Update from Washington, D.C. 10/07/2011
Returning from a week-long recess, Congress quickly got back to
work on the fiscal year 2012 federal budget. A stopgap spending
bill cleared by the Senate on September 26 was approved by the
House and signed by President Obama this week. A previous
extension lasted only a few days, but kept the government funded
from the start of the new fiscal year on October 1 until October
4. The latest measure keeps the government funded through
November 18 at the discretionary spending limits agreed upon in
the debt limit deal. This gives lawmakers an additional six weeks
to finalize the fiscal year 2012 spending levels.
Appropriators are now left to sort out funding levels for
individual agencies and programs before the new deadline, but
this will be no easy task as Congress has failed to clear any of
the fiscal year 2012 appropriations bills. To date, the House has
passed six of the 12 bills, while the Senate has only completed
one. Given the lack of progress, and with few legislative days
remaining in the session, it is increasingly likely that Congress
will be forced to bundle most, if not all, of the appropriations
bills into a massive omnibus spending package, or possibly
consider several smaller “mini-buses”.
House GOP appropriators recently released committee reports for
two of the spending measures: State-Foreign Operations and
Transportation-Housing and Urban Development. They also unveiled
draft text of the Labor-HHS-Education spending measure, which is
unlikely to be marked up in the short time remaining. These
documents provide House Republicans an opportunity to set markers
for their upcoming negotiations with Senate Democrats.
All three of the aforementioned appropriations bills will be
controversial to Democrats and could likely force another budget
showdown later this year. For instance, the Labor-HHS proposal
would significantly cut funding for implementation of the health
care reform law, while prohibiting the Department of Health and
Human Services from continuing any implementation of the law
until 90 days after all legal challenges are complete. It also
prohibits funding to Planned Parenthood and eliminates funding
for Title X, which pays for contraceptives and cancer
screenings.
In other news, a bipartisan group of senators announced October 5
that they had reached an agreement in principle on a five-year
reauthorization of both the Secure Rural Schools (SRS) and
Payments-in-Lieu-of-Taxes (PILT) programs. PILT provides federal
payments to local governments that help offset losses in property
taxes due to federal lands within their boundaries. SRS, which
expired on October 1, is another program that is used to help
local governments provide services such as firefighting and
police protection, as well as construction of public schools and
roads.
Under the proposal, SRS payments are expected to start at fiscal
year 2011 levels and decline five percent per year, while PILT
payments would be maintained at current levels. Apart from the
new end-date and the five percent ramp down, the only other
change from the previous authorization is a provision that allows
a Title II Resource Advisory Committee (RAC) to donate up to 10
percent of its Title II payment to the Forest Service or Bureau
of Land Management to help the agencies cover the cost of
staffing. This would be voluntary and completely controlled by
the RAC and the counties within the geographic area of the
RAC.
The senators have yet to identify a viable offset for this
proposal, and without one, the bill will not move beyond the
committee level. Nonetheless, the senators are optimistic that
legislation could be introduced as soon as next week.
In addition to the fiscal year 2012 appropriations process and
SRS reauthorization, Congress also was hard at work on three free
trade agreements. The House Ways and Means Committee approved
deals with Columbia (HR 3078), South Korea (HR 3080), and Panama
(HR 3079) on October 5, setting the stage for full House approval
next week, followed by Senate action in the near future. These
agreements are expected to move in tandem with Trade Adjustment
Assistance (TAA) legislation that provides aid to workers
displaced by foreign trade. All four measures are expected to
pass relatively smoothly through the House and Senate in the
coming weeks.
In other developments, deficit reduction talks in Congress are
ongoing as the supercommittee continues to craft a plan that will
reduce the deficit by at least $1.2 trillion over the next
decade. The panel has only conducted a few open hearings, but
members have met privately on a number of occasions.
Republicans on the panel have not dismissed the need for
additional revenue, so long as most or all of the extra money
comes from projections of improved economic growth. This leaves
the door open to a controversial method of savings projections
called “dynamic” scoring that takes into account the anticipated
benefits of tax cuts. For their part, Democrats have not balked
at GOP proposals on comprehensive tax reform. However, it will
certainly be difficult for the panel to accomplish a complete tax
overhaul in only a matter of weeks, even with bipartisan
cooperation.
In another rare display of bipartisanship, Congress recently
adopted a renewal of Title IV-B child welfare services programs.
The Child and Family Services Improvement and Innovation Act (S
1542/HR 2883) was signed into law by President Obama on September
30.
Among other provisions, the measure includes new state
requirements to track psychotropic medications given to children
in the child welfare system. The new law also requires 50 percent
of all caseworker visits to be made in the child’s residence.
Additionally, the Act restores the authority of the Department of
Health and Human Services to grant child welfare services
waivers, but does not make any changes to California’s existing
Section 1115 demonstration waiver.