Capitol to Capitol is NCSL's state-federal newsletter.
Last night, President Donald Trump tweeted “Big week coming up!,” a statement that could easily be applied to every week in September inside the Beltway. Congress returns to Washington today with a daunting “must-do” list for the month that includes passing a budget to stave off a government shutdown; raising the debt limit to avoid a government default; and reauthorizing the Federal Aviation Administration (FAA) and the National Flood Insurance Plan (NFIP), and funding for the Children’s Health Insurance Plan (CHIP).
DYK? The Wisconsin State Capitol, which is the third capitol building in Madison, turned 100 this year. While the building was completed in 1917, due to World War I, its dedication was delayed for 48 years until 1965. For more information about the events scheduled this year to celebrate the Capitol Centennial, click here.
-Courtesy of NCSL Vice President, Speaker Robin Vos (Wis.)
On top of that, today the administration announced its plans to terminate the Deferred Action for Childhood Arrivals (DACA) program unless congress acts within 6 months. Also this week, the House on Wednesday is expected to take the first of what could be several votes to provide financial assistance to victims of Hurricane Harvey. At the same time, the White House and GOP leaders on Capitol Hill are still pushing to overhaul the tax code before the end of the year. Needless to say, summer has come and passed and it will be a bumpy ride until September ends.
NCSL Contacts: Max Behlke, Jake Lestock
If Congress fails to pass a funding bill by the end of the fiscal year on Sept. 30, the federal government will shut down. Although the House has already passed four of the 12 spending bills and plans to pass the remaining eight bills in the coming weeks, GOP leaders do not expect the Senate to have enough floor time to consider them, which signals that Congress will look to pass a short term continuing resolution, likely through the end of the calendar year.
Before Congress left town for the August recess, a government shutdown seemed more likely as the president demanded that funds for a border wall be included in any spending package. After Hurricane Harvey devastated Houston and the Gulf Coast, however, there is added pressure on the White House and GOP lawmakers to pass a financial aid package for the region, keep the government open and delay the fight for border wall funding until the next funding battle.
On Sept. 24, Germans will head to the polls for their quadrennial elections to cast votes for their country’s legislative body, known as the Bundestag. On election day, Germans cast two votes: one for a candidate and one for a political party. The party vote exists to guarantee that the Bundestag reflects the party preferences of the overall electorate, but that also means that the number of members of the legislature may change after each election to ensure party proportionality. For more about the Bundestag and the upcoming election, visit this article from FiveThirtyEight.com.
Hurricane Harvey: Last week, during a GOP leadership call organized by House Majority Leader Kevin McCarthy (R-Calif.) to get lawmakers on the same page regarding Hurricane Harvey aid, it was mentioned that the price tag for the storm might exceed the cost of Hurricane Katrina, which cost an estimated $160 billion in economic damage and cost the federal government roughly $114.5 billion in recovery efforts. On Friday, the White House requested an initial $7.85 billion in emergency relief funding from Congress and then requested another $6.7 billion as the administration looks to respond to the aftermath of the hurricane.
Debt Limit: Treasury Secretary Steven Mnuchin has said the absolute last day to raise the debt ceiling is Sept. 29, after which the federal government would default on its spending obligations. In recent years, raising the debt ceiling has become difficult, especially among fiscal conservatives who argue that spending cuts should be included in any package that raises the federal government’s borrowing limit. It is unlikely, however, their demands will be met, which means that Republican leaders will need to accommodate the demands of Democrats and moderate Republicans to pass a bill to raise the limit, and/or include the debt ceiling measure in a comprehensive legislative package, including the financial aid package for Hurricane Harvey.
At the moment, it appears that GOP leaders will look to marry a government funding bill, Harvey aid and the debt ceiling into a single measure. Doing so would provide political cover for members of Congress to vote for the package even if they oppose certain provisions, such as raising the debt ceiling. The size, scope, and duration of a comprehensive bill, however, has not yet been discussed publicly, and as they say, the devil is in the details.
Early this morning, Trump warned Congress in a tweet to “get ready to do your job – DACA” as his administration prepares to end the program. DACA was initiated in 2012 by the Obama administration for so-called Dreamers, undocumented immigrants that were brought to the U.S. as children. The program allows undocumented children who meet several guidelines to request consideration of deferred action for a period of two years, subject to renewal; allowed them to be eligible for work authorization; and also protected them from deportation. Roughly 800,000 immigrants have benefited from the program.
