Update from Washington, D.C. 03/01/2013
Lawmakers returned to the nation’s capital this week after a
short break, and, as reported in today’s lead story, the debate
regarding sequestration took center stage. With the automatic,
across-the-board budget cuts slated to take effect around
midnight on March 1, members of Congress and Obama administration
officials turned up the partisan rhetoric as each side blamed the
other for failing to act to avert the indiscriminate cuts.
Because the spending reductions must be achieved over only seven
months instead of 12, the White House Office of Management and
Budget (OMB) has advised that the effective percentage decreases
will be approximately nine percent for nondefense programs and 13
percent for defense programs.
It should be noted that the budget cuts will likely begin to be phased in by most federal agencies and departments over the course of the next 30 days. Some federal agencies, however, announced early the week of February 25 that they had already begun the process of instituting policy directives and cutbacks designed to achieve the requisite budgetary savings.
With the March 1 deadline looming, House Speaker John Boehner (R-OH) made it clear earlier this week that it was up to the Senate to pass an alternative budget-cutting package. Boehner pointed to the fact that the lower chamber had approved two sequester-replacement bills (HR 5652; HR 6684) in the previous Congress.
In the Senate, lawmakers debated, and subsequently defeated, two sequester replacement bills this past week. The first measure, a Republican-sponsored bill (S 16), would have given President Obama until March 15 to send Congress an alternative package of targeted spending cuts. Under the legislation, lawmakers could block the president’s plan only by passing a resolution of disapproval. The second measure, a Democratic bill (S 388), would have replaced the sequester with a combination of spending reductions and revenue increases. According to the Congressional Budget Office (CBO), this proposal would add $7.2 billion to the deficit over the next 10 years.
Although rank-and-file members of Congress left town without passing an alternative to sequestration, top Republican and Democratic congressional leaders remained in Washington and were scheduled to meet with President Obama to discuss a potential way forward. Notably, the March 1 meeting would be the first face-to-face discussion between the president and congressional leaders on sequestration since the start of the new year.
The White House has released a report on the impact that sequestration will have on a state-by-state basis. The report can be accessed here: White House Sequester Fact Sheet – CA.
Aside from sequestration, lawmakers also were dealing with how to address spending for the remainder of fiscal year 2013, which began in October. The current six-month stopgap funding bill (PL 112-175) expires on March 27, when Congress is scheduled to be on its Easter recess.
For his part, House Appropriations Chairman Harold Rogers (R-KY) is drafting a package that would combine a continuing resolution for most federal agencies with new spending bills for the Department of Defense and Military Construction/Veterans Affairs. This is intended to give military and veterans’ programs greater flexibility to manage spending for the final six months of fiscal year 2013. Across Capitol Hill, Senate Appropriations Chairwoman Barbara Mikulski (D-MD) intends to craft a package containing all 12 unfinished fiscal year 2013 spending measures.
Both proposals are expected to abide by the spending limits prescribed in the two recent budget control measures (PL 112-25; PL 112-240). However, it should be noted that the sequester, if it is not eliminated or changed during the coming months, would reduce the federal government’s operating expenses for fiscal year 2013 from the current $1.043 trillion level to around $974 billion.
In related news, there have been signals from the White House that the president’s fiscal year 2014 budget will likely be released in late March. While there was no official announcement, administration officials have been told to prepare for a March 25 release. By law, the president is required to issue his budget proposal on the first Monday in February, but the administration has blamed the delay on a number of fiscal uncertainties, including the end of year fiscal cliff deliberations.
The budget delay has no doubt created challenges for lawmakers in both chambers who are drafting congressional budget resolutions. The deadline for the House and Senate to agree on a joint budget resolution is April 15. At this point, the Budget committees are tentatively planning to mark up their respective resolutions in the second week of March, with House and Senate consideration expected the following week.
In other developments, the House approved legislation (S 47) February 28 that would reauthorize the Violence Against Women Act. The bill, which the Senate endorsed on February 12, renews programs meant to reduce domestic violence, sexual assault, and stalking. It also helps support the victims of those crimes.
While the law has enjoyed broad bipartisan support in the past, the latest renewal had been mired in both partisan and policy fights. Republicans, in particular, have raised concerns about language included in S 47 that would extend domestic violence protections to lesbian, gay, bisexual, and transgender (LGBT) victims. Conservative members also expressed concern over provisions that would, for the first time, grant criminal jurisdiction to Native American courts over non-Indians. Opponents of the language argue that the provisions go too far by depriving defendants of constitutional rights and guaranteed protections afforded under the Bill of Rights.
Although House GOP leaders put forward an alternative bill, which did not include the LGBT protections and which included tribal language that would have provided delegated federal power to Native courts, the proposal was rejected.
In other news, a bipartisan group of lawmakers in both the House and Senate recently reintroduced remote sales tax legislation. The bill – the Marketplace Fairness Act of 2013 (S 336; HR 684) – would provide states with the authority to require out-of-state remote sellers to collect and remit sales and use taxes. It should be noted that this measure reconciles differences between three competing proposals (the Marketplace Equity Act of 2011; the Main Street Fairness Act of 2011; and the Marketplace Fairness Act of 2011) that were introduced in the last Congress.
The compromise bill includes a number of positive features that CSAC has advocated. For example, it provides an alternative to joining the Streamlined Sales and Use Tax Agreement (SSUTA). States like California that have not signed onto the SSUTA could instead choose to adopt a minimum set of simplification requirements. The legislation also would require retailers to collect the full destination rate – the applicable state and local tax rate – on remote sales. In addition, the bill includes language specifying that it would only apply to remote purchases and would have no effect on intrastate sales or intrastate sourcing rules. Retailers with less than $1 million in annual remote sales would be exempt from the tax collection requirements.
Finally, the Senate this week confirmed Jacob Lew to serve as Treasury Secretary and Chuck Hagel to serve as the next Defense Secretary.