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Weekly Legislative Update
Week of November 20, 2017
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The House and Senate are in recess this week for the Thanksgiving holiday. During the week of Nov. 27, the House will vote on the Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017 (H.R. 3017); the Minnesota's Economic Rights in the Superior National Forest Act (H.R. 3905); the Ensuring a Qualified Civil Service (EQUALS) Act of 2017 (H.R. 4182); and the Preserving Access to Manufactured Housing Act of 2017 (H.R. 1699). The Senate will consider several nominations, including Dabney Freidrich to be U.S. District Judge for the District of Columbia and Gregory Katsas to be U.S. Circuit Judge for the District of Columbia.
When the Senate returns on November 27, it will begin consideration of its version of the Tax Cuts and Jobs Act, with a final vote likely taking place on Nov. 30 or Dec. 1. The Senate version of the bill would delay lowering the corporate tax rate from 35 percent to 20 percent until Jan. 1, 2019; keep seven income tax brackets; double the exclusion from taxation estates valued up to $5.49 million for individuals and up to $10.98 million for married couples; completely eliminate all state and local tax deductions (SALT); and keep the mortgage interest deduction at the current level of $1 million, among many other changes to tax deductions and exemptions. If the Senate were to pass its bill, the next step would be a formal House-Senate conference committee where differences between the House and Senate versions of the bill would be worked out, and an identical version would then be considered again by the House and Senate. If that version passed both chambers, it would then be sent to President Trump to be signed into law.
In addition to trying to pass a final tax bill before adjourning at the end of December, Congress has several other deadlines to meet over the remaining three weeks the House and Senate are scheduled to be in session in 2017. On Dec. 8, federal government funding needs to be extended to avert a government shutdown, in addition to reauthorizing the National Flood Insurance Program (NFIP). Reauthorizing the Children's Health Insurance Program (CHIP) and raising the debt ceiling will also likely need to take place in December or January in order to avoid millions of children from losing their health insurance in dozens of states and
avoiding a federal default, respectively, beginning in early 2018. Additional legislation addressing the status of Deferred Action for Childhood Arrivals (DACA) recipients must also be addressed by March 5, 2018, otherwise hundreds of thousands of people who arrived in the U.S. as undocumented children may be deported. The Federal Aviation Administration (FAA) will need to be reauthorized prior to March 31, 2018. Lastly, bipartisan legislation stabilizing the Affordable Care Act's (ACA) Cost-Sharing Reduction (CRS) payments may be considered in order to get a tax reform bill over the finish line in 2017.
It appears that a two-week Continuing Resolution (CR) will likely be considered prior to Dec. 8, to allow Congress more time, through Dec. 22, to pass a FY 2018 omnibus appropriations bill, NFIP reauthorization, etc. Additionally, the Senate Appropriations Committee this week will release Chairman Thad Cochran's (R-MS) marks for the remaining four FY 2018 appropriations bills not yet taken up by the committee (i.e., the Interior-Environment, Financial Services-General Government, Defense, and Homeland Security bills). This action would allow House and Senate Republican and Democratic leaders to begin formal negotiations over what a FY18 omnibus will ultimately look like. In addition to passing a FY18 spending bill, top Congressional leaders are reportedly getting closer to a deal on raising the federal government's overall spending levels for the next two years by $180-$200 billion. On spending, major sticking points have yet to be resolved, including how much of that sum will have to be offset by cuts elsewhere in the budget, and how the additional funding will be divided between defense and nondefense spending. Under current law, base military spending is capped at $549 billion for FY 2018, while nonmilitary spending is capped at $516 billion.
