July 23, 2012

THE WEEK AHEAD

Legislative Focus:  Regulatory Reform, Tax Bills, Oil and Natural Gas Leases

The House is set to work on regulatory reform legislation and numerous measures under suspension of the rules during the July 23 week, while the Senate plans to take up two competing tax measures.

The Senate convened at 2:00 p.m. today with roll call votes expected on a judicial nomination.

The Senate is scheduled to start the week with the consideration of Michael A. Shipp to be a U.S. district judge for the New Jersey. Following the judicial nomination vote, the Senate plans to begin work on two pieces of tax cut legislation. One bill (S. 3412) is has been offered by President Obama and Democrats to extend tax cuts for middle class households making less than $250,000 per year. The proposal, introduced by Senate Majority Leader Harry Reid (D-NV) on July 19, does not address estate taxes, which means the estate tax rate would increase by to a maximum of 55 percent for 2013. A competing measure (S. 3413) introduced by Senate Minority Leader Mitch McConnell (R-KY) and Senate Finance ranking member Orrin Hatch (R-Utah) would extend all of the Bush-era tax cuts, including the current estate tax levels.

The House convened at 2:00 p.m. today for legislative business and to take up 19 measures under suspension of the rules, beginning at 6:30 p.m. Tuesday, and for the remainder of the week, the House is scheduled to consider three bills under suspension of the rules and two measures subject to a rule.

The House is set to consider a bill (H.R. 6082) to replace President Obama’s 2012-2017 oil and natural gas lease sale plan. The measure, which was approved by the House Natural Resources Committee July 18 on a vote of 24-17, would authorize 29 oil and gas offshore lease sales over the next five years, 14 of which would be consolidated into a single “multisale” environmental impact statement. The remaining 15 comprise the whole of President Obama’s lease sale plan from 2012 to 2017. 

The House is also expected to take up a legislative package which includes seven bills that would either halt current regulations or revamp the regulatory process (H.R. 4078). The Red Tape Reduction and Small Business Job Creation Act would create a moratorium targeting all pending rules that could significantly affect the economy, including a “midnight rule” proposal that would bar President Obama and future presidents from proposing or finalizing economically significant rules in the final months of their terms of office. That proposed moratorium would end only if the unemployment rate falls to 6 percent or lower. The package also targets regulations issued by the Securities and Exchange Commission, including one rule to require that the benefits of any Commodity Futures Trading Commission rules outweigh costs, and another to streamline environmental permitting. The House Rules Committee is scheduled to meet today to consider rules for floor debate of the lease bill and the regulatory process legislation. 

The House also plans to consider 19 pieces of legislation under suspension of the rules, including several postal building and courthouse naming bills. Additional measures under consideration include a bill (H.R. 459) sponsored by Rep. Ron Paul (R-TX) that would require the Government Accountability Office to audit the Federal Reserve’s board of governors and the dozen reserve banks; a bill (H.R. 4157) regarding the use of child labor of family farms; and legislation (H.R. 5986) to make changes to the African Growth and Opportunity Act.


KEY HEARINGS & MARKUPS

Appropriations:  The Labor, Health and Human Services, Education, and Related Agencies Subcommittee of the Senate Appropriations Committee will hold a hearing on the impact of sequestration on education. 
Wednesday, July 25, 10:00 a.m., 124 Dirksen Building.

Commerce, Science and Transportation:  The Senate Commerce, Science and Transportation Committee will hold a hearing on the Cable Act at 20. 
Tuesday, July 24, 2:30 p.m., 253 Russell Building.

Education and Workforce:  The Early Childhood, Elementary and Secondary Education Subcommittee of the House Education and the Workforce Committee will hold a hearing on alternative teacher certification programs. 
Tuesday, July 24 at 10:00 a.m., 2175 Rayburn Building.

The Health, Employment, Labor, and Pensions Subcommittee of the House Education and the Workforce Committee will hold a hearing on the national labor relations act overhaul. 
Wednesday, July 25, at 10:00 a.m., 2142 Rayburn Building.

