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

Volume 17   Issue 25 - July 1, 2010

Medicaid Match Extension Falls Short; New FMAP Legislation Introduced

Hope for an additional six months of an enhanced Medicaid match was dealt a setback late last week as another cloture vote failed (57-41) in the Senate on H.R. 4213. Due to this action, Senate Majority Leader Harry Reid stated that he will remove the tax extenders bill from floor consideration for the immediate future. One of the attempts made last week to make the legislation more appealing was to find additional offsets and scale back the enhanced FMAP from 6.2 percent to 3.2 percent for January to March 2011 and 1.2 percent for April to June 2011. The bill totaled $109 billion, with all but $33.3 billion for extending unemployment benefits offset. While currently there is no timetable for future consideration of the FMAP extension, state legislators should continue to emphasize to their congressional delegations the importance FMAP funding would have on state budgets. New legislation sponsored by Massachusetts Senator Scott Brown has surfaced that would offer the scaled-back FMAP extension previously discussed in H.R. 4213. The bill, titled the Fiscally Responsible Relief for Our States Act of 2010, would use unspent funds from the Recovery Act under the discretion of the Director of the Office of Management and Budget. Stay tuned.

Meanwhile, the Senate failed by a vote of 59-37 to pass legislation that would retroactively reinstate and extend federal unemployment insurance. The bill, an amendment to H.R. 4213 which stripped all provisions besides unemployment insurance, would have extended benefits through November 2010. The House is expected to vote on similar legislation by the end of the week. (NCSL staff contacts: Michael Bird, Jeff Hurley (H.R. 4213 generally), Joy Johnson Wilson, Rachel Morgan (Medicaid))

Main Street Fairness Act Introduced

Congressman William Delahunt of Massachusetts today introduced the Main Street Fairness Act, H.R. 5660, which when enacted will give states that comply with the Streamlined Sales and Use Tax Agreement the authority to require all out of state sellers to collect those states’ sales taxes. Twenty-four states have enacted legislation to comply to the Agreement. The Main Street Fairness Act would give states the authority to collect over $23 billion in currently uncollected out of state sales taxes. State legislators are urged to use the congressional July 4 recess to urge their members to sponsor and support H.R. 5660. (NCSL Staff contacts: Neal Osten, Max Behlke)

Senate Awaits Final Vote on Financial Reform

Deliberations between the House and Senate on financial reform appear to be in the last stages. On June 30, the House approved a conference report of H.R. 4173 by a vote of 237-192. Although the conference agreement includes state regulators as non-voting members in the Financial Stability Oversight Council, it also establishes the Federal Insurance Office, which may potentially duplicate and interfere with state insurance regulation. However, NCSL and other state groups were successful in limiting the scope of the Federal Insurance Office’s authority during conference negotiations. Final action in the Senate, however, will likely not conclude until after the July 4 recess. (NCSL staff contacts: Neal Osten, Jeff Hurley)

Deficit Commission Meets; NCSL Provides Testimony

The National Commission on Fiscal Responsibility and Reform met on June 30 for the third time, focusing on the Congressional Budget Office’s Long-Term Budget Outlook Report. Commission co-chairman Erskine Bowles offered insight into what recommendations the Commission may present to reduce long-term deficits. Bowles noted the need for reforming the tax code, curbing tax expenditures and that potential recommendations should not take place before fiscal year 2012, as the economy right now is “too fragile” for significant change. After the meeting, the Commission held a public hearing to elicit ideas on addressing the country’s deficit. Maryland Delegate Sheila Hixson provided written testimony on behalf of NCSL, which is available here: (NCSL staff contacts: Michael Bird, Jeff Hurley)