This Week on the Hill
The House and Senate are in session this week, as both chambers continue to work until the seven-week recess in July and August.
The House convenes today and will consider seven bills under suspension of the rules, including the Freedom of Information Act (FOIA) Improvement Act (S. 337) and the Strategy to Oppose Organ Trafficking Act (H.R. 3694). For Tuesday and the balance of the week, the House is scheduled to consider H.R. 5053, the Preventing Abuse and Protecting Free Speech Act, related to the Internal Revenue Service requiring tax-exempt organizations to submit information on major contributions made to the organization and H.R. 5293, the fiscal year 2017 Defense appropriations bill. Several committees have scheduled action for the week: the Energy and Commerce Committee will hold a hearing Tuesday on antibiotic resistant superbugs and will hold a markup on Wednesday of H.R. 2646, the “Helping Families in Mental Health Crisis Act”; and the Natural Resources Committee will hold a hearing Tuesday on H.R. 5259 related to certainty for states and tribes.
The Senate also convenes today and will return to consideration of S. 2943, the National Defense Authorization Act for Fiscal Year 2017; final votes for passage are expected on Tuesday. For the balance of the week, the Senate is expected to consider the Commerce-Justice-Science appropriations bill for fiscal year 2017. Several committees have scheduled action for the week: the Energy and Natural Resources Committee will hold a hearing Tuesday on oil and gas pipeline infrastructure; the Finance Committee will hold a hearing Tuesday on energy tax policy; and the Health, Education, Labor and Pensions Committee will hold a hearing Wednesday on implementing the Child Care Development Block Grant Act of 2014.
Fiscal Year 2017 Budget Update
Last week the House took action on three different fiscal year 2017 spending bills. The full House approved the $3.5 billion Legislative Branch spending measure (H.R. 5325) by a vote of 233-175. Excluding Senate-only items, the bill is $73 million above the fiscal year 2016 enacted amount and $152 million below the President’s request. However, there has been a 14 percent decrease in topline funding since fiscal year 2010. The House Appropriations Committee approved the $21.7 billion Financial Services spending measure by a vote of 30-17. The bill decreases spending by $1.5 billion compared to the fiscal year 2016 enacted amount, with most of the cuts being allocated to the Internal Revenue Service (reduction of $236 million) and General Services Administration. The measure also denies funding to the Consumer Financial Protection Bureau to implement the recently proposed payday lending rule. The House Appropriations Subcommittee for Homeland Security approved its spending measure on Thursday, allocating $41.1 billion. This measure is $432 million above the President’s request and $100 million above the fiscal year 2016 enacted amount. The bill allocates $11.2 billion to Customs and Border Protection, $5.9 billion to Immigration and Customs Enforcement, $7.6 billion to the Transportation Security Administration, and $10.3 billion to the Coast Guard. For the Federal Emergency Management Agency (FEMA), the bill funds FEMA’s preparedness grants at $2.6 billion (same as fiscal year 2016), including $1.3 billion for state and local grants and $350 million for Emergency Management Performance Grants.
Last week the Senate approved the Labor-Health and Human Services (HHS)-Education spending measure in both the appropriations subcommittee and full committee. The bill provides $161.9 billion in discretionary funding, a decrease of $270 million from the current year. The bill also provides a $2 billion increase to the National Institutes of Health, while providing $76.9 billion to the Department of Health and Human Services, $67.8 billion to the Department of Education and $12.04 billion to the Department of Labor. Education highlights include: increases funds for Title I grants for schools with a large share of low-income students; provides funds to support state officials developing state education plans under the Every Student Succeeds Act; and restores year-round Pell grants while increasing the maximum Pell grant from $5,815 to $5,935. Summaries of the Labor-HHS-Education bill can be found here and here.
This week the House and Senate both have appropriations bills scheduled for action. The House will consider the $517.1 billion Defense spending bill (H.R. 5293) on the floor, while the Appropriations Committee will consider the Homeland Security measure on Tuesday and the Interior-Environment measure on Wednesday. The Senate may consider the $56.3 billion Commerce-Justice-Science bill (S. 2837) on the floor this week, while the subcommittees will markup the Interior-Environment bill (Tuesday) and Financial Services bill (Wednesday), with a full Appropriations Committee markup scheduled on Thursday for both bills.
Toxic Chemical Reform Bill Passes Both Chambers, Advances to President
Last week the Senate passed by voice vote a bill (H.R. 2576) reforming the Toxic Substances Control Act (TSCA). The bill is intended to streamline the process by which the Environmental Protection Agency (EPA) reviews chemicals before approval for use; currently, the EPA must prove that a chemical poses a potential risk before it can request data or require testing and that substance can automatically enter the marketplace after 90 days. The current process has resulted in the agency issuing regulations to control just five chemicals. Under the new legislation, the EPA can order companies to test their new products. Although the bill creates a more uniform regulatory system for the chemicals and increases preemption of state laws, states would be allowed to seek a federal waiver to impose their rules on a specific chemical and can continue to work on regulations for 10 high-priority chemicals in the absence of final federal action. The House had previously approved the bill and the President is expected to sign it into law.