Environment and Public Works:  The Senate Environment and Public Works Committee will hold a hearing on EPA efforts to control toxic chemicals. 
Tuesday, July 24, 10:00 a.m., 406 Dirksen Building.

Finance:  The Senate Finance Committee will hold a hearing on education tax incentives. 
Wednesday, July 25 at 10:00 a.m., 215 Dirksen Building.

Foreign Relations:  The Senate Foreign Relations Committee will hold a hearing on job growth through exports. 
Wednesday, July 25 at 3:00 p.m., 419 Dirksen Building.

Health, Education, Labor and Pensions:  The Children and Families Subcommittee of the Senate Health, Education, Labor and Pensions Committee will hold a hearing on child care and development block grant reauthorization. 
Thursday, July 26 at 10:00 a.m., 430 Dirksen Building.

Housing and Urban Affairs:  The Financial Institutions and Consumer Protections Subcommittee of the Senate Banking, Housing and Urban Affairs Committee will hold a hearing on private student loans. 
Tuesday, July 24 at 2:30 p.m., 538 Dirksen Building.

Judiciary:  The House Judiciary Committee will hold a hearing on the taxation of Internet sales. 
Tuesday, July 24 at 10:00 a.m., 2141 Rayburn Building. **Tennessee Governor Bill Haslam will testify on behalf of NGA

Natural Resources:  The House Natural Resources Committee will hold a hearing on the impact of forest fires. 
Tuesday, July 24 at 10:00 a.m., 1324 Longworth Building.

The Senate Energy and Natural Resources Committee will hold a hearing on the use of natural gas as a transportation fuel. 
Tuesday, July 24 at 10:00 a.m., 366 Dirksen Building.

The Water and Power Subcommittee of the Senate Energy and Natural Resources Committee will hold a hearing on water use efficiency and energy use. 
Wednesday, July 25 at 2:30 p.m., 366 Dirksen Building.

Transportation and Infrastructure:  The Economic Development, Public Buildings and Emergency Management Subcommittee of the House Transportation and Infrastructure Committee will hold a hearing on minimizing the cost of disasters. 
Tuesday, July 24 at 10:00 a.m., 2167 Rayburn Building.

Veterans Affairs:  The House Veterans Affairs Committee and House Armed Services Committee will hold a join hearing on assistance for service members returning to civilian life. 
Wednesday, July 25 at 10:00 a.m., 2118 Rayburn Building.

Ways and Means:  The Health Subcommittee of the House Ways and Means Committee will hold a hearing on Medicare physician payment overhaul. 
Tuesday, July 24 at 10:00 a.m., 1100 Longworth Building.


REVISED CYBERSECURITY BILL INTRODUCED IN THE HOUSE

Senators Joe Lieberman (I-CT) and Susan Collins (R- ME), Chairman and Ranking Member of the Homeland Security and Governmental Affairs Committee, introduced revised cybersecurity legislation last week. 

This legislation is intended to address concerns regarding the earlier version’s requirement that companies operating critical infrastructure such as power plants, communications networks and financial systems adhere to security standards. Instead, the revised version of the bill allows companies to participate in a voluntary cybersecurity program through which they could self-certify or use a third-party assessment to demonstrate that they are compliant with a set of security practices. 

The bill would also establish a National Cybersecurity Council to conduct risk assessments to determine which critical infrastructure sectors are most at risk and identify categories of infrastructure as critical cyber infrastructure. Senator Reid (D-Nev.) has indicated that this legislation will be considered by the Senate this week. A summary of the legislation may be found here.



HOUSE CLEARS DEFENSE APPROPRIATIONS BILL
 
The House  passed H.R. 5856, the Department of Defense (DoD) Appropriations Act for Fiscal Year 2013, yesterday by a vote of 326-90. The bill would preserve aircraft and manpower for the Air National Guard at current levels. 

