Update from Washington, D.C. 12/07/2012
After a one-week break to celebrate the Thanksgiving holiday,
lawmakers returned to the nation’s capital to continue their
“fiscal cliff” discussions. While congressional leaders on both
sides of the aisle have signaled a willingness to forge an
agreement to avert the across-the-board spending cuts and tax
increases that threaten to plunge the nation’s economy back into
recession, a compromise has been elusive.
For his part, President Obama has offered a proposal that calls for $1.6 trillion in tax increases, $400 billion in entitlement program savings, an extension of both the payroll tax holiday and unemployment assistance, and $50 billion in new stimulus spending. The president also is seeking to permanently limit the ability of Congress to block an increase in the debt ceiling. While the president’s opening bid was praised by progressives, it was blasted by Republicans who accused the White House of taking a step backward in the negotiations.
House GOP leaders have countered the president’s plan with a proposal to cut $2.2 trillion from the deficit with a combination of spending cuts, entitlement reforms, and $800 billion in new tax revenue. It should be noted that the Republican counteroffer does not include an increase in the debt ceiling, but the party is reportedly open to negotiating additional borrowing authority for the Treasury before the end of the year. Democrats have criticized the Republican plan, saying that the proposal is not balanced and would hurt the middle class.
While the odds of a “grand bargain” during the lame duck session appear to be dwindling, it is not completely out of the realm of possibility. At this point, the more likely scenario is that lawmakers will agree to a “fiscal bridge” of sorts that would postpone most of the major budgetary decisions until sometime in early 2013, including how to address the impending sequestration. The scheduled budget sequester will affect the vast majority of discretionary and mandatory spending accounts in the federal budget, including most programs of direct interest to California’s counties.
Meanwhile, the prospects for a multi-year farm bill remain uncertain, though discussions continue regarding how to advance the stalled legislation. House Republican leaders do not believe they have the votes to advance a measure (HR 6083) approved by the Agriculture Committee, as there continues to be disagreement among those in the GOP caucus over the $16 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP). Cuts to crop subsidies has also been a point of contention. With a separate floor vote unlikely, congressional leaders and White House officials may opt to include the House farm bill, its Senate counterpart (S 3240), or a compromise measure in a potential year-end fiscal cliff package.
On the transportation front, there was a hearing on December 6 in the House Transportation and Infrastructure Committee entitled “Update on the High Speed Rail and Intercity Passenger Rail Program: Mistakes Made and Lessons Learned.” Transportation Secretary Ray LaHood was among those invited to testify before the committee. As expected, he reaffirmed the administration’s support for high speed rail and addressed concerns regarding the viability of the proposed California project. The hearing also featured testimony from California lawmakers Kevin McCarthy (R-CA) and Janice Hahn (D-CA). For his part, McCarthy criticized the California project as too costly and unrealistic. Hahn, on the other hand, defended the project and called on Congress to support additional transportation investments in the future.
The Government Accountability Office (GAO) also provided an update on its review of the California high speed rail project. GAO was specifically asked to study the reliability of the project’s costs and financing sources; the reasonableness of the passenger traffic and revenue estimates; and, the comprehensiveness of estimates of economic impacts, including those on adjacent landowners, associated with the project. The full report is expected to be completed by February 2013.
On the Indian affairs front, there was a recent attempt by the chairman of the Senate Indian Affairs Committee, Daniel Akaka (D-HI), to move legislation that would overturn the Supreme Court’s Carcieri v. Salazar decision. In Carcieri, the Court ruled that the secretary of the Interior’s trust land acquisition authority is limited to those tribes that were under federal jurisdiction at the time of the passage of the Indian Reorganization Act (IRA) of 1934.
Akaka’s move, which was strongly supported by the National Congress of American Indians and most tribes, was turned back after it was clear that there were not enough votes on the floor of the Senate to approve the bill. CSAC, in coordination with Senator Dianne Feinstein (D-CA), worked to oppose Akaka’s effort. The association continues to work with Senator Feinstein in an effort to ensure that meaningful reforms in the Indian fee-to-trust process are part of any Carcieri “fix” legislation.