The president’s tweet signals that he expects Congress to find a solution, especially as Attorney General Jeff Sessions announced this morning at a press conference that the administration will delay shuttering the program for six months. The attorney general, who was a vehement opponent of DACA as a senator, has argued that it is the responsibility of Congress, not the president, to write immigration laws. However, the program has proven to be popular with the public and with a faction of congressional Republicans, which means passing any DACA-related legislation in Congress will prove to be contentious.
NCSL Contact: Susan Frederick
Damage from widespread flooding caused by Hurricane Harvey has been a sobering reminder for lawmakers that the National Flood Insurance Program (NFIP) is both in need of reauthorization, and deeply in debt. More specifically, $24.6 billion in debt. Intensifying debate among members of Congress includes the financial solvency of the program, its efficacy for residential and commercial properties, and the costs of its associated policies.
Nevada is the only state in which a voter can choose "None of the Above" as his or her choice in an election for statewide office.
-Courtesy of Mike Morton, Senior Deputy Legislative Counsel, Nevada Legislature
Members of Congress from coastal states have been pushing bipartisan reauthorization efforts. Senator John Kennedy (R-La.) has been a vocal supporter of the NFIP, recently saying, “We're going to extend it. We're going to take some measures to stabilize the program. But we're not going to do it on the backs of the policyholders.” Kennedy also recently drafted a six-year reauthorization bill with Senator Robert Menendez (D-N.J.). He said that the bill "tries to strike a balance between stability in the program yet still making it actually available to the people who need it.”
House members have also been vocal on the subject. “The end package must ensure that we uphold the promise we’ve made to homeowners” Houston-area Republican, Representative Pete Olson, said about NFIP reforms. Providing impetus for the reauthorization, Representative Cedric Richmond (D-La.) said that “floodwater has a way of making it pretty clear what the priorities are."
But if lawmakers can agree on the program’s importance, the opposite is true for potential reforms. The problem of the program’s long-term solvency does not have a clear solution. After years of running balance sheets in the red, lawmakers are now faced with trying to increase the program’s financial footing while maintaining effective and affordable policies – conflicting goals that will be hotly debated as Congress reconvenes this month. A major source of tension among lawmakers is to what extent policyholders should pay higher premiums. Even before the vast destruction caused by Hurricane Harvey this past week, 26 Republicans from states including New York, Texas, Mississippi and Florida bucked proposals by the House Financial Services Committee, alleging that the proposed changes would make flood insurance unaffordable for those who need it most.
Despite increased calls for full reauthorization, many around the Hill feel that a short-term reauthorization is most likely at this point. If lawmakers cannot agree on significant reforms by the end of September, a stopgap measure in the form of a short-term extension will be needed to keep the status quo.
NCSL Contact: Ethan Wilson
In an effort to start a final push to get legislation to the White House by the end of this year, Trump will meet with the “Big Six tax” reform negotiators this evening to lay out a blueprint for the next months. While no big breakthroughs are expected to come out of today’s meeting, some administration officials and congressional leaders have raised expectations that more details on tax reform framework could be released in the near future. While few details are currently known about the plan, the major issues to settle are how low to push tax rates for corporations, whether and how to pay for most of the package, and how hard it will be to comply with Senate budget rules.
Agreement on a plan to cut taxes for individuals and businesses, along with more fundamental changes to the tax code, would allow the House Ways and Means and Senate Finance committees to start putting meat on the bone with legislative language. Meanwhile, the president will begin a tour of the Midwest this week to try to drum up public support for the necessity of tax reform. With the challenges of funding the government, raising the debt limit, reauthorizing funding a number of key programs, responding to Hurricane Harvey, and the House only scheduled to be in session for 48 more days this year, GOP efforts to completely restructure one of the most complicated tax systems in the world by the end of the year would be a herculean accomplishment.
The House is expected to vote on H.R. 3388, the SELF Drive Act, on Wednesday after it passed the House Energy and Commerce Committee just before the August recess. NCSL, along with a host of other state groups, issued a letter outlining concerns with the legislation. While the committee did make a number of changes called for by NCSL, there remains a significant expansion of federal pre-emption on states included in the bill. Historically, the federal government has regulated motor vehicle safety while states and localities have regulated motor vehicle operations. The SELF Drive Act would expand sole federal regulatory authority to encompass vehicle operations of highly automated vehicles.
