Capitol to Capitol is NCSL's state-federal newsletter.
After legislation to repeal and replace the Affordable Care Act (ACA) failed in a dramatic Senate vote in July, it appeared that Republicans on Capitol Hill had dropped the effort to focus on tax reform. However, Senators Lindsay Graham (R-S.C.) and Bill Cassidy (R-La.) are reviving the health care debate and unveiled legislation to repeal and replace the ACA in a last-ditch effort to replace the law before Sept. 30, the last day of the fiscal year. When the new fiscal year begins on Oct. 1, the opportunity to use budget reconciliation for FY 2017 will have passed, which means that 60 votes, rather than a simple majority, will be needed to pass a health care measure in the Senate since congressional leaders plan to use the FY 2018 budget measure to enact tax reform.
A sitting U.S. president was once arrested for excessive speeding in Washington, D.C. While driving his horse and buggy at a speed of what the arresting officer, William West, thought was excessive, the officer reportedly told President Grant that “I am very sorry, Mr. President, to have to do it, for you are the nation’s chief executive, but my duty is plain, sir: I shall have to place you under arrest!”
As was the case in July, Washington will be closely watching to see if at least 50 Senate Republicans will support the new health care bill, which would replace the ACA’s tax subsidies with block grants, end the law's individual insurance mandate and scale back its Medicaid expansion. Unlike the previous bill, however, Majority Leader Mitch McConnell (R-Ky.) has signaled that he will not bring the Graham-Cassidy legislation to the floor unless he is confident that he has the votes. Some Republicans believe that if the bill were put on the floor today, it would have the support of 49 senators. "All we need is one more," Senator Pat Roberts (R-Kan.) said of the repeal effort, which failed in July after GOP Senators John McCain of Arizona, Susan Collins of Maine and Lisa Murkowski of Alaska voted “no” on the repeal bill. Therefore, the White House and the leadership whip team have been working furiously to secure the necessary votes. McConnell and his lieutenants will assess support for the legislation this week when the Senate returns to town for a three-day work week.
Given that the Congressional Budget Office (CBO) has yet to score the legislation, a vote would not come until next week. And if the Senate does pass the measure, it is unclear if the House would take it up given that the chamber, which passed a drastically different bill this spring, would not be able to amend it due to the Senate’s budget reconciliation deadline.
Needless to say, the fate of the ACA, at least in the short term, rests in the Senate.
Next week, House Republicans are promising to release a plan to overhaul the tax code, but lead congressional Republicans and the White House have yet to agree on key details of the framework, including whether to curb or eliminate the deduction for state and local taxes.
On Sept. 13, 1948, Margaret Chase Smith was elected as the first female senator of Maine, which made her the first woman to serve in both the United States House of Representatives and Senate. Smith was re–elected to the Senate three more times by comfortable majorities and is the longest serving Republican female senator.
“Right now, the Senate and the House are pretty far apart,” said one Republican aide, whose account was confirmed by another source who stated, “There’s serious frustration.” The lack of agreement was made clear last week by Senate Finance Chairman Orrin Hatch (R-Utah), who said that his committee would not be a “rubber stamp” for whatever is proposed. “Any forthcoming documents may be viewed as guidance or potential signposts for drafting legislation,” Hatch continued. “But, at the end of the day, my goal is to produce a bill that can get through this committee.”
If Republicans want to pass tax reform this year, they will need to come to an agreement quickly as the days left on the congressional calendar are quickly dwindling. In addition to possibly considering another health care bill, Congress will have to address a slew of other issues before year’s end, including another budget bill in December, which will almost certainly be contentious. If they are forced to push their tax reform bill to next year, they will have to act quickly before the midterm election cycle ramps up.
NCSL Contacts: Max Behlke, Jake Lestock
Health care policy has seen a flurry of activity in the U.S. Senate these past few weeks. The Health Education Labor and Pensions Committee (HELP) held four hearings to hear from state insurance commissioners, governors and health policy experts on ways to stabilize the health insurance market. HELP Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) announced the hearings were part of a bipartisan effort to address: future cost sharing payments (CSR payments) and flexibility for 1332 waivers.
CSR payments have been part of many ACA-related conversations in Congress over the past few months. When the payments were initially established under the Obama administration, congressional Republicans called the payments illegal and took the issue to court. While the Trump administration has been approving the payments on a monthly basis, a practice insurance companies say is unstainable especially for setting future premiums. Consensus among Senate HELP members is for Congress to provide a long-term funding solution.