House Passes Puerto Rico Debt Bill
The House approved a bill to help resolve Puerto Rico’s debt crisis by a vote of 297-127 on Thursday and the bill now advances to the Senate, where the bill has not yet been scheduled for a vote. On July 1, the island is expected to default on a $2 billion debt payment, which includes $800 million in general obligation debt. The bill (H.R. 5278) clarifies a process for Puerto Rico to restructure its over $70 billion in debt and establishes a federal oversight board; the seven-member board has the authority to enforce balanced budgets and government reform if Puerto Rico fails to do so, and can force the sale of government assets and establish efficiencies through agency consolidations. The administration issued a Statement of Administration Policy supporting the bill. Additional information on the bill, including a summary, can be found here.
House and Senate Go to Conference on Zika Funding
On Wednesday the Senate voted to go to conference with the House on a Zika virus response package; the House had voted for a conference in May. The House previously approved $622.1 million in Zika response funds with offsets (H.R. 5243), and the funding would expire at the end of this fiscal year. The Senate previously approved $1.1 billion in emergency spending (with no offsets) that has no expiration date for the funding and attached it to a fiscal year 2017 appropriations bill (H.R. 2577). These differences must be worked out in the conference before a measure can advance to the President, who had requested $1.9 billion in emergency spending back in February. Without the emergency funding, the administration repurposed almost $600 million in existing funds to address Zika prevention and testing.
Proposed Rule Focuses on Revenue Lost from Tax Breaks
The Federal Accounting Standards Advisory Board (FASAB) recently proposed a new federal accounting standard that would require the federal government in financial reports to include information on budgetary impacts from tax breaks (called tax expenditures in the FASAB draft). According to the Treasury Department, the state and local income and property tax deduction cost the federal government $84 billion in lost revenue this year, while the state and local government tax exemption for municipal bonds cost $32 billion. According to the FASAB draft standard, the Board “identified a need to improve users’ awareness and understanding of tax expenditures. By requiring disclosures, the Board will provide a mechanism and framework for achieving this objective.” Responses to the draft accounting standard are due by September 15.
Labor Announces $100 Million Job Training Grant
Last week the U.S. Department of Labor announced $100 million in available funding under the America’s Promise Job-Driven Grants program, intended to develop and grow regional partnerships between workforce agencies and employers. The grants will support tuition-free education and training that prepares participants for jobs in middle to high-skilled occupations and industries. The department expects to award 20 to 40 grants of $1 million to $6 million, with awards going to regional partnerships that must include the public workforce system, an economic development agency, at least one education and training provider and at least five employers or a regional industry association. Applications are due August 25 and the grant notice can be found here.
Resolution Introduced to Block Overtime Rule
Several Republican Senators introduced a Congressional Review Act resolution (S.J. Res. 34) last week to overturn the administration’s recently finalized overtime rule. The rule would make an additional 4.2 million workers eligible for overtime pay by raising the salary limit for qualified workers from $23,660 to $47,476. If the resolution were to be enacted, the rule would be void and the Department of Labor would be prevented from writing a similar rule without congressional approval. Unlike other types of legislation, a Congressional Review Act resolution needs a simple majority in both houses to pass (most legislation in the Senate requires 60 votes to pass). However, it is expected that if such a resolution were to reach the President, it would be vetoed. Information on the overtime rule can be found here and webinar recordings can be found here.
Pipeline Safety Reauthorization Advances to Senate After House Passage
Last week the House passed a bill (S. 2276) to reauthorize pipeline safety programs for four years, authorize $720 million for Pipeline and Hazardous Materials Safety Administration (PHMSA) programs through fiscal year 2019, and allow the agency to issue emergency orders that places restrictions on pipelines. The legislation also requires PHMSA to set minimum safety standards for underground natural gas storage facilities (while allowing states to go above those standards for intrastate facilities), funded through a user fee on pipeline operators. If a state authority is not maintaining a satisfactory effort to carry out a safety program, the bill gives the Department of Transportation authority to withhold any part of a payment under a state pipeline safety grant. Additional information on the bill can be found here. The Senate passed its version in March and is expected to consider the House bill shortly.
Recently Released Reports
Civil Rights Data Collection for the 2013-14 School Year, U.S. Department of Education
Legislative Options for Financing Water Infrastructure, Congressional Research Service
The Distribution of Household Income and Federal Taxes, 2013, Congressional Budget Office
Trends in SNAP Participation Rates: Fiscal Years 2010-2014, U.S. Department of Agriculture
Report on the Commission on Retirement Security and Personal Savings, Bipartisan Policy Center
Economic News
Job Openings Increase to 5.8 Million in April
The number of job openings was little changed at 5.78 million on the last business day of April, according to data recently released by the U.S. Department of Labor (compared to 5.67 million openings in March). Job openings increased in April for wholesale trade (+65,000), durable goods manufacturing (+46,000) and real estate and rental/leasing (+41,000) while decreases were seen in professional and business services
(-274,000), construction (-15,000) and leisure and hospitality (-18,000). The number of hires decreased to 5.1 million in April and the hires rate was 3.5 percent. The number of separations was little changed in April at 5.0 million. The 2.9 million quits reported in April were down 36,000 from March; many economists closely watch the number of quits as a measure of employee confidence in finding another job. Finally, layoffs and discharges were down in April at 1.6 million, compared to 1.7 million in March. Over the 12 months ending in April 2016, hires totaled 62.4 million and separations totaled 59.7 million, yielding a net employment gain of 2.7 million.