An Information Service of NCSL's Standing Committees
Volume 18 Issue 45- December 22, 2011
Has Congress’ 2011 session concluded? Maybe. On Dec. 17, the Senate passed its version of H.R. 3630, to extend the current 2 percent employee payroll tax reduction and supplemental unemployment benefits to Feb. 29, 2012. Both expire soon. But on Dec. 20, the House voted 234-193 to go to conference over the differences in the two versions of the bill. The House version would extend the payroll tax reduction and unemployment benefits for only one year. Disagreements over how to offset the costs of both bills have persisted from the outset. Both bills also delay a scheduled reduction in Medicare provider reimbursements. Other disagreements also have disrupted and delayed the process. Two key unemployment insurance provisions, Emergency Unemployment Compensation and Extended Benefits (which are both currently 100 percent federally funded), and other state-federal programs are caught in the middle of House-Senate-administration differences. For example, authority for the Temporary Assistance for Needy Families (TANF) block grant expires on Dec. 31, 2011. The Department of Health and Human Services is sending a letter to state agency commissioners with guidance on how the administration intends to deal with a lapse in reauthorization for TANF. Their view is that the fundamental statute from 1996 has not been repealed. Therefore, states have the authority to continue to operate the program on January 1, 2012. If states have unobligated carry-over funds from prior years or first quarter FY 2012, they can use those funds. However, there will be no new federal funds available for TANF until the program is either extended or reauthorized. Also caught in the morass of expiring authority are the Transitional Medical Assistance and the Qualified Individual programs. Authority for all three programs would have been extended via either House or Senate version, although the House has insisted on certain adjustments to the TANF program before authorizing an extension.
Now What? The Senate has recessed until the end of January 2012, although it will periodically conduct pro forma sessions (over an issue regarding interim presidential appointments). Most House members have returned home as well. House Republicans have named conferees to negotiate with the Senate, but no other caucus at this point has signaled a desire to go to conference. NCSL staff contacts: Michael Bird, Jeff Hurley (legislation generally), Sheri Steisel, Emily Wengrovius (TANF), Joy Johnson Wilson, Rachel Morgan (TMA, QI, Medicare provider reimbursements), Michael Reed (unemployment benefits)
HEALTH CARE REFORM UPDATE
The U.S. Supreme Court has scheduled oral arguments on the constitutional challenges to the federal health care reform law for March 26-28, 2012. The nine justices will open with questions regarding the individual mandate and conclude by discussing Medicaid expansion provisions. On Dec. 16, the U.S. Department of Health and Human Services released a bulletin outlining proposed policies that will give states more flexibility and freedom in determining “essential health benefits.” These benefits are all the items and services required to be offered in individual and small group markets, both inside and outside of health insurance exchanges. NCSL staff contacts: Joy Johnson Wilson, Rachel Morgan
77 AND OUT
Congressional appropriations work is finally complete for FY 2012, 77 days after the start of the federal fiscal year. States now have certainty regarding funding levels for state-federal discretionary, mandatory and entitlement programs as they begin FY 2013 budget deliberations. Congress used “minibus” (H.R. 2112) and “megabus” (H.R. 2055) legislation as the vehicles for finishing up the dozen annual appropriations measures. It took a third vehicle, H.R. 3672, to ensure that states would receive anticipated emergency disaster assistance funding for FY 2012. By virtue of their appropriations actions, state lawmakers should expect a 2.7 percent overall reduction in state-federal discretionary programs in FY 2012, according to calculations made by the Federal Funds Information for the States. Programs taking the biggest hits are the low-income energy and weatherization assistance programs, with reductions of 26 percent and 61 percent, respectively. In FY 2013, the across-the-board cuts from sequestration, due to the failure of the super committee, will reduce state-federal grant programs by 8 percent to 9 percent. With programs for ‘vulnerable populations’ exempt—such as Medicaid, the supplemental nutrition assistance program and TANF—areas such as education, energy, environment and justice will be the most affected. As for FY 2014 and beyond? The only certainty is uncertainty. No longer restricted to across-the-board spending cuts, appropriators will determine which programs will be targeted for reductions. The difficulty for Congress to pass a budget on time and the looming possibility of reforming the tax code further muddy the water. A detailed breakdown of this information is available at: http://www.ncsl.org/default.aspx?TabId=23997. Stay tuned, NCSL will update this webpage as federal fiscal policy becomes clear. NCSL staff contacts: Michael Bird, Jeff Hurley