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

Volume 18   Issue 35 - October 10, 2011 



State-federal grant and entitlement programs are funded for FY 2012 through Nov. 18, 2011, with last week’s enactment of H.R. 2608. This second continuing resolution for FY 2012 funds discretionary programs at 1.5 percent below FY 2011 levels across the board, as required by the Budget Control Act (Pub. L. No. 112-25) enacted this August. Individual program funding for the remainder of FY 2012 is subject to negotiations likely to take place over the next five weeks. Hurdles to overcome include funding differences between the House and Senate and the handling of numerous legislative riders focused primarily on regulatory matters. NCSL staff contacts: Michael Bird, Jeff Hurley


Does the U.S. Constitution’s supremacy clause permit lawsuits against state officials who have reduced Medicaid provider reimbursement rates allegedly in violation of federal law? That’s the gist of the oral arguments presented on Oct. 3, 2011, in the first case of the U.S. Supreme Court’s 2011-2012 term. The case—Douglas v. Independent Living Center of Southern California Inc (U.S. No. 09-958)—stems from reductions made in 2008 and 2009 as part of the California Legislature’s efforts to address budget gaps. Although the Medicaid law does not explicitly permit private lawsuits, the U.S. Court of Appeals for the Ninth Circuit held private parties could sue under the supremacy clause. Stay tuned, a decision is likely early next year. NCSL staff contacts: Joy Johnson Wilson, Rachel Morgan (Medicaid), Susan Parnas Frederick, Jennifer Arguinzoni (Supreme Court)


Senate Majority Leader Harry Reid announced last week that the Senate will vote on S. 1660 this month. The legislation embraces increased funding to states for education, infrastructure and unemployment benefits as proposed by President Obama. The package would impose conditions on states and would authorize a private right of action for certain unemployed claimants. The legislation would also halve the employer and employee payroll tax contributions for one year, excluding state and local governments, and impose a 5.6 percent surtax on individuals earning more than $1 million annually. The bill would provide nearly $450 billion in additional spending and tax relief while raising $453 billion in additional revenues. The Congressional Budget Office estimates the legislation will contribute $5.7 billion to deficit reduction over 10 years. The legislation’s prospects, particularly in the U.S. House of Representatives, are not good. Individual provisions may find their way into other legislative vehicles later this year. NCSL staff contacts: Michael Bird, Jeff Hurley


The U.S. House of Representatives will take up three bills this week that would establish free trade agreements with Colombia, Panama and South Korea. Votes on H.R. 3078, H.R. 3079 and H.R. 3080 will be joined with floor action on H.R. 2832, which would renew retraining programs for American workers harmed by trade pacts. While the House votes to pass this quartet of bills, the Senate Finance Committee will be conducting free trade agreement hearings in anticipation of an October vote on the same package of bills. NCSL staff contact: Michael Reed


In an Oct. 7, 2011, letter to the House Ways and Means Committee, NCSL joined numerous other public and private sector organizations seeking repeal of a 2005 unfunded withholding mandate. Six years ago, Congress passed legislation compelling state and federal governments to withhold 3 percent of payments on goods and services to contractors and vendors, with some exclusions, and imposing various reporting requirements. The American Recovery and Reinvestment Act delayed its start until Jan. 1, 2012. Massachusetts Rep. Jay Kaufman, co-chair of NCSL’s Budgets and Revenue Committee, stated in the letter that “the mandated costs imposed [by this provision] are intolerable and unacceptable in a world where budgets must be balanced.” The full text of the letter is available at U.S. Rep. David Camp (Michigan) introduced H.R. 674 earlier this year to repeal this unfunded mandate. The House Ways and Means Committee will mark up this legislation soon. NCSL staff contacts: Michael Bird, Jeff Hurley