Capitol to Capitol is NCSL's state-federal newsletter.
Connecticut and Rhode Island are the only states to reject the ratification of the 18th Amendment, which effectively established the prohibition of alcoholic beverages in the U.S. The 18th Amendment was repealed after 13 years of prohibition by the 21st Amendment, which is unique among the 27 amendments because it is the only one to repeal a prior amendment. Also, it is only amendment to have been ratified by state ratifying conventions rather than state legislatures.
A $1.2 trillion funding package is expected to be unveiled Monday night to fund the government through the end of FY 2018, which concludes on Sept. 30. Congress only has five days to pass the omnibus legislation as current government funding expires at midnight Friday. Needless to say, the legislation will be the primary focus on Capitol Hill this week. What could go wrong?
The omnibus package will follow the spending guidelines established by the two-year budget deal Congress passed in February, which increased defense spending by $80 billion and nondefense spending by $63 billion in FY 2018. Congressional appropriators have been furiously working to finalize the new funding levels for government programs since the passage of the budget. At the same time, congressional leaders have been negotiating the inclusion of numerous policy provisions. Negotiations have been intense given that the spending bill will be one of the last legislative vehicles for lawmakers’ pet issues before the midterm elections. Democrats have outsized influence in the negotiations as their votes will be necessary for passing the bill in both chambers. While at least nine Democrats will need to join every Republican in the Senate to pass the bill, Democratic votes are also expected for passage in the House as the most conservative House Republicans, including members of the Freedom Caucus members, are expected to vote against the bill.
The legislation’s policy provisions could consist of anything from school safety to fixes to the recently enacted tax reform bill. However, it is unlikely that the massive package will include language regarding the Deferred Action for Childhood Arrivals (DACA) program as Democratic leaders have backed off of their demands for including “Dreamer” protections in the budget negotiations because of the recent federal court action that has temporarily maintained the DACA program. However, the legislation is expected to include a four-month extension of the Federal Aviation Administration (FAA). Legal authority for the agency expires at the end of the month.
NCSL is closely monitoring the budget negotiations and will release a summary of the legislation later this week, assuming the bill is released tonight. If the legislation hits another roadblock, which is in the realm of possibilities, expect Congress to pass another short-term continuing resolution to keep the government open beyond the two-week congressional recess, which begins next week.
NCSL Contacts: Max Behlke, Jake Lestock
Last Wednesday, the U.S. Senate passed S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final count was 67-31, with Senators Martin Heinrich (D-N.M.) and John McCain (R-Ariz.) not voting. Ultimately, 50 Republicans and 17 Democrats voted for the bill. The final vote-count represents a significant bipartisan effort by members of the Senate Committee on Banking, Housing and Urban Affairs, including Chairman Mike Crapo (R-Idaho) and Senator Mark Warner (D-Va.).
The bill is making news for a number of provisions, including one that raises the threshold at which banks and some nonbank institutions are labeled as systemically important financial institution (SIFI). The current level, set by Dodd-Frank in 2010, is $50 billion or more in assets. S.2155 raises that threshold to $250 billion, but the Federal Reserve retains the power to levy heightened prudential standards on banks with $100 billion to $250 billion in assets.
Of particular importance to state and local governments is a provision in the bill that would reclassify municipal bonds as level 2B high quality liquid assets (HQLA), a significant change that would allow municipal debt to satisfy the Fed’s requirement that SIFIs hold adequate amounts of HQLA. This change in municipal bond classification would result in an incentive for large financial institutions to acquire more municipal debt, i.e. bonds originated by states and municipalities to fund public projects such as transportation infrastructure, water treatment plants, parks and much more.
Despite the bipartisan effort in the Senate, the bill’s fate in the House is far from assured. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) says he intends to incorporate other provisions into the legislation. Democrats in the Senate stress the bill’s fragile bipartisan foundation and are saying any changes at this point could derail the whole effort. If the House and the Senate cannot agree on additional provisions, the future of the bill will continue to hang in the balance as the elections in November move ever closer.
NCSL Contacts: Ethan Wilson
On March 12, President Donald Trump announced a series of policy recommendations designed to improve school security. The list of activities as outlined by the White House include:
On this Day, March 19, in …
As part the announcement, the president also announced the creation of a Federal Commission on School Safety to be chaired by Education Secretary Betsy DeVos. The commission will study and make recommendations on the following areas:
NCSL Contact: Joan Wodiska
Trump is traveling today to New Hampshire, one of the states hardest-hit by the opioid crisis, to propose a plan for stricter penalties, including the death penalty, for drug traffickers. The stiffer penalties for drug dealers is part of a three-part plan the administration released last night to combat the opioid epidemic. In general, the plan aims to reduce the demand for opioids by slowing overprescribing, cutting off the supply of illegal drugs and helping those who are addicted.
NCSL Contacts: Susan Frederick (law), Lucia Bragg (law), Haley Nicholson (Health), Abbie Gruwell (Human Services)
The 25 percent tariffs on steel and 10 percent tariffs on aluminum are set to go into effect this Friday.
Thirty-six hours after his inauguration on March 4, 1933, President Franklin D. Roosevelt declared a "bank holiday," which closed all U.S. banks and froze all financial transactions for a week to stem bank runs during the financial crisis of the Great Depression. Following the bank holiday, on March 9, Congress introduced, passed, and the president signed the Emergency Banking Relief Act, which allowed banks to reopen as soon as examiners had found them to be financially secure. Within three days, 5,000 banks had been given permission to be re-opened
While Mexico and Canada have been exempted from the tariffs as they continue to renegotiate the North American Free Trade Agreement (NAFTA), foreign leaders and lobbyists from international companies have descended upon Washington to seek similar exemptions and to promote the importance of free trade. There is a considerable amount of uncertainty about what precisely will qualify trading partners for an exemption since the only reference the administration provides is “protecting America’s national security and reducing its trade deficit.”
Last Friday, the European Union published a 10-page list of American products that may be targets for retaliation if the steel and aluminum tariffs go into effect; including Kentucky bourbon, cranberries, motorcycles and tobacco among other major U.S. exports.
The Trump administration is also said to be considering additional broad ranging tariffs and penalties aimed at Chinese investments in the U.S. to punish Beijing for alleged theft of intellectual property. Just last week, Trump blocked what would have been the largest technology deal in history when he halted Broadcom, a Singapore-based tech company, from making a bid to merge with the U.S. chip maker Qualcomm, citing “national security concerns.” The administration blocked the merger for fear it could give Chinese companies a big advantage in the rollout of 5G telecommunications deployment. President Barack Obama blocked a tech merger in 2016 for similar reasons.
Yesterday, the U.S. Chamber of Commerce and 44 other associations sent a letter urging the president not to impose tariffs on billions of dollars of Chinese goods stating, “The imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers.”
NCSL Contact: Jon Jukuri
Read the March 12, 2018 Capitol-to-Capitol.
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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.