This Week on the Hill
The House and Senate are in recess, returning the week of November 28.
Lame Duck Session Update
At this time, Congress is scheduled to be in session for three more weeks, with the last day scheduled for Friday, December 16. Several pieces of legislation may be considered during this “lame duck” session, although no firm list has emerged from leadership. Below are some possible bills that could be scheduled for votes:
- Continuing resolution (CR): Congress must pass a bill to fund the government after December 9, when the current CR expires. At this time House Republicans have stated their preference for another CR through March 31, so the new administration can weigh in. However, a clean CR is not expected, as several other funding measures may be attached to the legislation, such as flood relief for several states, supplemental war funding, and funding for Flint, Michigan if a separate water bill does not pass.
- 21st Century Cures: Senate Majority Leader Mitch McConnell (R-KY) has declared this a priority for the lame duck; it would streamline the Food and Drug Administration’s drug approval process and spur medical research directed by the National Institutes of Health. The House passed its version (H.R. 6) in 2015 and the Senate passed a package of bills as a companion. Differences are currently being reconciled between the two chambers.
- Fiscal Year 2017 Defense Authorization: The House and Senate each passed a version (H.R. 4909 and S. 2943) and a vote may come in December.
- Water Resources Development Act: The House and Senate are currently conferencing to reconcile differences on their versions of the bill (H.R. 5303 and S. 2848) which authorizes up to $9 billion for 31 Army Corps of Engineers’ projects. Each version also includes funding to aid in Flint, Michigan’s drinking water recovery, although the bills contain different funding amounts.
- Energy bill: The House and Senate are currently in conference to reconcile differences between their versions of S. 2012, which if passed would represent the first major update to the nation’s energy policy in nearly a decade.
It is also possible that if a continuing resolution is adopted quickly, Congress could adjourn one week early, on December 9, and be done for the remainder of the calendar year.
Preview of the New Presidential Administration and 115th Congress
Since the election, several priorities of the new administration and Congress have been identified. Below are possible issue areas that could see action quickly in the new year:
- Repeal the Affordable Care Act (ACA): A priority of the incoming President and Congress, it is unknown what form a repeal could take and what the timeline for replacement may be; it is also unknown if Medicaid expansion would be included. Congressional Republicans have discussed the use of reconciliation to repeal the ACA, as reconciliation requires just 51 votes in the Senate, compared to 60 votes for bills in regular order. In order to use reconciliation, first a budget resolution that includes reconciliation instructions must be passed by both the House and the Senate. Several members have indicated the repeal process could begin in January, but a replacement plan may be delayed for one or two years.
- Infrastructure: A priority of the President-elect is an infrastructure package to spur transportation projects. This package could include bonds, tax credits to spur private investment or use of an infrastructure bank. Details have yet to be released.
- Tax reform: Congressional Republicans have begun planning for tax reforms in the next session, which may also use the reconciliation process. Although details have yet to be released, changes to the tax code are expected to include lower rates for individuals and corporations.
- Regulation repeal: Several regulations issued by the current administration may be repealed or blocked by the next Congress. An expected vehicle is the Congressional Review Act, which allows new regulations to be overturned through a joint resolution of disapproval. Any regulation issued within 60 days of the new session falls under the purview of the Congressional Review Act, so regulations issued since May could be subject to the process. Congress can also pass separate legislation to overturn a rule or block it from taking effect.
- Medicare overhaul: The Chair of the House Ways and Means Committee has indicated they are working on legislation to reform the Medicare program. Details have yet to be released, but it is expected that the plan will use the Speaker’s “A Better Way” proposal as a foundation for reform.
- Other priorities: Other areas that have been identified include border security/immigration, trade reform and the economy.
NASBO will continue to monitor federal action by both the current administration and incoming administration, with updates provided in the Washington Report.
Decision Imminent on Injunction for Overtime Rule
After a hearing was held last week, a decision on an emergency injunction of the administration’s new overtime rule is expected by Tuesday. Twenty-one state attorneys general and a coalition of business groups filed separate lawsuits against the rule, and the lawsuits were subsequently consolidated into one in a federal district court in Texas. The rule, scheduled to take effect on December 1, will double (to $47,476) the salary threshold under which most workers are guaranteed overtime pay. The lawsuits argue the salary threshold is too high and that the Department of Labor exceeded its authority in indexing it. According to news accounts, if the court rejects the motion for an injunction, the judge will hold a hearing November 28 on whether to grant summary judgement with a decision expected before the rule takes effect. The Congressional Budget Office also recently released a report outlining the economic effects of cancelling the scheduled changes to the overtime regulations, which can be found here.
Labor Releases First Report on Two State Pay for Success Pilot Projects
The Department of Labor recently released the first of two process studies on the department’s “Pay for Success” pilots in two states, New York and Massachusetts. In September 2013, the department awarded grants to these two states to operate pilot projects using the Pay for Success financing model; both projects focus on increasing employment and reducing recidivism among newly released ex-offenders. The report documents the development of the pilot projects, including how outcomes would be measured and budgetary savings determined. Initial findings include the importance of support from state leaders (including the governor’s office), the need for carefully structured contracts, the challenge of implementing rigorous evaluations, and the difficulty of measuring outcomes and potential savings. The full report can be found here.
