Federal Issues Update
July 13, 2017
Following the Independence Day recess, the fiscal year 2018 budget process has kicked into high gear on Capitol Hill. House appropriators unveiled five annual spending measures this past week, advancing five bills at the subcommittee level, with the full committee approving three. Altogether, the Appropriations Committee has now approved seven bills, with several others slated for action next week.
The committee’s aggressive schedule reflects an effort to have all 12 of the fiscal year 2018 spending bills ready for floor action prior to the August recess. However, despite the progress made in recent weeks, appropriators are still far behind schedule. With time running short before the start of the new fiscal year, GOP leaders are now discussing whether to bundle multiple pieces of legislation into a massive omnibus spending package or into several smaller “minibus” funding measures.
Across Capitol Hill, and with very few legislative accomplishments to show, Senate Majority Leader Mitch McConnell (R-KY) announced this week that the upper chamber will delay the start of its annual summer recess. The five-week recess for both the House and Senate had been set to start on July 29, but the Senate will now stay in session until the third week of August. The House is unlikely to delay its recess unless there is an imminent vote on health care.
Earlier today, Senate GOP leadership released a new 172-page version of their Affordable Care Act (ACA) repeal and replacement bill – entitled the Better Care Reconciliation Act (BCRA). However, the updated discussion draft still includes deep cuts to the Medicaid program, which would be achieved largely by phasing out the ACA’s enhanced federal match and also by limiting funding to each state based on their per capita spending for different groups participating in the program.
It should be noted that a new Medicaid provision would give states the ability to draw down additional funds in case of a regional public health emergency. To qualify, the federal government must declare a public health emergency in that state, and the Secretary of Health and Human Services must make a determination that new funding should be made available. In addition, the BCRA would substantially increase funding to address the opioid crisis and other substance abuse issues.
The draft bill also makes additional changes to health plans, including allowing insurers who have at least one plan complying with the ACA’s essential health benefits package and coverage of pre-existing conditions to offer a plan only covering catastrophic health events. Similar to the ACA plans, individuals could use tax credits to help pay for those plans. Given the expected increase in costs of plans for individuals who have chronic health issues, the bill provides at least $182 billion between 2019 and 2026 to states to create high-risk pools to cover individuals who cannot afford the increase in premiums and deductibles.
The Congressional Budget Office is expected to provide new cost estimates of the changes within the next few days. For his part, Majority Leader Mitch McConnell (R-KY) has stated that he will bring the bill to the floor next week. However, it remains unclear whether he will have the necessary votes to even move to consideration of the bill. Given the 52-48 split in the upper chamber, and in light of united opposition from Democrats, the legislation would fail if more than two Republicans were to reject the measure.
California Drought Bill Clears House
The House passed on Wednesday legislation designed to provide more water to California’s Central Valley. The bill (HR 23), entitled the Gaining Responsibility on Water Act of 2017 and sponsored by Representative David Valadao (R-CA), was approved on a 230-190 vote. Representative Jim Costa (D-CA) was the sole Democrat to join all California Republicans in voting for the measure.
While Republicans maintain that the legislation would streamline the construction of key water storage projects and allow more water to be sent to the arid Central Valley, Democrats roundly criticized the bill for provisions they say would waive the Endangered Species Act and other environmental laws. The floor discussion was a repeat of previous year’s debates over how to address California’s water management challenges, which have been heightened due to the recent historic drought conditions in the state.
Across Capitol Hill, Senators Dianne Feinstein (D-CA) and Kamala Harris (D-CA) released a joint statement expressing strong opposition to HR 23. The opposition of California’s two senators minimizes the chances for the bill to be heard in the upper chamber.
House Committee Holds Hearing on Indian Trust Land Acquisition
On Thursday, July 13, the House Natural Resources Committee’s Indian, Insular, and Alaska Native Affairs Subcommittee held an oversight hearing entitled “Comparing 21st Century Trust Land Acquisition with the Intent of the 73rd Congress in Section 5 of the Indian Reorganization Act.” The subcommittee, which is chaired by Representative Doug LaMalfa (R-CA), received testimony from the following witnesses: James Cason, the acting deputy secretary for the Department of the Interior; Kirk Francis, president of the United South and Eastern Tribes; Fred Allyn, the mayor of Ledyard, CT; and, Don Mitchell, a private attorney from Anchorage, AK.
The hearing provided a forum for an examination of the Department of the Interior’s role in the land-into-trust process and ultimately evolved into a discussion about how Congress should address the implications of the Supreme Court’s 2009 Carcieri v. Salazar decision. In Carcieri, the Court determined that the secretary of the Interior’s trust land acquisition authority is limited to those tribes that were “under federal jurisdiction” at the time of the passage of the Indian Reorganization Act (IRA) of 1934. Since the Court’s ruling, Indian tribes have demanded a simple legislative reversal of the Carcieri decision while county governments, led by CSAC, have pursued comprehensive reforms to the Bureau of Indian Affairs’ (BIA) fee-to-trust process.
Having heard differing views from the witnesses regarding Carcieri and the BIA’s fee-to-trust process, several members of the subcommittee asked for continued input from stakeholders regarding their objectives for a legislative solution. For its part, CSAC has continued to aggressively promote the association’s own legislative proposal, which would provide a comprehensive overhaul of the BIA’s fee-to-trust process.
