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

Volumen 17  Issue 31 - October 8, 2010


The vast majority of state-federal programs will be funded through Dec. 3, 2010, at FY 2010 levels with congressional approval of this year’s first continuing resolution (CR), H.R. 3081. Mandatory and entitlement programs that are structurally state-federal are funded at FY 2011 levels. The Office of Management and Budget (OMB) determined (see OMB Bulletin No.10-03) that any program zeroed out in a House or Senate appropriations bill (even if it has not gone to the second house, which is the case for nearly all of the dozen annual appropriations bills) will not be funded for the 64-day period of the CR. REAL ID, the energy efficiency and conservation block grant, the rural innovation fund, the brownfields redevelopment program and a small number of transit and education grant programs fit into the zero-funded category. H.R. 3081 also provides an extension to Dec. 3, 2010, for the Temporary Assistance for Needy Families (TANF) block grant, TANF contingency fund, TANF supplemental grants and the Child Care and Development Block Grant Fund as sought by NCSL. (NCSL staff contacts: Michael Bird, Jeff Hurley [appropriations], Sheri Steisel, Lee Posey [human services])


Congress reconvenes on Nov. 15. It will address organizational and management matters, including selection of leaders, during its first week back. Congress will recess again for Thanksgiving and return on Nov. 29 and confront myriad hot-button issues, many with significant state-federal implications. Leadership indicates that among its top priorities is passage of an omnibus FY 2011 appropriations bill that will require getting agreement on a domestic discretionary spending limit that affects state-federal programs. Members are as much as $100 billion plus apart on that level at this time. Then comes a parade of programs that expire either on Nov. 30, 2010, Dec. 3, 2010, or Dec. 31, 2010, or have already expired. Decisions have to be made as to whether to extend permanently or temporarily, if at all, the 2001 and 2003 federal tax cuts. Whether to reinstate the federal estate tax at its old rate and exemption levels or keep the scheduled higher rate and lower exemption in current law is also a top candidate for consideration.

Extended unemployment insurance benefits and the law protecting Medicare providers from a substantial reduction in reimbursements expire on Nov. 30. Several bills addressing expired federal tax credits, including the optional state and local sales tax deductibility, remain in “must do” status. State-federal surface transportation programs under SAFETEA-LU lose program and funding certainty on New Year’s Eve. The TANF block grant, TANF supplemental grants and contingency fund, and the Child Care Development block grant are authorized through Dec. 3, 2010. After that, states lose their program and funding certainty, with exceptions, if they are not reauthorized or further extended. State authority to use child support incentive funds to draw a federal match expired on Sept. 30, 2010, and, if not reauthorized and funded, reinstates an intergovernmental unfunded mandate as determined by the Congressional Budget Office.

Leaders in one or both houses of Congress have also touted the need to complete defense authorization, food safety (S. 510) and child nutrition legislation (H.R. 5504, S. 3307), the latter having direct implications for states if not reauthorized or extended. The bottom line is that all of the spending and revenue programs mentioned above have extraordinary fiscal implications for states. They either cause revenue losses or generate needs for offsets that easily total in the hundreds of billions or trillions of dollars depending how long they are extended or reauthorized. And those decisions will be made at or about the same time the president’s National Commission on Fiscal Sustainability reports its recommendations on how to curb annual federal deficits and the cumulative national debt. (NCSL staff contacts: Michael Bird, Jeff Hurley)


NCSL’s Fall Forum will be in Phoenix, Arizona Dec. 8-10, 2010,. Register today at