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House Passes Tax Cuts and Jobs Act
On November 16, the House passed, by a vote of
227-205, the Tax Cuts and Jobs Act (
H.R. 1; summary available
here), with 13 House Republicans and all 192 House Democrats voting against the bill. The $1.5 trillion legislation immediately lowers the corporate tax rate from 35 percent to 20 percent; collapses seven individual income-rate brackets into four (12%, 25%, 35%, and 39.6%); repeals the federal estate tax after six years; and impacts many current tax deductions, including: (1) eliminating the deduction for state and local income and sales taxes, while capping it for property taxes at $10,000; (2) limiting the mortgage interest deduction used by homeowners to $500,000 worth of mortgage debt; (3) eliminating the student loan interest deduction; (4) eliminating the medical expense deduction, which Americans with disabilities, long-term care needs, and high dental expenses rely on to afford care; (5) eliminating a deduction for teachers who purchase supplies for their classroom; (6) eliminating the deduction for moving expenses to take a new job and taxes employer-provided moving expenses; (7) eliminating the deduction for dependent care assistance; (8) eliminating the Lifetime Learning Credit, which helps nontraditional students earn a degree; (9) eliminating the casualty loss deduction, which Americans use to offset repairs from damage from disasters; and (10) eliminating personal exemptions, which parents currently claim for themselves, their spouse, and dependents and which grows with the size of their family.
The nonpartisan Tax Policy Center (TPC)
found that H.R. 1 "would reduce taxes on average for all income groups in 2018 and 2027. The largest cuts, in dollars and as a percentage of after-tax income, would accrue to higher-income households. However, not all taxpayers would receive a tax cut under this proposal-at least 7 percent of taxpayers would pay higher taxes under the proposal in 2018 and at least 24 percent of taxpayers would pay more in 2027." The TPC also
reported that "We find the legislation would boost US economic output by 0.6 percent of gross domestic product (GDP) in 2018, 0.3 percent of GDP in 2027, and 0.2 percent of GDP in 2037. The resulting increase in taxable incomes would reduce the revenue loss created by the legislation by $169 billion from 2018 to 2027 and by $136 billion from 2028 to 2037. Including macroeconomic effects and interest costs, the legislation is projected to increase debt as a share of GDP by just over 5 percent in 2027 and by just over 9 percent in 2037."The Senate will consider its own version of the Tax Cuts and Jobs during the week of November 27. The White House issued a
Statement of Administration Policy for H.R. 1, stating that "If H.R. 1 were presented to the President, his advisors would recommend that he sign the bill into law."
Read more...
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Senate Finance Committee Passes Tax Cuts and Jobs Act
On November 16, the Senate Finance Committee
passed its own version of the Tax Cuts and Jobs Act by a party-line vote of
14-12; the description of Chairman Orrin Hatch's (R-UT) mark of the bill is available
here, the description of the Chairman's modification to the original mark of the bill is available
here; and a summary of the bill is available
here. Over the course of four days, the Committee
rejected 56 amendments offered by Democrats, while approving
one amendment offered by Chairman Hatch to provide modifications, clarifications, and additions to the Chairman's mark of the bill. The bill will now go to the Senate Budget Committee where it will be combined with an Energy and Natural Resources Committee bill and reported to the full Senate. Budget Committee action is expected on Nov. 27, after which the reconciliation bill will go to the Senate floor around Nov. 29, with a final vote on Nov. 30 or Dec. 1. The Senate needs 51 votes to pass the bill.
The Senate's tax bill contains a number of differences from the House-passed bill. The Senate bill would delay reducing the corporate tax rate to 20% until Jan. 1, 2019; maintain seven income tax brackets; allow benefits for individuals and families, like doubling the standard deduction and cutting individual tax rates, to expire in 2025 rather than be permanent; and double the exclusion for the federal estate tax rather than outright repealing it. The Senate bill would also retain the deduction for medical expenses; completely eliminate all state and local tax deductions (SALT); keep the mortgage interest deduction at the current level of $1 million; and treat "pass through" companies (i.e., sole proprietorships, partnerships, limited liability companies and S-Corporations) differently. The Senate bill also repeals the Affordable Care Act's (ACA) individual mandate requiring health insurance, a provision not included in the House-passed bill. The Senate also needs to waive the "pay-go" rules (i.e. any legislation that is not deficit neutral) and/or raise the budget caps in order to pass tax reform-which adds $1.5 trillion to the deficit. If not, the bill would trigger automatic spending cuts to Medicare and other programs.
The Joint Committee on Taxation (JCT) reported that lower-income individuals would start seeing tax increases in 2021 under the Senate bill, with i
ndividuals earning between $20,000-$30,000 paying 13.3% more as a group in taxes in 2021, and paying 25.4% more in 2027.
