Capitol to Capitol | Oct. 2, 2017

Congress Shifts to Tax Reform

On Sept. 27, Trump and the “Big Six”— which includes Senate Majority Leader Mitch McConnell (R-Ky.), Speaker Paul Ryan (R-Wis.), Senate Finance Chairman Orrin Hatch (R-Utah), House Ways and Means Chairman Kevin Brady (R-Texas), Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn — released their “unified framework” for overhauling the U.S. tax code. The nine-page document will serve as a starting point for tax writers in both the House and the Senate to hash out the rest of the details.

DYK?

The Coinage Act of 1792 established the U.S. Mint, created the dollar as the nation’s standard unit of money, and regulated the country’s coinage. Specifically, the law specified that $10, $5 and $2.50 coins (known as eagles, half-eagles and quarter-eagles) were to be made of their face value in gold, while the dollar, half-dollar, quarter-dollar, dime and half-dime coins were to be made of their value in silver. Criminals found that they could make a profit by filing shavings from the sides of gold and silver coins, and selling it. It did not take long for the U.S. Mint to begin adding ridges to the coins’ edges, a process called “reeding,” to make it impossible to shave them down without the result being obvious. As a side benefit, the reeded edges make counterfeiting more difficult.

But before it fleshes out the details of tax reform, Congress will need to pass a budget resolution that includes tax reform instructions so that it can then use budget reconciliation for tax reform. Budget reconciliation is a legislative maneuver that allows the majority in the Senate to bypass the filibuster process, allowing them to pass legislation with 51 votes, instead of the normal 60. The House is expected to vote on its FY 2018 budget on Thursday. In the Senate, the full Budget Committee is expected to mark up its budget plan, which is quite different than the House bill, later this week.

Concerning tax reform, the Senate budget would allow tax writers to add as much as $1.5 trillion to the deficit over 10 years, but the House budget would not allow a tax plan to add to the deficit. This is just one of several differences that the two chambers will have to reconcile before moving forward on a tax package. Budget aside, the White House is optimistic for a tax plan to move quickly through Congress. “We would hope to be in the Senate in November," Cohn told reporters last week. "And we would hope to have a bill done by this year."

Meanwhile, the administration and GOP leaders will need to package this plan and sell it to the public as tax relief for the middle class and not a windfall for the wealthiest Americans if they want the reform to make it across the finish line. They will also need to secure the necessary votes in the Senate, which is anything but assured given that the slim Republican majority can ill-afford to lose votes of support.

In sum, enacting a tax plan this year might be overly optimistic given the tight congressional calendar and lack of agreement on key policy details. While Republicans are desperate for a win and a legislative victory, tax reform is by no means an easy feat and the process may continue well into 2018.

NCSL Contacts: Max Behlke; Jake Lestock

NCSL Urges Preservation of the SALT Deduction

On Sept. 27, NCSL released the following statement regarding the tax reform framework:

DYK?

Russia did not consider beer, or any beverage that contained less than 10 percent alcohol, to be alcoholic until 2011. They previously classified it as a soft drink. The new restrictions were signed off by then President Dmitry Medvedev as part of an attempt to counter alcohol abuse, which he earlier called a "national calamity."

As a central tenet of tax reform is to provide tax relief for the middle class, NCSL is dismayed that the released framework will eliminate a deduction that is vital to middle class taxpayers, the State and Local Tax (SALT) deduction. The SALT deduction has existed in the federal tax code since its inception, which coincidentally was also when the federal tax code was at its simplest, because federal tax writers were cognizant to not tax an individual’s income twice.

Eliminating this deduction will lead to higher tax burdens for tens of millions of middle class taxpayers of every political affiliation, an outcome contrary to the stated goal of providing meaningful relief to taxpayers. The elimination of the SALT deduction also impedes the ability of states to invest in infrastructure, fund education, and provide the vital public services that Americans expect from their state and local governments.

Ensuring that the incomes of American workers are not taxed twice hardly counts as a special interest tax break or loophole that needs to be closed. NCSL strongly supports preservation of the SALT deduction and opposes any attempt to harm middle class taxpayers and their communities.

Protect state taxpayers. Protect local decision making. Protect SALT.

