Congress Requests Information on Implementation of the Sequester

Posted on June 26, 2012October 17, 2012

Today, the House Budget Committee mark up Republican leaders’ legislation, similar to bipartisan language added last week to the Senate farm bill that seeks more information about the automatic budget cuts. The action comes after several attempts by lawmakers to get more details from the administration about how the roughly $109 billion sequester will take effect in January. The House bill (HR 5872) and its Senate companion measure (S 3228), introduced by Republican leaders in both chambers in May, would require the president to submit a detailed report on sequestration, identifying each account that would be affected and the amount by which it would be reduced. As introduced, the report would be due on July 9th, which is several weeks earlier than deadlines set by the Senate in the farm bill. Moreover, the Senate proposal is far more detailed, requiring a report from the president that would include a list of accounts that would be affected, an analysis of the impact of the cuts to key areas of government as well as the private sector within 60 days, and a Pentagon review by August 15th on the impacts of the cuts to national defense.

As you will recall, the across-the-board cuts, or sequester, was a consequence of the failed Joint Deficit Reduction Committee that was laid out in the Budget Control Act last August. To date, there has been very little information released by the administration on how the sequester will be implemented.

Very Big Week in Congress

Posted on June 25, 2012October 17, 2012

Today begins a very big week in Congress that could have huge consequences for the remainder of the calendar year. First, the Supreme Court is expected to hand down its decision on the Affordable Care Act (ACA), a ruling that will likely dominate the airwaves this week. Second, Congress must deal with two critical legislative issues this week before the June 30^th deadlines: student loan interest rates and highway funding. If Congress does not take action by June 30^th, interest rates on federal student loans will increase from 3.4 percent to 6.8 percent. Congress also faces a deadline to reauthorize highway and transit funding, or they must enact another extension for those programs to continue (this would be the 10^th extension so far). Finally, the House is expected to vote to hold US Attorney General Eric Holder in contempt of Congress this week for failing to disclose internal Justice Department documents on how federal officials allowed guns to fall into the hands of Mexican drug cartels (the “Fast and Furious” scandal for those of you following this closely).

Both the House and Senate are in session this week and will go into recess next week for the Fourth of July holiday.

Appropriations: The House Appropriations Committee approved three more FY 2013 spending bills last week—Agriculture, Financial Services, and Transportation-HUD—and held a subcommittee markup of its FY 2013 Interior-Environment spending bill, which funds the Environmental Protection Agency (EPA) and the US Geological Survey (USGS). The House Appropriations Committee held a subcommittee markup of the FY 2013 Interior-Environment Appropriations, which would provide $7 billion for the EPA, $1.4 billion (17%) below the FY 2012 enacted level and similar to the agency’s funding level in FY 1998. The bill also provides $967 million for the USGS, $101 million below the FY 2012 enacted level.

The full House has approved six of their FY 2013 spending bills. The full Senate, on the other hand, has yet to take up a FY 2013 spending bill and the appropriations committee has slowed its work after moving nine of its 12 bills through the process. The Senate is not expected to take up any before next week’s Fourth of July recess.

The Supreme Court’s ruling on the ACA this week will certainly have an impact on Congress’ ongoing appropriations and budget debates. House appropriators have just one remaining measure to be unveiled — the Labor-HHS-Education bill. House leaders will almost certainly continue their attempts to “defund” the ACA when and if this measure comes up. Senate Democratic appropriators recently moved forward with their version of the FY 2013 Labor-HHS-Education bill that kept the funds intact.

Senate Bill Requires Reports on Impact of Sequestration

Posted on June 22, 2012October 17, 2012

Yesterday, the Senate passed a five-year reauthorization of farm legislation (S 3240) that includes a bipartisan amendment requiring detailed reports on the effects of the pending budget sequestration on both defense and nondefense discretionary spending. The amendment would require three reports: one from the Office of Management and Budget (OMB) on the overall budget figures under sequestration; one from the Pentagon on the impact on defense spending; and one from the President explaining how he would implement a sequester and what the effects would be across the board, including impacts to nondefense spending.

Senators Patty Murray (D-WA) and John McCain (R-AZ) lead the effort to get this language included in the farm bill. The Pentagon report would be due August 15, the OMB report would be due within 30 days of enactment of the farm bill, and the President would be required to issue his report within 60 days of enactment.

Odds and Ends for the Week

Posted on June 22, 2012October 17, 2012

Student Loan Interest Rates: Majority Leader Harry Reid and Minority Leader Mitch McConnell are getting close to a deal to prevent student loan rates from doubling on July 1^st, from 3.4 percent up to 6.8 percent. A deal could be announced as soon as today, although early next week seems more likely. The talks have centered on how to pay the roughly $6 billion it will cost to keep the interest rate on federal Stafford loans at 3.4 percent. Unless Congress intervenes, rates would increase to 6.8 percent starting July 1^st. The list of options Reid and McConnell are considering include one favored by Reid that would tweak pension payment contributions by employers and increase premiums paid by businesses for Pension Benefit Guaranty Corp. coverage. The House will evaluate the proposal once the Senate reaches a deal, but they will not yet confirm support for Reid’s proposed pay-for.

Highway and Transit Programs: Transportation bill conferees are getting closer to a deal on legislation to reauthorize federal highway and transit programs. Congressional staff are expected to work through the weekend to try and hammer out a final agreement. When that is completed, some conferees will get back together on Tuesday when the House returns from a long weekend away. Lawmakers are racing against the clock as the current extension expires on June 30^th, the same day that Congress is expected to recess for the Fourth of July week. It is expected that staff is also drafting a 6-month extension measure in case Congressional members cannot reach agreement on the larger reauthorization bill.

End-of-Year “Fiscal Cliff”: The cuts through sequestration are just one of a number of high-profile fiscal issues that Congress will need to address after the November election. The Bush tax rates are set to expire at the end of the year, and it’s likely that Congress will have to raise the debt ceiling again. This is the same issue that faced Congress last August that put the Budget Control Act and sequestration in place. Both Democrats and Republicans have said publicly that they want to avert the across-the-board sequestration cuts, which would hit roughly $500 billion each to defense and non-defense discretionary spending over the next decade. But the two sides have been unable to reach a deal about how to find alternative deficit reduction to replace the cuts, as Republicans are opposed to raising taxes and Democrats are hesitant to cut entitlement spending.

Energy Production Legislation Debated

Posted on June 21, 2012October 17, 2012

This morning the House will continue debate on the Strategic Energy Production Act of 2012 (HR 4480), which seeks to increase domestic oil and gas production and reduce regulation of the energy industry in order to reduce energy prices and boost economic growth. This measure is the result of compiling the text of 7 separate bills – two reported by the Energy and Commerce Committee and five reported by the Natural Resources Committee. The new comprehensive bill would delay implementation of certain EPA air quality and fuels regulations, and create an interagency committee to review the impact of EPA rules and regulations on energy prices and the broader economy. It also changes the management of the Strategic Petroleum Reserve (SPR) to require additional oil and gas leasing on federal public lands and waters commensurate with a release of the Reserve’s oil.

More specifically, the bill requires the Interior Department to develop a strategic plan for the nation’s energy needs over 30 years and set domestic production goals to meet demand; increases the amount of federal land available for energy production and streamlines the process for approving drilling permits; and sets new standards for judicial review of civil actions filed against energy lease sales or drilling permits.

Several amendments will be considered today, with a final vote predicted for this afternoon.