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News and updates

Memorial Day Recess, Health Care & Tax Reform Slowly Move, Omnibus Already?

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The House and Senate are in recess to observe Memorial Day this week. Members returned to their home districts to work as efforts continue behind the scenes in DC on health care and tax reform.

Health care continues to be a big unknown in the Senate. According to the most recent impact analysis released by the Congressional Budget Office (CBO), the amendments to the AHCA do little to improve the bill. The AHCA would lead to 14 million people without insurance in 2018 and 23 million uninsured in 2025. The bill also hurts the Medicaid program, cutting $834 billion over 10 years.

The bill is now with the Senate where various Senate Republicans have indicated that any health care measure will undergo a dramatic overhaul in the coming weeks. Senate Republicans ca not ignore CBO completely — they have to pay attention to the cost estimates to make sure they comply with budget rules.

A specific timeline for the bill has not yet been set or made public. Currently, Senate staffers are drafting legislation intended to jump-start conversation when the Senate reconvenes next week.

House and Senate leaders and the White House going to try to put their heads together and cook up a single tax plan – instead of allowing each chamber to craft its own bills, like Republicans are doing now on health care and as happened with the 1986 tax revamp. However, the timeline to accomplish reform is slipping due to several factors (including the need to raise the debt ceiling much earlier than previously anticipated) and a failure to reach consensus about what provisions should actually change. All politicians hate the tax code, but there is not agreement on which provisions exactly what they hate. Voters gripe about complexity but are opposed to losing any breaks that benefit them.

Looming over tax reform is federal government’s need to raise the debt ceiling now, several months before Congress was prepared to act. At the beginning of 2017, Treasury estimated that the Department could use extraordinary measures until the Fall so that the federal government could continue to operate.

Now, senior White House officials are requesting Congress address and raise the debt ceiling prior to the August Recess. The request sets up a potentially monumental political fight. It is something that will not just be a fight between Republicans and Democrats but within each of the parties. The GOP is torn over whether to combine spending cuts with the debt ceiling lift, and Senate Democrats are already signaling they may push for their own concessions since their votes are going to be needed to avoid a devastating government default.

Rumor of the Week! House Appropriators are floating the idea of passing a 12- bill omnibus before the August Recess. Such a move would certainly accelerate the FY 2018 process, which is significantly behind this cycle due to the late completion of the FY 2017 appropriations in May. To complete such a package would put tremendous pressure on the House Appropriations committee to craft, mark up and combine all 12 bills (none of which are currently in public draft form) and would be a significant accomplishment if any of the bills were already available. FY 2018 begins October 1 and right now, lawmakers have just 12 legislative days planned when both chambers will be in session in September. Stay tuned!!

What We’re Reading, May 22-26

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Here is a selection of article the Office of Federal Relations is reading this week.

Montana Special Election – The special election to fill Montana’s U.S. House seat took a weird turn on Wednesday night when the Republican candidate, Greg Gianforte, reportedly body-slammed Guardian reporter Ben Jacobs. What effect all this will have on today’s special election is … unclear. Suffice to say that we don’t have much precedent for election-eve body-slamming. As always, we’re interested in who wins… but we’re also interested in what the Montana result tells us about the national political environment. And when we’re judging the latter, we need to look at the margin of victory, not just who wins and loses. Read more from FiveThirtyEight.

Campus Free Speech – State legislatures, most led by Republicans, are advancing bills they say are intended to support free speech. The laws include measures to suspend students who interfere with the free-speech rights of others, remove free-speech zones that limit protests to small areas on campus and cut off money to schools that don’t protect the First Amendment. In the past few months, governors have signed legislation protecting free speech on campus in Colorado, Tennessee, Utah and Virginia. Meanwhile, Republican legislators have proposed bills in Illinois, Wisconsin, Texas, California, North Carolina, Michigan, Louisiana and Georgia. Read more from the Wall Street Journal.

Trump Budget Tough for Education – President Trump’s full budget proposal for fiscal year 2018, to be released Tuesday, calls for a $9.2 billion, or 13.5 percent, spending cut to education. The cuts would be spread across K-12 and aid to higher education, according to documents released by the White House.None of this can be finalized without Congress. And the political track record for Presidents who want to reduce education funding is not promising, even in a far less poisoned atmosphere than the one that hovers over Washington right now. Read more from NPR. 

Mid-Term Elections Preview – The midterm elections are still nearly a year and a half away, and the political dynamics could yet change, but we shouldn’t ignore the fact that history and the current environment are merging together for a potentially great set of elections for Democrats in November 2018. The president’s party has lost House seats in 18 of the last 20 midterm elections, and it’s lost an average of 33 seats in those 18 elections. Democrats need to gain 24 seats in order to take back the majority. Read more on Roll Call.

Tax Overhaul Hurdles – Republican leaders are applying a lesson learned from health care to the tax overhaul debate: build consensus before releasing a bill. It’s no secret that the House, Senate and White House are not on the same page on a tax overhaul. But GOP leaders are now more openly acknowledging those divisions as they work toward a goal of a unified plan. Read more on Roll Call. 

Americans Doing Better Financially – Americans’ sense of their overall financial health improved modestly last year, but adults without any college education lost ground for the first time since 2013, according to a new Federal Reserve survey. Read more on the Wall Street Journal.

ED’s COO of Finanical Aid Quits

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Tuesday night, James Runcie, chief operating officer of the Office of Federal Student Aid, quit \over what he said were simmering management problems at the agency that culminated in a dispute with DeVos over her insistence that he testify Wednesday before a congressional oversight panel.

Politico has the story. 

Appeals Court Upholds Block on Administration Travel Ban

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The Fourth Circuit Court of Appeals has upheld the block on the second version of the Administration travel ban. A federal judge in Maryland originally blocked the ban from going into effect earlier this year. The Fourth Circuit covers the following states: Maryland, North Carolina, South Carolina, Virginia, and West Virginia.

The Ninth Circuit Court of Appeals has yet to rule on a similar block issued by a judge in Hawaii.

Administration’s FY2018 Budget Would Restrict F&A, Contains Salary Cap

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Two provisions of note in the President’s Budget released Tuesday:

Within the NIH section of the Major Savings and Reforms provision, the Budget includes an indirect cost rate for NIH grants that will be capped at 10 percent of total research. This approach would be applied to all types of grants with a rate higher than 10 percent currently and will achieve significant savings in 2018. It would also bring NIH’s reimbursement rate for indirect costs more in line with the reimbursement rate used by private foundations, such as the Gates Foundation, for biomedical research conducted at U.S. universities. In addition, the Budget proposes that NIH will streamline select Federal research requirements for grantees through targeted approaches. In tandem, the Budget supports burden reduction measures that will further reduce grant award recipient costs associated with research.

In the Budget’s Appendix document (on page 480 under general provisions), Section 202 proposes to lower the NIH allowable salary cap from the current Executive level II (2) to Executive level V (5). If the this recommendation is enacted, the cap will drop to $151,700, which is a 21% cut in currently supported salary levels.