On 1332 waivers, only Alaska and Hawaii have been approved for them, while many states wait for a final answer. States pending waiver approval have called upon the Trump administration and Congress for a more streamlined and flexible process. Chairman Alexander said from his hearings on the 1332 waivers it’s clear they need “to give states more flexibility in the approval of coverage, choices, and prices for health insurance.”
Last week the Senate Finance Committee held a hearing on the Children’s Health Insurance Program (CHIP). While the program is currently authorized until 2019, the program funding will begin to start running out at the end of September. Senators on both side spoke on the importance of the program in their home states, and the impacts on enrolled children if funding was not renewed. Later in the week Senators Hatch and Wyden announced a bipartisan deal had been made to extend the program, provide five years of funding, and phase out the 23 percent funding increase within the program that was passed under the Affordable Care Act. NCSL’s Health and Human Services Committee Co-Chairs also sent a letter supporting the Senate’s bipartisan efforts in dealing with funding before the end of September 2017 as well as multi-year funding.
Between the movement on these issues and now a proposal to re-introduce the Graham-Cassidy health reform bill, the next two weeks in September could prove to be some of the most closely watched votes on the Senate floor.
NCSL Contact: Haley Nicholson
On Tuesday, the Senate voted 81-16 to confirm former Federal Reserve economist and American Enterprise Institute tax expert Kevin Hassett to the Executive Office of the President’s Council of Economic Advisers (CEA). In this role, Hassett will chair the CEA and serve as the White House’s chief economist. As the administration continues to push tax reform, Hassett will likely be able to shape tax policy coming out of the White House. Moreover, Hassett has been a supporter of President Trump’s goal of reaching 3 percent annual GDP growth through changes to existing financial policy, namely tax reform. The CEA contributes to the annual Economic Report of the President and serves as the primary contact between the president and the economic data offices at the Labor and Commerce departments.
NCSL Contact: Ethan Wilson
NCSL is in the process of formulating comments in response to a request for information on how the Federal Communications Commission (FCC) can help enable telehealth services by increasing accessibility of broadband, especially in rural and other underserved areas of the country. A key component of telehealth services is the buildout of broadband networks, which the FCC is interested in receiving state legislators’ reports, data, or policy and financial concerns. NCSL staff will consolidate comments from state legislators who are engaged in broadband deployment and telehealth policy to develop a strong, cohesive, state-centered response to the FCC’s request for information. Based on the feedback NCSL and other stakeholders provide, the FCC expects to identify action items the commission can undertake to promote telehealth and broadband deployment. While the formal comment period is closed, the FCC Public Notice will continue to accept comments, data, and information on a broad range of regulatory, policy, technical and infrastructure issues related to the emerging broadband-enabled health and care ecosystem. To provide information, email Danielle Dean.
NCSL Contact: Danielle Dean
Two weeks after it heard arguments, the South Dakota Supreme Court last week reaffirmed a lower court decision that said that the state cannot require out-of-state retailers to collect and remit the state’s sales tax.
On this day in 1793, President George Washington, along with eight other Freemasons dressed in masonic regalia, laid the first cornerstone of the U.S. Capitol Building.
The litigation came as a result of a South Dakota law enacted in 2016 (SB 106) that required out-of-state retailers that have more than $100,000 of annual in-state sales or 200 or more transactions with customers in the state to remit the state’s sales tax. The court, while sympathetic to the state’s argument, found the law unconstitutional as it directly violates the U.S. Supreme Court’s dormant Commerce Clause precedent in the 1992 decision of Quill Corp. v. North Dakota.
The decision came as no surprise as the clear intent of the state was to ultimately have the Supreme Court of the United States hear the case and overturn the 1992 ruling. If the Supreme Court ultimately overturns the Quill decision (depending on how it is written), every state that has a sales tax could begin requiring out-of-state retailers to collect and remit their state’s sales taxes. The South Dakota litigation remains at the front of the pack of a host of state court cases challenging similar state economic nexus laws across the United States. The expedited review and decision by the South Dakota Supreme Court is significant, as it came early enough for the United States Supreme Court to be able to hear the case in its next term, which begins in October. However, there is by no means a guarantee that the Supreme Court will ultimately decide to hear the case. South Dakota now has 90 days to file a cert petition with the U.S. Supreme Court, which can be extended upon request.
Read the Sept. 11, 2017 Capitol-to-Capitol.
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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.