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

Volume 18   Issue 38 - October 28, 2011
 

STATES SPARED UNFUNDED MANDATE/SPENDING INCREASE

Yesterday the U.S. House of Representatives overwhelmingly approved H.R. 674, which would repeal a five-year-old, never-enforced law requiring state, local and federal governments to withhold 3 percent of payments to certain vendors. H.R. 674 has the solid support of NCSL, other state and local government organizations, and the business community, which contributed significantly to its 405-16 floor vote. States will save billions in the long term by not having to reconfigure accounting and procurement systems. They will also save by avoiding increased costs for contract and vendor services that the Congressional Budget Office (CBO) estimated would have cost the federal government more than $7 billion through 2021. The original law  is scheduled to take effect on Jan. 1, 2012. Both the administration and a substantial number of U.S. senators support repeal. Differences remain on how to offset the legislation’s federal revenue loss, which is estimated to be $11 billion over ten years. To address those differences, the House also passed H.R. 2576, which would modify how adjusted gross income is calculated when determining eligibility for Medicaid and other health programs. H.R. 2576, which passed 262-157, would require Social Security benefits to be included in income calculations. It too would save state and federal governments billions in prospective Medicaid payments. Repeal is coming, although when and how are  uncertain. The letter NCSL submitted to the House Ways and Means Committee on Oct. 6, is available here: http://www.ncsl.org/default.aspx?TabId=23671. NCSL staff contacts: Michael Bird, Jeff Hurley (tax provisions), Joy Johnson Wilson, Rachel Morgan (Medicaid)


HITTING THE HOME STRETCH

With only 26 days remaining for the Joint Select Committee on Deficit Reduction to provide legislative language to reduce the deficit by $1.2 trillion to $1.5 trillion, partisan proposals were released this week in an effort to “go big” and exceed the threshold in the Budget Control Act. The Democratic plan would reduce the deficit between $2.5trillion and $3 trillion, with a combination of revenue increases and spending cuts, including $500 billion in savings from Medicaid and Medicare. The Republican $2.2 trillion counteroffer would rely on discretionary cuts and non-tax  revenue. Although details of each plan are scarce, neither plan has much hope in passing both chambers of Congress. Additionally, close to 100 rank-and-file members of Congress sent a letter to the joint committee urging them to achieve $4 trillion in savings. On Wednesday, the committee held its third public hearing, with Director of the Congressional Budget Office Douglas Elmendorf the lone panelist. After the committee’s first two hearings focused on entitlements and tax reform, Wednesday’s session delved into discretionary spending, and more specifically, how reducing the deficit may affect defense spending. Director Elmendorf estimated that, if sequestration is triggered, the defense budget may be cut by $882 billion over 10 years. The committee’s next hearing is Nov. 1, with the co-chairs of both the National Commission on Fiscal Responsibility and Reform, and the Bipartisan Policy Center discussing their previous debt proposals. NCSL staff contacts: Michael Bird, Jeff Hurley


STATE FLEXIBILITY PRESERVED, COST SHIFTS AVOIDED

NCSL and others helped blocked passage last week of a Senate floor amendment that would have stripped states of the flexibility they now have to use cost-effective mechanisms to determine the eligibility criteria for low-income programs. The failed amendment, offered by Alabama Senator Jeff Sessions, would have ended “categorical eligibility” determinations for the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). Currently, 40 states exercise the categorical eligibility option in which SNAP eligibility goes hand-in-hand with determinations to qualify for such programs as TANF, SSI or Medicaid. Passage of Senator Sessions’ amendment would have automatically increased state administrative costs and eliminated state program flexibility, both of which NCSL is working vigorously to avoid in federal deficit reduction efforts. The amendment failed 41 - 58 but will likely resurface. NCSL staff contacts: Sheri Steisel, Emily Wengrovius


ON THE HORIZON

The NCSL 2011 Fall Forum will be held Nov. 30 – Dec. 2 in Tampa, Florida. The Fall Forum gives you the chance to advance the States' Agenda and tackle the difficult policy issues of our time. The deadline for making hotel reservations is Nov. 7, 2011. For more information visit http://www.ncsl.org/Default.aspx?TabID=714&tabs=2638,122,920#920.