Of special interest, the committee report urges DoD to examine force structure alternatives and to refrain from taking any actions, including the reduction of any Air National Guard or Air Force Reserve units, in the current fiscal year or FY 2013 that would pre-empt final decisions on such matters by Congress. The committee report also rejects the Air Force’s proposal to terminate the C-27J program and instead directs DoD to use existing FY 2011 and FY 2012 funds to procure up to 17 additional aircraft. The bill would provide $115 million in unrequested funds to sustain these aircraft.



MUNICIPAL FINANCE REPORTS RELEASED

Several reports were released this week concerning state and local finance and municipal securities. The Government Accountability Office (GAO) released a report last week that examines the effectiveness of regulations governing information currently provided to investors on municipal securities. Municipal securities are currently exempt from certain federal disclosure requirements, but this report makes several suggestions to increase federal oversight and disclosure requirements. This report comes in the wake of the State Budget Crisis Task Force and Joint Committee on Taxation reports released earlier in the week. The report issued by the State Budget Crisis Task Force, assembled by Richard Ravitch and Paul Volcker to examine threats to fiscal sustainability in the states, focused on state spending and taxation, concluding that the problems are structural, rather than cyclical, and the current trajectory cannot be sustained. The Joint Committee on Taxation report focused more narrowly on municipal finance issues, including the efficiency of direct-pay bonds and tax-exempt bonds and their effects on federal revenue. The Securities and Exchange Commission is also preparing to issue a report proposing legislative and regulatory changes aimed at increasing disclosure and price transparency in the municipal bond market. These reports will likely influence the discussions surrounding municipal finance in the broader conversation on tax reform.



SIX MORE STATES, WASHINGTON DC, RECEIVE NCLB WAIVERS; NEVADA’S APPLICATION OUTSTANDING
 
The U.S. Department of Education announced yesterday that six additional states (Arizona, Kansas, Michigan, Mississippi, Oregon, and South Carolina), as well as the District of Columbia, have received waivers from certain provisions of the No Child Left Behind Act. That brings the total of approved applications to 33. 

A handful of states’ applications are still outstanding, including Idaho, Illinois and Nevada. Vermont withdrew their application and Iowa’s request was rejected. Additional states are expected to apply for the third round of waivers on September 6, 2012.

In 2011 almost half of America’s public schools failed targets set by No Child Left Behind, the highest ever, and that figure was over 90% in Washington D.C. The Obama administration started granting waivers to states after Congress failed to reform NCLB and has stated that in order to receive waivers states must show compliance with federal education standards, which include teacher assessment, aid for needy students, and a lessened importance on standardized testing.



HOUSE SUBCOMMITTEE APPROVES FY 2013 LABOR, HHS, AND EDUCATION APPROPRIATIONS BILL

The House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies yesterday approved the FY 2013 appropriations bill for those agencies by a vote of 8-6. In total, FY 2013 spending for the agencies covered under the bill would be set at $150 billion, which is a reduction of $6.3 billion from the fiscal year 2012 level and $8.8 billion below the President’s budget request. 

The Department of Labor’s budget for FY 2013 would be set at $12 billion, a decrease from the FY 2012 funding level of $12.6 billion. Level funding of $2.6 billion is provided for the primary state-federal grant programs for adults, youth and dislocated workers. The bill restores governors’ authority to reserve up to 15 percent of statewide adult, youth, and dislocated workers funds. 

The Department of Health and Human Services’ budget would be set at $68.3 billion for FY 2013, a reduction of $1.3 billion below last year’s level and $1.8 billion below the President’s budget request. Within this total, the Substance Abuse Block Grant for states and localities would receive $1.73 billion (an increase of $10 million) and the Low Income Home Energy Assistance Program (LIHEAP) block grant would receive $3.4 billion (the same as last year’s level and an increase of $451 million above the President’s budget request). The bill would rescind prior-year mandatory funds to implement the Affordable Care Act, as well as prohibit the use of any new discretionary funding to implement the law. The bill also targets HHS programs and agencies for termination, including the Agency for Healthcare Research and Quality. 