NCSL Contacts: Max Behlke; Jake Lestock

SCOTUS Gerrymandering Case Could Reshape American Politics

"There is only one prediction that is entirely safe about the upcoming term, and that is it will be momentous." - Justice Ruth Bader Ginsburg, Sept. 20, 2017

Today, the U.S. Supreme Court returns for what could be one of the most consequential terms of the court in recent memory. In addition to cases on immigration, religious freedom, and privacy already on the docket, it will hear oral arguments in a case about partisan gerrymandering in Wisconsin, where a federal court in November 2016 struck down a legislative map for being too partisan. In Gill v. Whitford, a panel of three federal judges ruled that the Wisconsin State Assembly map adopted in 2011 violated the First and 14th Amendments to the Constitution. If the court ultimately rules against the plaintiffs, it could mean that no amount of partisan bias could make electoral districts unconstitutional. But on the flipside, if the court sides with the plaintiffs, it could ultimately lead to drastic changes of electoral maps and how state legislatures draw them.

Senate Releases Bipartisan Autonomous Vehicle Legislation That Pre-empts States

On Sep. 28, Senate Commerce Committee Chairman John Thune (R-S.D.), and Senators Gary Peters (D-Mich.), Roy Blunt (R-Mo.), and Debbie Stabenow (D-Mich.) unveiled legislation regarding autonomous vehicles—the American Vision for Safer Transportation Through Advancement of Revolutionary Technologies (AV START) Act. The AV START Act is similar to the House passed SELF DRIVE but it also contains several significant differences as well as areas of concerns for states, notably in the areas of pre-emption and safety evaluation reports. The Commerce Committee will consider the legislation at a markup schedule for Oct. 4.

DYK?

On this Day in…

  • 1996: President Bill Clinton signed the Electronic Freedom of Information Act Amendments (E-FOIA), which required executive branch agencies to make certain types of records, created on or after Nov. 1, 1996, to be made available electronically. The amendments also required agencies to provide electronic reading rooms for citizens to use and extended the response time to FOIA requests from 10 days to 20 business days.
  • 1980: Pennsylvania Congressman Michael Myers became the first member of either chamber of Congress to be expelled since the Civil War, for his involvement in the Abscam scandal. As part of the public corruption investigation, Myers was videotaped accepting a $50,000 bribe from undercover FBI Agents.
  • 1967:Thurgood Marshall was sworn in as the first African-American justice of the U.S. Supreme Court .

Pre-emption

The Senate committee bill currently includes a pre-emption section identical to that included in the bill passed by the House. Specifically, the language would pre-empt states from regulating the performance of automated driving systems (ADS) as well as any “unreasonable restrictions” concerning registration, licensing, driving education and training, insurance, law enforcement, crash investigations, safety and emissions inspections, congestion management of vehicles on the street with in a state or political subdivision of a state, or traffic on the design, construction, or performance of highly automated vehicles or ADS. NCSL Urges State Legislators to Contact their Congressional Delegations to Voice their Opposition to the Pre-Emption.

Additionally, the bill would prohibit a state from issuing licenses for a dedicated highly automated vehicle (DHAV), which the bill defines as a level 4 or 5 automated vehicle, in a way that discriminates against those with disabilities.

A full NCSL analysis of the AV START legislation can be read here.

NCSL Contacts: Ben Husch; Kristen Hildreth

A Deeper Dive on Transportation, Energy, Environment and Agriculture Policy

For those looking for a deep dive on federal Transportation, Energy, Environment and Agriculture topics, please check out the September editions of our Natural Resources and Infrastructure Committee’s three monthly newsletters:

NCSL Contacts: Ben Husch; Kristen Hildreth

Supreme Court Will Hear Far-Reaching Union Case

The U.S. Supreme Court agreed on Thursday to hear Janus v. AFSCME, a case challenging the legality of union fees that could have serious ramifications for public sector unions. The case revolves around Illinois state employee Mark Janus, who contends the requirement that he pay union fees to the American Federation of State, County, and Municipal Employees (AFSCME) violates his free speech rights. The justices considered this issue once before, when the court took up Friedrichs v. California Teachers Association last year. That case was brought by a California teacher, Rebecca Friedrichs, and resulted in a 4-4 deadlock following the death of Justice Antonin Scalia. Should the justices vote the same way, Neil Gorsuch will be in a position to offer the final tie-breaking vote.