Appropriations Update: Transportation-Housing and Urban Development
On July 11, the House Appropriations Subcommittee on Transportation, Housing and Urban Development (T-HUD) approved its fiscal year 2018 spending bill. In all, the measure would provide $56.5 billion in discretionary spending – $1.1 billion below fiscal year 2017 and $8.6 billion above the president’s budget – for the Department of Transportation, the Department of Housing and Urban Development, and other related agencies.
Among other things, the bill would allocate $45 billion from the Highway Trust Fund for the Federal-aid Highway Program, which is $968 million above current spending. The proposed funding – which supports local road, bridge, and safety projects – mirrors the levels authorized in the latest highway reauthorization measure (FAST Act).
Notably, the legislation would eliminate funding for DOT’s discretionary TIGER Grant program, a potential cut of $500 million. The grants are awarded to states and local governments for infrastructure construction and improvements.
With regard to high speed rail (HSR), the bill prohibits funding from going to the California HSR project or to the California High Speed Rail Authority. It also bars the Federal Railroad Administration from administering a recent grant agreement with the Authority. In addition, the bill prevents the Surface Transportation Board from taking action regarding the construction of high-speed rail in California unless the Board has jurisdiction over the entire project.
Finally, the legislation proposes a $100 million cut to both the Community Development Block Grant (CDBG) program and the HOME Investment Partnerships Program. The subcommittee did, however, endorse level funding for the Homeless Assistance Grant program ($2.4 billion). It should be noted that the legislation includes a policy rider that would prevent the Federal Housing Administration (FHA) from backing mortgages with a Property Assessed Clean Energy (PACE) lien.
The bill was approved by a unanimous voice vote and will be considered before the full panel on July 17.
Appropriations Update: Interior-Environment
On July 12, the House Appropriations Subcommittee on Interior and Environment approved its fiscal year 2018 spending bill. The measure would provide nearly $31.4 billion ($824 million below the fiscal year 2017 enacted level and $4.3 billion above the president’s request) in discretionary spending for the Department of the Interior, the Bureau of Land Management (BLM), the U.S. Forest Service, EPA, and related agencies.
Of particular interest to California’s counties, the legislation includes level funding ($465 million) for the federal Payments-in-Lieu-of-Taxes (PILT) program, $68 million more than the Trump administration requested. In addition, the measure would fully fund the 10-year average for wildland fire suppression costs and includes $575 million for hazardous fuels management, which is $5 million above the fiscal year 2017 level.
As expected, the House legislation also includes a number of extraneous policy riders. For example, the bill includes language authorizing EPA and the Army Corps of Engineers to withdraw the Obama-era rule governing Waters of the United States (WOTUS).
Appropriations Update: Homeland Security
On July 12, the House Homeland Security Appropriations Subcommittee approved its fiscal year 2018 spending bill. In total, the legislation would provide $44.3 billion in discretionary funding for the Department of Homeland Security, which is $1.9 billion above the fiscal year 2017 enacted level.
Among other things, the bill would maintain current funding for a number of state and local grant programs, including firefighter assistance grants, Emergency Management Performance Grants, the State Homeland Security Grant Program, and the Urban Area Security Initiative. The meaure also includes the president’s request for $1.6 billion to construct a physical barrier along the Southern border. This will inevitably set up a spending showdown with Democrats, who have pledged to block any funding for a border wall.
The full committee is slated to consider the bill on July 18.
Appropriations Update: Commerce-Justice-Science
On July 13, the House Appropriations Committee approved its fiscal year 2018 Commerce-Justice-Science spending bill. The bill would provide $54 in total discretionary funding to the Departments of Commerce and Justice, NASA, and related agencies. The proposed investment would be $2.6 billion less than the fiscal year 2017 enacted level and $4.8 billion above the president’s budget request for these programs.
With regard to funding for state and local law enforcement assistance, the House bill would provide $220 million for the State Criminal Alien Assistance Program (SCAAP), an increase of $10 million. In addition, the CJS bill would increase funding by over $102 million for core Byrne-Justice Assistance Grants (Byrne/JAG). It also would eliminate funding for the COPS hiring grant program. However, the legislation does provide $65 million for initiatives to improve police-community relations and an additional $45 million for the Comprehensive School Safety Initiative.
Appropriations Update: Energy-Water
On July 12, the full Appropriations Committee approved its fiscal year 2018 Energy and Water Development spending legislation. The bill, which funds the Department of Energy (DOE), the U.S. Army Corps of Engineers, the Bureau of Reclamation, and several independent agencies, was cleared on a party line vote.
All told, the measure proposes to spend $37.56 billion, or $209 million below the fiscal year 2017 enacted level and $3.65 billion above the president’s budget request. While Army Corps programs would see an increase of $120 million, funding for the Bureau of Reclamation would be reduced by $79 million. Energy programs would sustain the largest overall cut in funding, decreasing from a level of $11.3 billion this year to $9.6 billion in fiscal year 2018. The proposal would also slash funding for DOE’s energy efficiency and renewable energy program.
The House bill also includes several policy riders, including language authorizing the administrator of the EPA and the Secretary of the Army to withdraw the WOTUS rule. It also would prohibit federal funding from being used to require a permit for the discharge of dredged or fill material under the Clean Water Act.