlke, Jake Lestock (Budget) Susan Frederick, Lucia Bragg (Immigration)

 

Sixth Round of the North American Free Trade Agreement (NAFTA) Renegotiations Wrap up Today

Representatives from Mexico, Canada and the U.S. convened (Jan. 23-29) for the sixth round of NAFTA negotiations in Montreal, Canada.  

Later today, U.S. Trade Representative Robert Lighthizer is expected to give an assessment of Canada and Mexico's ideas for advancing talks on controversial U.S. proposals involving auto rules of origin, investor-state dispute settlement and a five-year sunset review mechanism. With some of the toughest NAFTA proposals still awaiting consensus, it seems more likely that talks aimed at reaching a new trade agreement are expected to continue for months beyond the March 31 deadline and could even extend into 2019.

There is also some potential optimism about progress being made around some of the less contentious chapters of the negotiations such as digital trade, food safety and telecommunications. These are all sectors that could be wrapped up at the next round of negotiations that are planned for early March in Mexico City.

NCSL Contact: Jon Jukuri

 

Three States Sue Federal Government Over Tax Law 

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On this Day, Jan. 29, in…

  • 1861, Kansas was admitted as the 34th U.S. state.
  • 1886, Karl Benz patented the first successful gasoline-driven automobile.
  • 1907, Charles Curtis of Kansas became the first U.S. Senator with Native American ancestry. Curtis, a Republican, also went on to become the 31st Vice President of the United States, where he became the first person with acknowledged non-European ancestry to reach either of the highest offices in the Executive Branch. 

Last week, the Democratic governors of New Jersey, Connecticut, and New York stated they plan to challenge the new federal tax reform law, the Tax Cut and Jobs Act, in court. The point of contention is that the law limits the deduction on state and local taxes to $10,000 annually. The group of governors’ plan to argue that the new law undermines some of the basic concepts on which the federal government was founded.

New York governor Andrew Cuomo said, “There is a very strong argument that the bill is a fundamental violation of states’ rights and repugnant to the very concept of federalism that formed this nation."

The governors believe that the law was intended to attack high tax “blue” states that tend to vote Democratic. The group is hopeful that other states will join them, but it is unclear how strong a case the governors have. Legal scholars have questioned whether a lawsuit against the tax bill would be successful and believe it would take years to resolve in the courts, possibly in time for the individual income tax changes expire at the end of 2025.

NCSL Contacts: Max Behlke, Jake Lestock


Also of Note …

  • Scoop: Trump team considers nationalizing 5G network—AXIOS
  • How Trump may end up expanding Medicaid, whether he means to or not

“Republican lawmakers in a half-dozen states are launching fresh efforts to expand Medicaid, the nation’s health insurance program for the poor, as party holdouts who had blocked the expansion say they’re now open to it because of Trump administration guidelines allowing states to impose new requirements that program recipients work to get benefits.”—Washington Post

  • FBI Deputy Director Andrew McCabe is stepping down from the bureau—Fox News
  • The U.S. military reviews its rules as new details of U.S. soldiers and bases emerge—Washington Post

 

Read the Jan. 22, 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