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.