This Week on the Hill
The House and Senate return today after a seven-week recess. The most pressing priority facing Congress is funding the government after September 30. With 17 scheduled legislative days until that deadline, a continuing resolution is expected. However, various factions within Congress prefer resolutions of differing lengths; some want an omnibus completed before the end of the calendar year, while others prefer a six-month resolution to avoid a spending agreement crafted during the lame duck session.
The House returns today and will consider 13 bills under suspension of the rules, including the Survivors’ Bill of Rights Act (H.R. 5578) which establishes certain rights for the survivors of sexual assault with regard to medical forensic examinations and evidence gathered. On Wednesday the House will consider H.R. 5063, the Stop Settlement Slush Funds Act, in addition to five bills under suspension of the rules. For Thursday and the balance of the week, the House will consider two financial bills: H.R. 2357, which relates to securities sales; and H.R. 5424, which reduces reporting and other requirements placed on private equity funds by the 2010 Dodd-Frank Act. In committee action, the Budget Committee will hold a hearing Wednesday on the Center for Medicare and Medicaid Innovation, and the Homeland Security Committee will hold a hearing Thursday on state and local perspectives on federal information sharing.
The Senate returns today and will consider procedural measures related to Zika (H.R. 2577), Defense (H.R. 5293) and Military Construction-Veterans Affairs spending bills. There are several bills currently on the legislative calendar that could be called up at any time, including the water resources bill (S. 2848), a surveillance bill (S. 1357), or a bill on immigration executive actions (S. 534). In committee action, the Special Committee on Aging will hold a hearing Wednesday on increasing retirement savings.
Education Department Proposes ESSA Funding Rules; Met with Much Opposition
On August 31, the U.S. Department of Education (ED) released proposed regulations to clarify the statutory requirement under Title I of the Every Student Succeeds Act (ESSA) that federal funds supplement, not supplant, state and local funds.
Background on Supplement-not-Supplant under ESEA and ESSA
The supplement-not-supplant (SNS) provisions have been part of the Elementary and Secondary Education Act since 1970, designed to ensure that federal aid is used to provide additional resources for disadvantaged students, rather than as a substitute for state and local K-12 funding. ESSA revised the SNS provisions applicable to Title I to specify that local educational agencies (LEAs) are no longer required to identify that individual costs or services paid for with Title I funds are supplemental. Instead, ESSA requires an LEA to demonstrate that its methodology for allocating state and local funds to Title I schools ensures that these schools receive all the state and local funds they would have received without Title I funding. However, the law does not establish a standard for how to demonstrate this, and further says that the law is not to be “construed to mandate equalized spending per pupil for a State, local educational agency, or school.”
Summary of Proposed Rule
ED’s proposed regulations to implement the SNS provisions under ESSA identify four options for LEAs to demonstrate compliance, including: 1) distributing funds to schools within the district by using a weighted formula based on the characteristics of students in each school that provides additional resources for disadvantaged students; 2) distributing funds to schools within the district based on a districtwide formula for allocating personnel and non-personnel resources, ensuring that the total amount for each Title I school is at least equal to the sum of the number of personnel in that school multiplied by the district’s average salaries and the number of students in the school multiplied by the district’s average per-pupil non-personnel expenses; 3) another funds-based compliance test established by the state educational agency (SEA) approved through a federal peer review process; or 4) a “special rule” whereby the district ensures that per-pupil funding in each Title I school is no more than 5 percent below the average amount it spends in non-Title I schools.
Opposition and Criticism of the Rule
A Congressional Research Service report found that ED’s previous, even more stringent draft SNS regulations – which would have required LEAs to demonstrate that they spend the same amount of state and local funds on Title I and non-Title I schools within their district – appeared to overstep its statutory authority. While the proposed rule released last week provides LEAs with additional options to comply, it is still viewed by a wide range of stakeholders as far too strict and burdensome. Various organizations, including the National Governors Association, Council of Chief State School Officers, and School Superintendents Association, issued statements opposing the rule as an unfunded mandate on state and local governments, overly prescriptive, and unlikely to achieve its intended purpose. The proposed rule was published today in the Federal Register, and ED will accept comments on the regulations through November 7.
FHA Awards $14.2 Million to Seven States for Alternative Revenue Pilots
Last week the U.S. Department of Transportation Federal Highway Administration (FHA) announced $14.2 million in grants for states to explore alternative revenue mechanisms to help sustain the long-term solvency of the Highway Trust Fund. The Surface Transportation System Funding Alternatives (STSFA) grant program will fund projects to test the design, implementation and acceptance of user-based alternative revenue mechanisms. The eights projects in seven states will pilot a variety of options to raise revenue, including charging drivers based on miles traveled and multi-state or regional approaches to road user charges. The seven states receiving grants are California, Delaware, Hawaii, Minnesota, Missouri, Oregon and Washington.