Those earning $75,000 and above would see tax cuts for the next decade, but the amount of the cut shrinks to less than 1% in 2027. The Congressional Budget Office (CBO) and JCT also reported that
the distributional effects of
the Senate tax bill in 2021 would include: $18 billion less spending for Medicaid; $4 billion less spending for cost-sharing reduction (CSR) payments; $1 billion less spending for the Basic Health Program (BHP); and $4 billion more spending for Medicare because of changes in payments to hospitals that serve a disproportionate share of low-income patients. Read more...
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House Passes NFIP Reauthorization and Reform Bill
On November 14, the House passed, by a vote of
237-189, the 21st Century Flood Reform Act (
H.R. 2874), with 15 House Democrats voting for the bill and 14 House Republicans voting against it.
H.R. 2874 would extend the National Flood Insurance Program (NFIP) for five years while making a number of changes to the program. Several compromises were made to improve specific provisions due to significant stakeholder criticism over the past few months. Some of the important changes agreed to include:
- Preservation of grandfathering when communities adopt new maps;
- Removal of the proposed prohibition on new coverage in the Special Flood Hazard Area;
- Reducing the new proposed minimum floor increases for pre-FIRM properties from 8% annually to 6.5% (the floor is currently 5%);
- Protections for grandfathering and changes to treatment of repetitive loss properties;
- Mitigation dollars will be prioritized for properties that have flooded, and past claims can be counted for that prioritization;
- The proposed prohibition of coverage on properties with $1 million replacement costs has been stricken; and
- The proposed opt-out of mandatory purchase requirements for commercial properties has been delayed 1 year.
The bill also provides greater private market access to the flood insurance market, allows localities to develop their own map alternatives to NFIP flood maps using better and cost-effective technology at an accelerated pace (subject to FEMA standards and approval), and expedites the implementation of policyholder monthly premium installment payments, among other things. A summary of the bill, as provided by the House Financial Services Committee, is available here. The White House issued a Statement of Administration Policy for H.R. 2874, stating that "If the substitute amendment to H.R. 2874 were presented to the President in its current form, his advisors would recommend that he sign the bill into law." The Senate Banking, Housing and Urban Affairs Committee has still not yet released its own NFIP reauthorization proposal, indicating that a temporary reauthorization extension will be necessary past Dec. 8, when the NFIP is currently set to expire. Read more...
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House and Senate Pass FY 2018 NDAA
On November 14, the House passed, by a vote of
356-70, the Conference Report for the FY 2018 National Defense Authorization Act (
H.R. 2810; summaries available
here and
here); the Senate passed the bill on Nov. 16 by voice vote.
The Conference Report authorizes approximately $634.2 billion in base budget authority ($605.5 billion for the Department of Defense (DOD), $20.6 billion for the defense-related activities of the Department of Energy (DOE), and $300 million for defense-related activities) and approximately $65.7 billion for Overseas Contingency Operations (OCO) for a total defense discretionary topline of $699.9 billion for FY 2018.
The total funding authorized in the Conference Report will exceed both the Trump Administration's request of $668 billion total in discretionary funding, and the Budget Control Act's (BCA) defense cap of $549 billion for FY 2018, resulting in $77.5 billion in base funding above the BCA caps. President Trump is expected to sign the Conference Report into law soon. Read more...
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House Passes Foundations for Evidence-Based Policymaking Act
On November 15, the House passed, by voice vote, the Foundations for Evidence-Based Policymaking Act of 2017 (
H.R. 4174), which would require federal agencies to make more data available to the public in an open, free, and unrestricted format, and
would require agencies to develop evidence-based policies and share statistical information while protecting confidentiality. The bill, sponsored by Speaker Paul Ryan (R-WI), includes a version of the Open, Public, Electronic and Necessary (OPEN) Government Data Act, which directs agencies to publish their non-sensitive data in a machine-readable format and also requires agencies to hire chief data officers. The bill also aims to codify some recommendations a White House advisory commission made about ways to use more data internally. In addition to chief data officers, it includes a provision requiring agencies to hire chief evaluation officers to oversee the assessment of internal programs.
Read more...