Total funding for the Department of Education in fiscal year 2013 would be $70 billion, a decrease from the FY 2012 funding level of $71.1 billion. Funding for Title I education grants is set at $14.5 billion, which is level funding, and funding for Individuals with Disabilities Education Act Part B grants is set at $12.1 billion, an increase of $500 million. The bill would also eliminate a number of education programs including Race to the Top, School Improvement Grants, and the Investing in Innovation Fund.



BILL HOUSE PASSES BILL DEMANDING SEQUESTER DETAILS FROM THE OBAMA ADMINISTRATION

The House almost unanimously, 412-2, passed a bill this past week demanding details from the Obama Administration regarding the budgetary sequestration scheduled to take effect in 2013 after the failure of the debt ‘supercommittee’ last fall. 

Unless Congress acts by January, the Office of Management and Budget must cut $109 billion from both discretionary and mandatory spending. Though scheduled cuts to the Department of Defense have been among the most publicized of consequences a wide array of programs and agencies will have reduced budgets, ranging from student aid, Medicare and infrastructure development. 



HOUSE COMMITTEE APPROVES BYRNE JAG AND ADAM WALSH ACTS

The House Judiciary Committee passed H.R. 6062, the Edward Byrne Memorial Justice Assistance Grant Program Reauthorization Act of 2012 yesterday by voice vote. The bill reauthorizes the Edward Byrne Memorial Justice Assistance Grant Program (Byrne JAG) for five years and authorizes $800 million in annual funding. An amendment offered by Rep. Johnson (D-GA) that would have increased the annual funding to $1.1 billion failed by a vote of 7-13. 

In addition, the Committee also passed H.R. 3796, the Adam Walsh Reauthorization Act of 2012, by voice vote. The legislation reauthorizes certain programs under the Adam Walsh Act, including Title 1 of the act, the Sex Offender and Registration and Notification Act (SORNA). Under SORNA, states that are not determined to be in compliance with the law will lose 10 percent of their annual Byrne JAG funding. 

To date, only 17 states and territories, including Nevada, have been deemed to be in substantial compliance. H.R. 3796 reauthorizes the Adam Walsh Act for five years and authorizes $46.2 million in grant funds to states to assist in the implementation of SORNA. The legislation also amends the amount of time a juvenile offender must be placed on the national registry from 25 years to 15 years. 



NEW TANF WAIVER DEMONSTRATION ESTABLISHED

The Administration for Children and Families (ACF) announced its decision late last week to waive certain TANF provisions for states and territories to test more efficient or effective means of helping more families find jobs and move toward self-sufficiency. Under the new TANF Waiver demonstration, states and territories may use these expanded flexibilities to test alternative and innovative strategies, policies and procedures that create effective employment outcomes for needy families. 

Each TANF waiver demonstration project must identify interim performance targets and be accompanied by a high quality evaluation plan to hold states accountable for outcomes and inform future policy decisions. ACF will work with states and territories interested in developing waiver demonstration projects. Inquiries and applications for the TANF waiver demonstration project should be directed to the appropriate TANF program manager in your Health and Human Services Region. A copy of the complete Information Memorandum is available here.



NEW NGA CHAIR GOVERNOR MARKELL (D-DE) ANNOUNCES YEAR-LONG INITIATIVE

Governor Markell became the new chair of the National Governor’s Association at the Summer Meeting, which began on July 12th and ended July 15th. Governor Markell announced that during his year as Chair he will be focusing on an initiative called ‘A Better Bottom Line: Employing People with Disabilities’, a program which aims at assisting unemployed workers with disabilities find jobs. 

‘A Better Bottom Line’ will help those with intellectual or developmental disabilities as well as those suffering from physical disabilities. The program will give policy information and options to interested governors and state legislators as well as serve as a conduit to allow successful practices to be disseminated.