NCSL Contacts: Ben Husch, Kristen Hildreth
The Department of Housing and Urban Development (HUD) is implementing changes to the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) Program. The mortgages, otherwise known as reverse mortgages, are financial tools for homeowners aged 62 and older designed to allow access to equity tied up in residential real property. After nearly 10 years of volatility, HUD is making changes designed to protect current FHA mortgage holders and shore up the financial stability of its HECM program. According to HUD’s HECM Fact Sheet, FHA insured reverse mortgages have resulted in a net cost of $11.7 billion to the FHA Mutual Mortgage Insurance fund since 2009.
Major changes include adjusting Mortgage Insurance Premiums (MIPs) and lowering Principal Limit Factors (PLFs). MIP adjustments mean that new reverse mortgage borrowers will pay lower annual premiums, partially offset by higher upfront premiums. According to HUD, “The new upfront premiums recognize that all borrowers taking out a HECM, regardless of how much they draw upfront, represent potential risk and should contribute to the fiscal health of new business.”
Lower PLFs mean that new reverse mortgage borrowers will be subject to lower borrowing limits. Decreasing borrowed amounts reflects a move by HUD designed to shore up the program’s financial stability by lowering total liabilities. HUD states that the “New PLFs will preserve the homeowners’ equity in the home if they continue to occupy the house for the expected life of the loan.”
Changes to HUD’s HECM program apply to reverse mortgages originating in FY 2018 and will not affect current reverse mortgage borrowers.
NCSL, along with the National Governors Association (NGA) and American Association of State Highway and Transportation Officials (AASHTO), issued a letter of support for an amendment from Representative Rob Woodall (R-Ga.) concerning an $800 million-dollar rescission to federal transportation funds for states in the House’s FY 2018 appropriations bill. While the amendment does not undo the rescission, it does provide significant flexibility to states to spread out the reductions in federal funding as compared to the limits included in the original language.
After spending months on a plan to repeal and replace the Affordable Care Act (ACA) that failed in July, Republican lawmakers have received another impending deadline. Last week, the Senate parliamentarian ruled that lawmakers face a Sept. 30 deadline to repeal the law with only 50 votes. This ruling is likely to diminish already scarce prospects that the GOP will pick up their fight to repeal the ACA in the near future. It is also important to note that the House GOP’s budget resolution for fiscal year 2018 does not include any instructions on health care, which would likely kill their chances of an ACA repeal redo next year. At the same time, the Senate Health, Education, Labor, and Pensions (HELP) committee is trying to craft a bill to stabilize the ACA’s insurance marketplaces in the short term.
This week, the Senate committee will hold the first of four planned hearings this month on legislation that aims to keep down premiums and boost insurer competition in the marketplaces. The hearings will feature testimony from Republican and Democratic governors, state insurance regulators, and individuals representing different parts of the health care sector. This will be the first major test to see whether the Republicans can now work with Democrats to pass a bipartisan stabilization bill by the end of September. Meanwhile, lawmakers also have just weeks to extend funding for a program covering about 8 million kids. The Children’s Health Insurance Program (CHIP) is set to run out of money on Sept. 30 without additional federal funding. These issues, along with other must-pass legislation including bills raising the debt limit and funding the federal government, and the recent pivot of GOP leaders to tax reform could signal a pause for any significant changes to the ACA in the near future.
NCSL Contact: Haley Nicholson
Interior Secretary Ryan Zinke announced on Sept. 1 new members to the Department’s Royalty Policy Committee, which included a number state legislators and state legislative staff that were submitted by NCSL, including Representative Drew Darby (R-Texas), Representative Dan Saddler (R-Alaska), Representative Hans Hunt (R-Wyo.) and Mark Edwards the of the New Mexico Legislature’s Legislative Council Service. The committee will serve a critical role in advising Zinke on policy and strategies to improve management of the multi-billion dollar federal and American Indian mineral revenue program. The committee’s first meeting will be held on Wednesday, Oct. 4.
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!
Read the Aug. 28, 2017, Capitol-to-Capitol.
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.