Update from Washington, D.C. 09/12/2011
Members of Congress returned to Capitol Hill from their
month-long summer recess on September 6 to confront a long list
of unfinished business. In the face of a disappointing August
jobs report and a stubborn unemployment rate hovering above nine
percent, lawmakers will look to shift their focus from spending
cuts to job growth. However, the work of the newly created Joint
Select Committee on Deficit Reduction is likely to be the main
focus in Washington this fall. Created as part of the debt limit
increase law, the so-called “supercommittee” has been tasked with
further reducing the deficit by as much as $1.5 trillion. If they
are unable to identify at least $1.2 trillion in savings, or if
Congress fails to approve their recommendations by December 23,
across-the-board spending cuts would be triggered.
House and Senate leaders named their picks to the committee in
August, selecting Senators Patty Murray (D-WA), John Kerry
(D-MA), Max Baucus (D-MT), Jon Kyl (R-AZ), Pat Toomey (R-PA), and
Rob Portman (R-OH). They will be joined by Representatives Jeb
Hensarling (R-TX), Dave Camp (R-MI), Fred Upton (R-MI), James
Clyburn (D-SC), Xavier Becerra (D-CA), and Chris Van Hollen
(D-MD).
The committee held its inaugural hearing on Thursday, September
8, in which it was clear that members had a willingness to work
together to achieve their mutual goals. Despite this brief moment
of bipartisanship, this will be no easy task as the two parties
have wide ideological differences. Republicans are calling for
changes to entitlement programs like Social Security and
Medicare, while Democrats are insisting on job-creation measures
and additional revenue.
President Obama used the first week back to unveil his plan for
an economic recovery package before a joint session of Congress.
His plan – called the American Jobs Act – features a mix of tax
cuts for workers and businesses, as well as billions of dollars
in spending geared toward infrastructure projects, aid to states,
and unemployment insurance.
Notably, the president also is proposing a Pathways Back to Work
Fund, focusing on low-income youth and adults. The initiative is
modeled after the American Recovery and Reinvestment Act,
including several provisions that were successfully implemented
by California’s counties. The Initiative would do three things:
1) support summer and year-round jobs for youth, building off of
successful programs that supported over 370,000 such jobs in 2009
and 2010; 2) support subsidized employment opportunities for
low-income individuals who are unemployed, building off the
successful TANF Emergency Contingency Fund wage subsidy program
that supported 260,000 jobs in 2009 and 2010; and, 3) support
promising and innovative local work-based job and training
initiatives to place low-income adults and youths in jobs
quickly.
While some of the tax cuts in the administration’s package could
be attractive to the GOP, the size and scope of spending included
in the proposal will likely be a tough sell for House
Republicans, many of whom have been focusing on reducing the size
of government. For their part, House Republicans are planning an
initiative that focuses on rolling back regulatory policies that
they deem overly burdensome. Among other things, the GOP proposal
would give Congress additional oversight over the federal
rulemaking process.
In addition to the deficit committee’s work and economic
recovery-related efforts, lawmakers will continue to labor over
the various appropriations bills for fiscal year 2012. With less
than a month to complete all twelve spending measure before the
next fiscal year begins, a continuing resolution will be required
to fund the federal government beyond October 1. According to
House Majority Leader Eric Cantor (R-VA), the House is likely to
vote on a short-term extension the week of September 19.
Depending on the length of the extension, a massive omnibus
measure may be needed to quickly solidify the remaining
appropriations bills through fiscal year 2012.
Regardless of the end-game strategy on the fiscal year 2012
budget, appropriators in both houses of Congress are continuing
to work their way through individual spending measures. In the
House, the Subcommittee on Transportation-Housing and Urban
Development (T-HUD), as well as the Subcommittee on Labor-Health
and Human Services, used the first week back in session to mark
up their respective draft bills.
With regard to the T-HUD appropriations legislation, the draft
measure would allocate $16.7 billion for the Department of
Transportation, which is $3 billion more than fiscal 2011 levels
but $15.8 billion less than President Obama’s fiscal 2012
request. Under the bill, highway program funding would be cut
from $41 billion to $27 billion, with funding for transit reduced
from $8.3 billion to $5.2 billion.
For the Department of Housing and Urban Development, the
legislation would provide $38.1 billion, $3 billion below current
funding and $4 billion below the president’s request. The draft
measure would fund the Community Development Block Grant (CDBG)
formula program at $3.5 billion, a $200 million increase.
On the other side of Capitol Hill, the Senate Appropriations
Committee recently approved both the Energy and Water Development
and the Homeland Security spending bills. The Energy and Water
draft, which will fund the Department of Energy, the Army Corps
of Engineers, and water programs for the Department of Interior,
totals $31.6 billion. This amount is $57 million less than
current funding and $4.9 billion less than the president’s
budget.
The DHS spending bill totals $41 billion, which is $2.6 billion
below the president’s budget and $666 million below current
spending. In terms of grants to state and local governments, the
Senate draft does not include cuts as deep as those proposed in
the House-enacted version of the bill. In addition, the Senate
measure would not consolidate DHS state and local grant programs
as the House bill proposes.
In other news, there are a number of expiring programs that will
compete for consideration in the coming weeks, such as a
reauthorization of the Temporary Assistance for Needy Families
(TANF) program, the nation’s surface transportation law
(SAFETEA-LU), and the Federal Aviation Administration (FAA).
Congress must also extend federal authority to collect the $18.4
cents per gallon tax on gasoline, which funds highway
construction spending.
Last week, the House Ways and Means Subcommittee on Human
Resources held a hearing on TANF reauthorization. During the
hearing, Subcommittee Chairman Geoff Davis (R-KY) made it clear
that TANF would receive a temporary extension of current law,
since there was little time to consider a reauthorization bill
before it expires at the end of this month. Witnesses at the
hearing discussed the tensions between the TANF’s proscriptive
work rules, the current economy, and the multiple barriers many
TANF recipients must address before they are able to obtain a
job.
With regard to surface transportation reauthorization, the Senate
Environment and Public Works (EPW) Committee has been the first
to act on another SAFETEA-LU extension, approving a four-month
continuation of authority for highway programs. Provisions that
would extend the federal gas tax are expected to be added to the
SAFETEA-LU extension once it reaches the Senate floor. Notably,
this is the eighth short-term extension and will expire at the
end of January 2012.
In the House, it was announced at press time that Republicans
plan to bring a six-month surface transportation extension to the
floor House later this week. The bill would extend SAFETEA-LU
through next March. The legislation also would extend FAA funding
through December 31.
The FAA is currently operating under a short-term extension of
the funding levels that were approved for the agency in 2004. The
FAA was forced to partially shut down in August after the last
impasse, in which 4,000 workers were furloughed.