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

Volume 19   Issue 15 - May 11, 2012


The House took a step forward on the bumpy road to deficit reduction when it passed H.R. 5652, the Sequester Replacement Reconciliation Act, on a 218-199 vote. It would eliminate the 10-year automatic sequester of defense and domestic discretionary spending (for $1.2 trillion in total savings) required by the Budget Control Act of 2011. In its place, and in combination with the House Budget Resolution’s significant long-term deficit reduction proposal and FY 2013 appropriations bills, would be one-year reductions in select entitlement programs ($18 billion in savings) and in domestic discretionary spending (for $19 billion). The act—along with other savings in the budget resolution and appropriations measures—would save about $261 billion over 10 years. 

Concerned that this plan would “disproportionately affect states,” NCSL leaders wrote a letter to the entire U.S. House on May 10. The letter, available at, asked for meetings with state legislators to find a more comprehensive and balanced approach to the “mutually shared [deficit reduction] goal.” Texas Representative Dan Flynn and Massachusetts Representative Jay Kaufman, co-chairs of NCSL's Budgets and Revenue Committee, signed the letter. 

How would states fare under H.R. 5652? Billions in costs would shift to states with the proposed changes in the Supplemental Nutrition Assistance Program and repeal of the Social Services Block Grant. The legislation would produce federal Medicaid “savings” of more than $15 billion over 10 years by rebasing Medicaid payments to Disproportionate Share Hospitals and lowering the state provider tax hold-harmless threshold. State medical malpractice laws would be preempted, and sequester protections for FY 2013 would be lifted on low-income state-federal mandatory and entitlement programs. In addition, the budget resolution calls for saving $19 billion in FY 2013 discretionary spending, which is home to many state-federal programs. The Sequester Replacement Reconciliation Act would transfer some of the savings into FY 2013 defense spending and also remove it from the sequester table. On the plus side for states, H.R. 5652 would provide flexibility and cost savings by repealing maintenance-of-effort requirements in The Patient Protection and Affordable Care Act. What’s next? The act is guaranteed to be rejected by Senate Democrats who say they will develop FY 2013 appropriations based on the spending caps in the Budget Control Act instead. Everything points to a late-year lame duck showdown ending, perhaps, by punting to the next Congress. NCSL staff contacts: Michael Bird, Jeff Hurley (budget generally), Joy Johnson Wilson, Rachel Morgan (Medicaid), Sheri Steisel, Emily Wengrovius (SNAP, SSBG), Susan Parnas Frederick, Jennifer Arguinzoni (medical malpractice)


NCSL submitted comments this week to the Department of Health and Human Services expressing state concerns regarding two sets of final and interim final health care rules that would implement key provisions in The Patient Protection and Affordable Care Act (PPACA). The comment periods ended on May 7 for rules governing the Medicaid program and eligibility changes under the PPACA, and May 11 for rules guiding the establishment of exchanges and Qualified Health Plans (QHPs), and exchange standards for employers. Full text of the comments is available at: . NCSL staff contacts: Joy Johnson Wilson, Rachel Morgan


The House passed legislation to reauthorize the Export-Import Bank on Wednesday. On a 330-93 vote, the bipartisan agreement would renew the bank’s lending authority through September 2014, and increase its borrowing limit to $140 billion. Connecticut Senator Gary LeBeau and Alaska Representative Anna Fairclough, co-chairs of NCSL’s Labor and Economic Development Committee, urged congressional leaders to take both actions in a letter last month that can be viewed here: It’s now up to the Senate to pass the bill before reauthorization expires at the end of May. NCSL staff contacts: Jon Jukuri, Michael Reed