Administration Announces LIHEAP Guidance on Zika, New Local Awards
The Office of Community Services sent a Dear Colleague letter on August 25 that seeks to clarify information, outreach and allowable uses for Low Income Home Energy Assistance Programs (LIHEAP) in Zika prevention, while highlighting activities LIHEAP grantees may take to prevent exposure to the Zika virus. The letter highlights flexibilities in program design that may concurrently mitigate exposure to Zika through program uses such as weatherization, crisis assistance, and information and mitigation. The office also encourages states, territories and tribes to consider needs related to Zika exposure and how LIHEAP activities may help prevent and reduce exposure. Also, last week the Centers for Disease Control and Prevention (CDC) awarded $2.4 million to Chicago, Houston, New York City, Philadelphia, and Los Angeles County to establish, enhance and maintain information systems to rapidly detect microcephaly and other adverse outcomes linked to Zika virus infection.
EPA Inspector General to Examine Oversight of State Drinking Water Programs
The Office of Inspector General (OIG) for the U.S. Environmental Protection Agency (EPA) announced last week that the office plans to begin preliminary research to evaluate EPA’s oversight of state drinking water monitoring. According to the release, the OIG’s objectives are to “evaluate how the EPA ensures that Safe Drinking Water Act primacy states monitor and report drinking water sampling results from public water systems, and to determine whether the EPA can improve its oversight of state drinking water sampling programs.” The work will start at EPA headquarters, but will expand to include selected regions and states. Additional information on Safe Drinking Water Act compliance monitoring can be found here.
Administration Solicits Applications for Performance Partnership Pilots for Disconnected Youth
The third round of Performance Partnership Pilots for Disconnected Youth (P3) was recently announced for fiscal year 2016. The pilots were first authorized by Congress for fiscal year 2014, to enable pilot sites to test innovative, outcome-focused strategies to achieve significant improvements in educational, employment, and other key outcomes for disconnected youth using new flexibility to blend existing federal funds and to seek waivers of program requirements. The P3 initiative allows pilots (through state, local or tribal governments) to receive customized flexibility from participating federal agencies to overcome barriers and align program and reporting requirements across programs, to enable communities to pursue innovative and effective ways to improve outcomes for disconnected youth. Additional information on the pilots can be found here and frequently asked questions about the third round of pilots can be found here. The (optional) deadline for the notice of intent to apply is September 29, and applications are due October 31.
CMS Issues Proposed Regulations for ACA Marketplaces
Last Monday the administration announced new regulations intended to strengthen marketplaces under the Affordable Care Act (ACA) as the Centers for Medicare and Medicaid Services (CMS) issued the proposed annual Notice of Benefit and Payment Parameters for 2018. Beginning in 2017, the proposed policies will take steps to strengthen the risk adjustment program: first, beginning in 2017, updates to better reflect the risk associated with enrollees who are not enrolled for a full 12 months; second, beginning in 2018, using prescription drug utilization data to improve the predictive ability of the risk adjustment models; and third, also beginning in 2018, establishing transfers that will help to better spread the risk of high-cost enrollees to improve the risk-sharing benefits of the program. Beyond changes to the risk adjustment program, the proposed policies would give consumers additional tools for assessing networks for competing plans, broaden availability of new standardized plan options by accommodating state cost-sharing rules, create multiple child age bands that address the large premium changes after turning age 21, and codify several special enrollment periods already available to consumers. The proposed rule can be found here. Comments must be received no later than October 6.
HHS Awards Funds to Address Opioid Epidemic, FDA Announces Labeling Changes
The U.S. Department of Health and Human Services announced $53 million in funding from the Center for Disease Control (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA) for six opioid-related programs. The funding will go to 44 states, four tribes and the District of Columbia to increase access to opioid use disorder treatments, reduce opioid related deaths and improve drug misuse prevention efforts. Funding will also support the tracking of fatal and non-fatal opioid overdoses, as well as improved data collection and analysis of opioid misuse. Also, last week the Food and Drug Administration (FDA) announced that it is requiring boxed warnings – the FDA’s strongest warning – and patient-focused Medication Guides for prescription opioid analgesics, opioid-containing cough products, and benzodiazepines with information about the serious risk associated with using these medications at the same time. Risks include extreme sleepiness, respiratory depression, coma and death.
Recently Released Reports
2015 Motor Vehicle Crashes: Overview, U.S. Department of Transportation
Medicaid and CHIP: June 2016 Monthly Applications, Eligibility Determinations and Enrollment Report, Centers for Medicaid & CHIP Services
Local Justice Reinvestment: Strategies, Outcomes and Keys to Success, Urban Institute
Can We Increase Retirement Saving?, Center for Retirement Research at Boston College
Economic News
Economy Adds 151,000 Jobs in August
New data released last week by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 151,000 in August and the unemployment rate was unchanged at 4.9 percent. Over the past three months, job growth has averaged about 232,000 a month. The data also shows that in August there were 7.8 million unemployed persons, essentially unchanged from July. The number of long-term unemployed (jobless for 27 weeks or more) was unchanged at 2.0 million, accounting for 26.1 percent of the total unemployed. The labor force participation rate was unchanged at 62.8 percent. In August, job gains occurred in food services and drinking places (34,000), social assistance (22,000), professional and technical services (20,000) and financial activities (15,000). Mining jobs continued to decrease in August, down 4,000, while employment saw little change for construction, wholesale trade, retail trade, government and manufacturing. The average hourly earnings for all employees increased by 3 cents to $25.73 in August, following an increase of 8 cents in July. Over the year average hourly earnings have risen by 2.4 percent.