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Senate Passes Six Bills by Unanimous Consent
Last week, the Senate passed the following bills by Unanimous Consent:
- FEMA Accountability, Modernization and Transparency Act of 2017 (H.R. 1679): requires FEMA to modernize its grant management system and provide secure online access to applicants, and would ensure FEMA's improvement efforts include robust applicant accessibility and transparency measures;
- Protecting Young Victims from Sexual Abuse and Safe Sport Authorization Act of 2017 (S. 534): the bill requires amateur athletics governing bodies to report sex-abuse allegations immediately to local or federal law enforcement, or a child-welfare agency designated by the Justice Department;
- Criminal Antitrust Anti-Retaliation Act of 2017 (S. 807): allows employees who believe they are victims of retaliation to file complaints with the Secretary of Labor, and it provides for those employees to be reinstated to their former status if the Secretary finds in their favor;
- Veterans Apprenticeship and Labor Opportunity Reform (VALOR) Act (H.R. 3949): currently, private employers who offer apprenticeship programs in more than one state must register with each state approval agency individually. This trail of paperwork and burdensome review process often discourages employers from opening these apprenticeship programs to veterans. The VALOR Act would streamline the registration process for employers, still allow approval agencies to certify programs, and give veterans more opportunities to gain employment through apprenticeship programs.
- VA Prescription Data Accountability Act of 2017 (H.R. 1545): would clarify current law to stipulate that the Veterans Health Administration (VHA) is required to disclose information to state controlled substance monitoring programs for anyone - veteran or non-veteran - who is prescribed these medications through VA; and
- A bill to amend the Federal Food, Drug, and Cosmetic Act to authorize additional emergency uses for medical products to reduce deaths and severity of injuries caused by agents of war, and for other purposes (H.R. 4374).
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Federal Appeals Court Allows Trump Travel Ban To Partially Go Into Effect
On November 13, the 9th U.S. Circuit Court of Appeals partially granted a Trump Administration request to block, at least temporarily, a federal judge's ruling that had put the new ban on hold. Trump's ban was announced on Sept. 24 and replaced two previous versions that had been impeded by federal courts. The action means the ban will apply to people from Iran, Libya, Syria, Yemen, Somalia and Chad who do not have connections to the United States.
Those connections are defined as family relationships and "formal, documented" relationships with U.S.-based entities such as universities and resettlement agencies. Those with family relationships that would allow entry include grandparents, grandchildren, brothers-in-law, sisters-in-law, aunts, uncles, nieces, nephews and cousins of people in the United States.
The 9th Circuit is due to hear oral arguments in the case on Dec. 6. In a parallel case from Maryland, a federal judge also ruled against the Trump Administration and partially blocked the ban from going into effect.An appeal in the Maryland case is being heard on Dec. 8 by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia.
Read more...
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White House Seeks $44 Billion Disaster Aid Package From Congress
On November 17, White House Office of Management and Budget (OMB) Director Mick Mulvaney sent a
formal request to Congressional leaders, asking Congress to provide another $44 billion in emergency aid for areas hit by hurricanes this year and joined with some conservatives in suggesting spending cuts to offset some of the cost. The OMB request disappointed some lawmakers who wanted a more substantial disaster-relief bill in December. Puerto Rico called for $94 billion, Texas sought $61 billion, and the Florida Congressional delegation requested $27 billion. The OMB request includes:
- $25.2 billion for the Federal Emergency Management Agency and the Small Business Administration;
- $1 billion for agriculture assistance;
- $1.2 billion for an education recovery fund;
- $4.6 billion to repair federal property; and
- $12 billion for Community Development Block Grants.
The request also called on lawmakers to offset at least some of the bill's cost by cutting spending, suggesting "cancellation of unobligated balances that are no longer needed for the purposes for which they were appropriated, as well as for projects and activities that are not as high of a priority as responding to this year's hurricanes in a fiscally responsible manner." The combination of a slim request and a call for corresponding spending reductions rankled some lawmakers who hoped to see more funds. Read more...