NCSL Contacts: Joan Wodiska, Lucia Bragg

Trump Signs Hurricane Relief Legislation for Schools, Issues Hurricane Relief Guidance

The president signed S. 1866 into law on Friday after the bill passed through Congress last week. The bill offers various forms of support for schools and colleges impacted by the recent hurricanes. Specifically, the law:

  • Allows the U.S. Department of Education to waive a requirement that higher education institutions contribute matching funds as part of the Federal Work Study and Supplemental Educational Opportunity Grant programs.
  • Redistributes the unused funds in those programs to colleges affected by the hurricanes.
  • Provides access for private schools to funds available under the Project School Emergency Response to Violence program.

The law comes on the heels of new non-regulatory hurricane relief guidance, issued by the department on Sept. 22. The guidance identifies areas of federal law that are subject to flexibility and waivers for grantees and program participants impacted by natural disasters. The guidance focuses on support and flexibility options available to schools, state educational agencies, state lead agencies, local educational agencies, local early intervention service programs and providers, State Vocational Rehabilitation agencies, the Department of the Interior’s Bureau of Indian Education (BIE)-funded schools, Tribes, and postsecondary institutions with a focus on the 2017 hurricanes. The department will hold a webinar discussing the details of the guidance on Thursday, Oct. 5 at 2 p.m. ET. Interested participants may register here.

NCSL Contacts: Joan Wodiska, Lucia Bragg

HHS Secretary Pays Price for Travel

On Friday, Health and Human Services Secretary Tom Price resigned for his use of private charter and military jets to travel around the country at taxpayer expense. Don Wright, a longtime U. S. Health and Human Services (HHS) employee, doctor and public health expert was named acting HHS secretary Friday following Price's resignation. Soon after Price stepped down, Washington began speculating about possible candidates for his replacement, including:

  • Scott Gottlieb, the commissioner of the Food and Drug Administration
  • Seema Verma, the administrator of the Centers for Medicare and Medicaid Services
  • David Shulkin, the secretary of veterans affairs
  • Former Louisiana Governor Bobby Jindal
  • Florida Governor Rick Scott

NCSL Contact: Haley Nicholson

Also of Note…

  • Federal Funding for the Children’s Health Insurance Program (CHIP), which covers 9 million children, expired on Sept. 30. If Congress does not act, the Kaiser Family Foundation expects 10 states to run out of money for the program by the end of the year, and 21 states will be out of money by March 2018.

NCSL Contact: Haley Nicholson

  • The National Flood Insurance Program, a federal program that aims to provide affordable flood insurance to property owners, has depleted its borrowing authority after a series of devastating hurricanes over the past several weeks. The Federal Emergency Management Agency (FEMA), which runs the program, notified Congress on Sept. 20 that it borrowed $5.8 billion from the Treasury to fund losses this year, including those incurred by Hurricanes Harvey and Irma, and “anticipated programmatic activities.” The balance of FEMA's remaining borrowing authority is now zero, according to the agency.

NCSL Contact: Ethan Wilson

Read the Sept. 25, 2017, Capitol-to-Capitol.

Have any factoids or trivia about your state? Let us know here and we may include it in a future edition of Capitol to Capitol! 

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NCSL's Advocacy in Washington

NCSL's Washington staff advocate Congress, the White House, and federal agencies on behalf of state legislatures in accord with the policy directives and resolutions that are recommended by the NCSL Standing Committees and adopted by the full conference at the annual NCSL Legislative Summit Business Meeting. As a result of the advocacy that is guided by these policies positions, NCSL is recognized as a formidable lobbying force in state-federal relations.

NCSL Staff in Washington, D.C.

  • Neal Osten | 202-624-8660 | Molly Ramsdell | 202-624-3584 | Directors
  • Max Behlke | 202-624-3586 | Budgets and Revenue
  • Danielle Dean | 202-624-8698 | Communications, Financial Services
  • Susan Frederick | 202-624-3566 | Law, Criminal Justice, and Public Safety
  • Ben Husch | 202-624-7779 | Natural Resources and Infrastructure 
  • Jon Jukuri  | 202-624-8663 | Labor, Economic Development and International Trade
  • Haley Nicholson | 202-624-8662 | Health
  • Ethan Wilson | 202-624-8686 | Commerce and Financial Services
  • Joan Wodiska | 202-624-3558 | Education