NOAA Publishes Proposed Rule on State Coastal Management Programs
The National Oceanic and Atmospheric Administration (NOAA) published a proposed rule that would provide states with a more efficient process for making changes to state coastal management programs under the Coastal Zone Management Act. The act was enacted in 1972 to encourage coastal states, Great Lake states, and U.S. territories and commonwealths to be proactive in managing the uses and resources of the coastal zone for their benefit and the benefit of the country as a whole; the act also established the National Coastal Zone Management Program, a voluntary program for states. Of the thirty-five coastal states eligible to participate in the program, thirty-four have federally-approved management programs. Under current regulations, a coastal state may not implement any changes unless that change is approved by the Secretary of Commerce. This proposed rule would provide a more efficient process, remove unnecessary requirements in the current regulations, and establish standard program change documentation for states. Comments on the proposed rule must be submitted by January 9.
Administration Posts Reports on States’ Social Services Block Grant Programs
The U.S. Department of Health and Human Services Office of the Administration for Children and Families recently released focus reports that summarize states’ Social Services Block Grant (SSBG) expenditures for federal fiscal year 2014. The reports cover the following six program areas: adult protective services; child care; child protective services; child welfare services; services for older adults; and special services for individuals with disabilities. Each report includes expenditures for the fiscal year, as well as an analysis of trends for SSBG expenditures in that program area. States have substantial discretion in the use of SSBG funds and may determine what services to provide, who is eligible to receive services, and how funds are used.
Surgeon General Issues Report on Addiction in America
Last week the U.S. Surgeon General released The Surgeon General’s Report on Alcohol, Drugs, and Health, the first ever Surgeon General’s report on this topic. The report states that “alcohol and drug misuse and related disorders are major public health challenges that are taking an enormous toll on individuals, families, and society.” It also estimates that the yearly economic impact of substance misuse and abuse disorders is $249 billion for alcohol misuse and abuse disorders and $193 billion for illicit drug use and drug use disorders. The report includes a chapter on the neurobiology of substance use, misuse and addiction, and emphasizes that “understanding this transformation in the brain is critical to understanding why addiction is a health condition, not a moral failing or character flaw.” Other chapters cover prevention, early intervention and treatment, recovery, health care systems, and a vision for the future. The executive summary can be found here.
CMS Releases Information on Medicaid and CHIP Managed Care Final Rule
The Centers for Medicare & Medicaid Services (CMS) released the first set of frequently asked questions (FAQs) for the Medicaid and CHIP Managed Care Final Rule. The final rule was published in the Federal Register on May 6, 2016, with an effective date of July 5, 2016. This first set of FAQs addresses common questions related to the final rule and includes issues such as the type of information to include in managed care contracts.
Recently Released Reports
Free Community College: An Approach to Increase Adult Student Success in Postsecondary Education, Education Commission of the States
State Strategies to Scale Quality Work-Based Learning, National Governors Association
Highlights from the U.S. PIAAC Survey of Incarcerated Adults: Their Skills, Work Experience, Education and Training, National Center for Education Statistics
Rural America at a Glance: 2016 Edition, U.S. Department of Agriculture
State CIO Top Ten Priorities for 2017, National Association of State Chief Information Officers
The "Sharing" Economy: Issues Facing Platforms, Participants & Regulators, Federal Trade Commission
Economic News
Unemployment Rates Stable in 41 States in October
New data from the Bureau of Labor Statistics shows that most regional and state unemployment rates saw little change in October; 41 states and the District of Columbia had stable unemployment rates, 2 states had higher rates and 7 states had significantly lower rates. Compared to one year earlier, 38 states and the District of Columbia had no significant change, while 5 states had increases and 7 states had notable unemployment rate decreases. The national jobless rate was little changed in October at 4.9 percent, which is little different from October 2015. Nonfarm payroll employment increased in 11 states, decreased in 5 states and was essentially unchanged in 34 states and the District of Columbia. In October, no region had unemployment rates significantly different from the U.S. rate of 4.9 percent. Compared to one month earlier, no region had a statistically significant unemployment rate change. However, significant over-the-year rate decreases occurred in two regions: the South (-0.2 percentage point) and West (-0.3 percentage point).
Initial Jobless Claims Hit 43-Year Low
The Department of Labor released data on Thursday showing that for the week ending November 12, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 19,000 from the previous week’s unrevised total of 254,000. This is the lowest level for initial claims since November 24, 1973 when it was 233,000. The 4-week moving average was 253,500, a decrease of 6,500 from the previous week’s revised average. According to the release, there were no special factors impacting the week’s initial claims and it marked 89 consecutive weeks of initial claims below 300,000, the longest streak since 1970.