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August 29, 2016 - Washington Report

By Leah Wavrunek posted 08-29-2016 04:44 PM

  

This Week on the Hill

The House and Senate are in recess until September 6.

 

Administration Releases Rule Encouraging States to Enroll Workers in Retirement Savings Plans

Last week the Department of Labor released a final rule intended to assist states that create individual retirement accounts or annuities (IRA) programs for private-sector workers who do not have access to workplace savings plans. According to the department, one third of all workers do not have access to retirement savings plans through their employer. To date, eight states have enacted legislation to create retirement savings programs for private-sector workers; however, uncertainty over application of the Employee Retirement Income Security Act’s (ERISA) preemption provision has prevented wider adoption. The final rule announced by the department provides guidance for states in designing programs that reduce the risk of ERISA preemption of the relevant state laws. The final rule will take effect 60 days after publication in the Federal Register. The department also issued a proposed rule that could extend similar provisions to a limited number of cities and other local governments.

 

House Judiciary Chairman Circulates Draft Legislation on Online Sales Tax Collections

House Judiciary Chairman Robert Goodlatte (R-VA) is circulating draft legislation related to sales tax collection for online sales. The proposal would encourage states to join a clearinghouse for collecting online sales taxes; the seller’s home state would collect sales taxes on interstate online transactions based on a single statewide rate set by the buyer’s home state. The seller’s state, also known as the origin state, would be determined based on physical presence and largest number of employees. The draft is currently being circulated for discussion and no timeline for introduction has been released. Other legislation related to online sales tax collection has been introduced previously, including the Marketplace Fairness Act (S. 698) by Senator Mike Enzi (R-WY) and the Remote Transactions Parity Act (H.R. 2775) by Representative Jason Chaffetz (R-UT).

 

CBO Updates Deficit Projections

On August 23 the Congressional Budget Office (CBO) released a report updating the budget and economic outlook for 2016 to 2026. The report estimates a larger deficit for fiscal 2016 compared to its estimate in March; CBO now estimates that the deficit for the current fiscal year will total $590 billion, or 3.2 percent of Gross Domestic Product (GDP). This would exceed last year’s deficit by $152 billion. The deficit is projected to grow in fiscal 2016 because revenues are up less than one percent, while outlays are projected to rise by five percent. While CBO estimates a larger deficit for fiscal 2016, the new report projects a smaller deficit for the 2017-2026 period; the cumulative deficit is projected to be $0.7 trillion smaller than the $9.3 trillion in previous estimates. This can be partly attributed to projected lower interest rates, and lower outlays for interest payments on federal debt.

 

FDA Announced All Blood Donations Should Receive Zika Screening

Last week the Food and Drug Administration (FDA) issued a revised guidance recommending that all donated blood in the United States should be screened for the Zika virus. The FDA previously issued guidance on February 16 that recommended only areas with active Zika virus transmissions should screen donated blood; all areas with active transmission in the U.S. are currently compliant with this guidance. The release notes that testing of donated blood is already underway in Florida and Puerto Rico and it has been shown to be beneficial in identifying donations infected with Zika virus. The guidance recommends that screening should begin immediately in states and territories with one or more reported locally acquired case of the Zika virus; no later than four weeks for eleven states identified by FDA (Alabama, Arizona, California, Georgia, Hawaii, Louisiana, Mississippi, New Mexico, New York, South Carolina and Texas); and no later than 12 weeks for remaining states and territories.

 

DOT Proposes New Rule to Limit Speeds for Large Vehicles

The National Highway Traffic Safety Administration and Federal Motor Carrier Safety Administration released a proposed rule last week that would equip heavy-duty vehicles with devices that limit their speeds on U.S. roads. The rule would establish safety standards requiring all newly manufactured U.S. trucks, buses, and multipurpose passenger vehicles with a gross vehicle weight rating more than 26,000 pounds to come equipped with speed limiting devices; a complementary rule would require each commercial motor vehicle with a gross vehicle weight rating of more than 26,000 pounds to be equipped with a speed limiting device. Maximum speeds of 60, 65 and 68 miles per hour are all discussed in the proposed rule. The release estimates that requiring speed limiting devices could save an estimated $1.1 billion in fuel costs, while also saving lives. Comments may be submitted for up to 60 days after publication of the proposed rule in the Federal Register. 

 

Recently Released Reports

Community Colleges: Multiple Missions, Diverse Student Bodies, and a Range of Policy Solutions, Urban Institute 

Characteristics and Financial Circumstances of TANF Recipients, Fiscal Year 2015, Administration for Children and Families, Office of Family Assistance 

Trends in Family Wealth, 1989 to 2013, Congressional Budget Office 

Flood Insurance: Review of FEMA Study and Report on Community-Based Options, U.S. Government Accountability Office 

Education Savings Accounts: Key Provisions and State Variations, Education Commission of the States 

 

Economic News

Unemployment Rates Stable in 40 States in July

New data from the Bureau of Labor Statistics shows that most regional and state unemployment rates saw little change in July; 40 states and the District of Columbia had stable unemployment rates, 7 states had significantly higher rates and 3 states had lower rates. Compared to one year earlier, 37 states had no notable net change, while 3 states had increases and 10 states and the District of Columbia had notable unemployment rate decreases. The national jobless rate was unchanged from June at 4.9 percent, which is 0.4 percentage point lower than in July 2015. Nonfarm payroll employment increased in 15 states in July, decreased in 1 state and was essentially unchanged in 34 states and the District of Columbia. In July, two regions had unemployment rates significantly different from the U.S. rate of 4.9 percent; the Midwest at 4.5 percent and the West at 5.3 percent. Compared to one month earlier, only the Midwest had a statistically significant unemployment rate change (-0.2 percentage point). However, significant over-the-year rate decreases occurred in three regions: the South (-0.5 percentage point), West (-0.4 percentage point each) and Northeast (-0.3 point).

 

GDP Increase for the Second Quarter of 2016 Decreases Slightly on Second Estimate

The U.S. Department of Commerce Bureau of Economic Analysis released the “second” estimate for real gross domestic product (GDP) in the second quarter of 2016, showing that GDP increased at an annual rate of 1.1 percent. The second estimate is based on more complete source data than were available for the “advance” estimate issued in July, which showed an increase of real GDP of 1.2 percent. According to the release, the downward revision to the percent change in real GDP primarily reflected downward revisions to state and local government spending and to private inventory investment and an upward revision to imports (which are a subtraction in the calculation of GDP); these were partly offset by upward revisions to nonresidential fixed investment and personal consumption expenditures.