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Senate Confirms 24 Trump Administration Nominees
Last week, the Senate confirmed the following six nominees by recorded vote:
- Derek Kan to be Under Secretary of Transportation for Policy, by a vote of 90-7;
- Stephen Bradbury to be General Counsel to the Department of Transportation, by a vote of 50-47;
- Mark Esper to be Secretary of the Army, by a vote of 89-6;
- David Zatezalo to be Assistant Secretary of Labor for Mine Safety and Health, by a vote of 52-46;
- Joseph Otting to be Comptroller of the Currency at the Department of the Treasury, by a vote of 54-43; and
- Donald Coggins Jr. to be U.S. District Judge for the District of South Carolina, by a vote of 96-0.
The Senate also approved, by Unanimous Consent, 18 other Trump Administration nominees:
- Brenda Burman to be Commissioner of Reclamation, Department of the Interior;
- Bobby Christine to be U.S. Attorney for the Southern District of Georgia;
- David Freed to be U.S. Attorney for the Middle District of Pennsylvania;
- Joseph Kernan to be Under Secretary of Defense for Intelligence
- Guy Roberts to be an Assistant Secretary of Defense for Nuclear, Chemical and Biological Defense Programs;
- Robert Wilkie to be Under Secretary of Defense for Personnel and Readiness;
- Robert Behler to be Director of Operational Test and Evaluation, Department of Defense;
- Thomas Modly to be Under Secretary of the Navy;
- James Geurts to be an Assistant Secretary of the Navy;
- Robert McMahon to be an Assistant Secretary of Defense, Logistics and Material Readiness;
- Shon Manasco to be an Assistant Secretary of the Air Force, Manpower and Reserve Affairs;
- James Abbott to be a Member of the Federal Labor Relations Authority for a term of five years expiring July 1, 2020;
- Colleen Kiko to be a Member of the Federal Labor Relations Authority for a term of five years expiring July 29, 2022, and, upon confirmation, designated chair;
- Ernest Dubester to be a Member of the Federal Labor Relations Authority for the remainder of a five year term expiring on July 1, 2019;
- Rebecca Gonzales to be U.S. Ambassador to Lesotho;
- Lisa Johnson to be U.S. Ambassador to Namibia;
- Irwin Goldstein to be Under Secretary of State for Public Diplomacy; and
- Sean Lawler to be Chief of Protocol, and to have the rank of Ambassador during his tenure of service.
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Trump Announces Nominees to Key Administration Positions
Last week, President Trump formally sent five nominations to the Senate for consideration, including:
- Alex Azar to be Secretary of Health and Human Services;
- Jason Klitenic to be General Counsel of the Office of the Director of National Intelligence;
- Robert Pence to be U.S. Ambassador to Finland;
- Timothy Petty to be an Assistant Secretary of the Interior for Water and Science; and
- Thomas Homan to be an Assistant Secretary of Homeland Security and Director of U.S. Immigration and Customs Enforcement (ICE).
Trump also announced his intent to nominate 11 individuals to key positions in his Administration:
- Johnny Collett to be the Assistant Secretary of Education for Special Education and Rehabilitative Services;
- John Vonglis to be Chief Financial Officer, Department of Energy;
- Melissa Burnison to be an Assistant Secretary of Energy (Congressional and Intergovernmental Affairs);
- Joseph Kelly to be U.S. Attorney for the District of Nebraska;
- Scott Murray to be U.S. Attorney for the District of New Hampshire;
- David Weiss to be U.S. Attorney for the District of Delaware;
- Billy Williams to be U.S. Attorney for the District of Oregon;
- Matthew Harris to be U.S. Marshal for the District of Utah;
- Ted Kamatchus to be U.S. Marshal for the Southern District of Iowa;
- Joseph McClain to be U.S. Marshal for the Southern District of Indiana; and
- David Weaver to be U.S. Marshal for the District of Colorado.
- Amy Barrett, a Judge of the U.S. Court of Appeals for the Seventh Circuit;
- Britt Grant, a Justice of the Supreme Court of Georgia;
- Brett Kavanaugh, a Judge of the U.S. Court of Appeals for the District of Columbia Circuit;
- Kevin Newsom, a Judge of the U.S. Court of Appeals for the Eleventh Circuit; and
- Patrick Wyrick, a Justice of the Supreme Court of Oklahoma.
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