Federal Issues Update: House Recess Looms, Senate to Stay in Session
With the start of summer recess quickly approaching, House lawmakers worked this week to tie up a number of loose ends before leaving town for their month-long August recess. While the lower chamber is slated to adjourn at the close of business on July 26, the Senate is expected to remain in session throughout the summer in order to focus on confirming a growing list of Trump nominees, as well as consider a number of unfinished legislative items.
On July 25, the full House approved legislation (S 1182) that includes a clean, four-month extension of the National Flood Insurance Program (NFIP). The program’s authorization, which is set to expire on July 31, would be extended through November 30 under the terms of S 1182.
For their part, fiscal conservatives in the Senate have called on Congress to address the NFIP’s fiscal problems before extending the program. According to a report by the Congressional Budget Office (CBO), the program pays out an average of $1.4 billion more per year than it collects in revenue. Senators Mike Lee (R-UT) and Jeff Flake (R-AZ), in particular, have been reluctant to discuss an extension that does not include some financial relief for the program. With the deadline quickly approaching, it is still unclear if Lee and Flake will attempt to delay consideration of S 1182.
House lawmakers also approved this week several bills that would scale back portions of the Affordable Care Act (ACA), including legislation (HR 184) that would repeal the tax on medical devices. The lower chamber cleared a separate measure (HR 6311) that would delay for another two years an annual fee imposed on health insurance providers; expand catastrophic coverage availability; and, increase the contribution limits to health savings accounts.
In addition to the aforementioned legislation, the House approved a bill (HR 1689) that would restrict the ability of state and local governments to exercise the power of eminent domain to take property for private economic development purposes. The measure would effectively overrule the 2005 Supreme Court decision in Kelo v. City of New London.
Pursuant to HR 1689, state and local governments found by a court to have violated the bill’s restrictions would be barred from receiving federal economic development funds for a period of two years. It should be noted that CBO has determined that very few state or local governments would be impacted as a result of the bill due to the fact that the proscribed use of eminent domain would be infrequent. A similar version of HR 1689 passed the House in 2011 and 2014 but was never considered by the Senate.
The Senate is currently considering a funding package that combines the following fiscal year 2019 spending measures: Interior-Environment, Financial Services and General Government, Transportation-Housing and Urban Development (T-HUD), and Agriculture. To date, the chamber has advanced three of the 12 annual spending bills, including Energy and Water Development (E&W), Military Construction-Veterans Affairs (MilCon), and the Legislative Branch. The remaining five measures are awaiting floor consideration.
Meanwhile, the House has cleared six FY 19 spending bills (Interior, Financial Services, E&W, MilCon, Legislative Branch, and Defense). In addition, the House Appropriations Committee this week approved its Department of Homeland Security (DHS) spending measure. Like its Senate counterpart, the panel has now successfully cleared all 12 funding bills for the fiscal year that starts October 1.
In total, the House DHS bill would provide $51.4 billion in discretionary funding for the Department, $3.7 billion above current levels. Notably, the increased funding would be used to partially offset the $5 billion included in the bill for President Trump’s border wall. According to the House Appropriations Committee, the funding would provide for over 200 miles of new physical barrier construction along the U.S.-Mexico border. It should be noted that the administration formally requested $1.6 billion for the wall as part of its fiscal year 2019 budget submission to Congress, though the president has informally told lawmakers that he would prefer $5 billion.
For their part, Democrats have harshly criticized GOP appropriators for including the additional wall funding, foreshadowing what will likely be a drawn-out fight over the DHS bill as it moves through the legislative process. However, despite the divide over border wall funding, there was some bipartisan agreement on efforts to push back against the administration’s immigration policies. For example, a manager’s amendment, which was adopted by voice vote, would require facilities detaining minors to allow members of Congress to have access to their centers for inspections. A separate amendment would bar the removal or detention of undocumented immigrants in the Deferred Action for Childhood Arrivals (DACA) program who are veterans or active-duty service members.
Looking ahead, Democrats will continue to oppose the increased funding for the wall, particularly in the absence of a permanent solution to the expired DACA program.
Earlier this week, the chairman of the House Transportation & Infrastructure Committee, Representative Bill Shuster (R-PA), released the legislative text of a broad public works package. The proposal, which is in the form of a “discussion draft,” is not expected to move in the current session of Congress. Rather, as described by Chairman Shuster, the draft “is intended to further the national conversation about the current state of America’s infrastructure and highlight some of the major roadblocks to funding and improving our transportation network.” Shuster also recently noted in public remarks that the discussion draft does not constitute a complete and final infrastructure measure.
While the proposal is unlikely to gain traction in 2018, the draft provides an indication of where congressional Republicans would like to take an infrastructure bill next year, assuming the GOP retains control of the House after this fall’s mid-term elections.
Among other things, the draft bill calls for overhauling the manner in which the federal government finances surface transportation programs. In the short term, the proposal would phase in over three years a 15 cent-per-gallon increase in gasoline taxes (20 cents for diesel fuel). After the three-year phase in, the taxes would adjust annually for inflation. Beginning on September 30, 2028, however, those fuel taxes would be entirely eliminated.
Incidentally, the bill does not prescribe a post-2028 replacement mechanism for financing roads and bridges. Instead, the draft would establish a “Highway Trust Fund (HTF) Commission,” which would be responsible for making recommendations to Congress regarding ways to achieve long-term solvency of the trust fund. In recent years, the HTF has needed a series of general fund bailouts due to steadily declining revenues resulting from decreases in fuel consumption. Notably, the commission would be barred from submitting a report to lawmakers that recommends enacting a federal excise tax on gasoline or diesel fuel as a means of achieving solvency.
The draft also calls for the establishment of a voluntary pilot program to test the viability of replacing the revenues derived from fuel taxes with a per-mile user fee. The primary objective of the program would be to test the design, acceptance, implementation, and financial sustainability of such a system on the national level. The pilot program would be administered by the Secretary of Transportation, in coordination with the secretary of the Treasury.
Finally, the bill includes several other notable features, including a five-year authorization for a “National Infrastructure Investments Program.” The program would be similar to DOT’s BUILD initiative (formerly the TIGER grant program). The draft also includes a section on accelerating project delivery, which among other things, would seek to ensure that DOT is able to carry out the reforms and two-year permitting deadlines called for under the Trump administration’s One Federal Decision Executive Order.