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This has been a hard week on Congress and the rest of the Country struggling to grasp the magnitude of the mass shooting in Las Vegas, Sunday night, and the motivation of the killer. Debate, shifted from the GOP tax reform package release last week, to gun control legislation. Representative Carlos Curbelo (R-Fla) is looking at introducing a legislative package to ban Bump Stocks, a tool to convert semi-automatic weapons to fully automatic. Speaker Ryan, has spoken this week on the issue, and implies the party is looking also at a regulatory rather than legislative fix to the use of Bump Stocks. The fact either path, is being debated by the GOP is a departure from past positions on gun control, but reflects that the shooting in Las Vegas has a big impact on country and what can be done to prevent future misuse of illegal weapons.
Meanwhile, the GOP is pushing tax reform, and the advantages to both large businesses and individuals. After, the failure to pass health care reform, to free up revenue for Tax Reform, now the debate is on whether Tax Reform will increase the deficit by reducing tax rates. If Republicans do aim for a deficit-neutral plan, it would make it much more difficult to advance a package that relies on the theory that short-term deficits can lead to long-term economic growth.
Instead, the GOP would be forced to find ways to pay for the tax cuts, inevitably creating a “winners and losers” situation in which some income brackets would see a reduction in their taxes, while others may see an increase. Removing the state and local tax deduction, for example, has become a huge point of debate within the party because some states, like Pennsylvania and New York, might be more adversely impacted than others where the state and local taxes are not as high.
For this update, we will report on the tax reform plan, where the budget stands, and how Indian country may be impacted.
We want to wish everyone a very happy and prosperous new year, and hope to see you again in 2016 at conferences or here in Washington. The Congress has been very busy at the end of this year and proud of the fact it accomplished the passage of major highway and education bills that had lingered on the congressional agenda for months, and also approved a tax break and spending package, avoiding a government shutdown. Appears that Congress is working again. As Speaker Ryan recently was quoted. “We passed more major legislation in a few weeks than we have in a few years.” See my other recent blog post for details of the recent legislation that broke the congressional deadlock.
- For the Indian Health Service (IHS), the omnibus provides a total appropriation of $4.8 billion, a 3.6% increase over FY 2015 levels. This includes flat funding at $914 million for Purchased/Referred Care (formerly Contract Health Services) and $523 for Facilities, a $63 million increase. It also provides an additional $10 million to alcohol and substance abuse for a focus on Tribal youth, and an increase of $12.9 million for staffing.
- The Bureau of Indian Affairs (BIA) is funded at a total of $2.8 billion, a 7.5% increase over FY 2015 enacted. This includes $2.26 billion for the Operation of Indian Programs, a $161 million reduction compared to FY 2015, as well as $852 million for the Bureau of Indian Education. Notably, the bill also contains $138 million for school construction, an increase of $63.7 million, which should complete the 2004 replacement school construction list.
- For Contract Support Costs (CSC) at both BIA and IHS, the omnibus creates an indefinite appropriation using the language, “such sums as may be necessary,” rather than specific amounts. Tribes and Tribal organizations advocated for the CSC line item to be made mandatory on a permanent, indefinite basis in order to stabilize funding, protect funding appropriated to other line items, and help to avoid funding shortfalls. Though the omnibus does not make CSC mandatory, providing for an indefinite appropriation will allow the agencies to pay CSC in full, as required by the Supreme Court decision in Salazar v. Ramah Navajo Chapter, as well as protect other line items in the budget and avoid shortfalls.
- In addition to the omnibus, Congress also passed a $680 million package to extend a number of critical tax provisions that have been expired since the end of 2014. Each of these tax credits is designed to encourage increased investment in projects within Indian Country, as well as increased jobs for Native people and indicate that greater tax reform is around the corner. These include:
the Interior Improvement Act
- Should money be found through user taxes like the gas tax or by taxing the number of miles driven?
- Can long term funding be found by bringing home billions of dollars in taxable income that corporations have stashed off shore?
- Should there be a turn away from a transportation only funding source such as a gas tax and instead toward using income and other taxes?
- Should money to pay for transit systems come from revenue collected mostly from drivers who pay taxes? Should tax collected from the same fee user fees be spent on bike and pedestrian needs?
- Tribal Transportation Program funding is increased each year.
- $465 million in FY 2016 and $10 million per year increases to $505 million in FY 2020 (Sec. 1101(a)(3).
- The USDOT tribal self-governance program is a new provision (Sec. 1121), there will be a negotiated rule-making for this new program.
- The Tribal Transit program is increased from $30 million to $35 million per year (with $30 million for the formula component of the Tribal Transit Program and $5 million for the discretionary competitive transit grant program under section 5311(c)(1) of title 49 (Sec. 3007(a)(1)(A) and (B) and 3016).
- A new $100 million per year grant program is established for “nationally significant” Federal Lands and tribal transportation projects (Sec. 1123).
- The Project Management and Oversight (PM&O) “takedown” for the BIA and FHWA is reduced from 6% to 5% (Sec. 1118).
- The Tribal Transportation Bridge Program takedown is increased from 2% to 3% (Sec. 1118).
- Provides tribal data collection reporting regarding the expenditure of Tribal Transportation Program funds under Section 202 of title 23 to the Secretary of the Interior (Sec. 1117(a)).
- Directs the Secretary of the Department of Transportation to report to Congress, after consulting with the Secretary of the Interior, the Secretary of DHHS, the Attorney General and Indian tribes, describing the quality of transportation safety data collected by States, counties, and tribes for transportation safety systems to improve the collection and sharing of data regarding crashes on Indian reservations (Sec. 1117(b)).
- Requires the Secretary of Transportation, after consultation with the Secretary of the Interior, the AG, States and Indian tribes, to provide a report to Congress within two years of enactment of the FAST Act that identifies and evaluates options to improve safety on public roads on Indian reservations (Sec. 1117(c)).
The Big Lagoon Rancheria had a major victory this month after an en banc decision granted Big Lagoon the authority to pursue the construction of a casino on tribal land in trust. In 1994, the United States accepted into trust an 11-acre parcel of land on which the Tribe sought to build a casino. The Indian Gaming Regulation Act (IGRA) allows tribes to operate class III gaming only after entering into a tribal gaming compact with the state. When negotiations stalled, Big Lagoon brought suit against California, and in 2007 the district court ordered the parties to come to an agreement after finding that the state had not negotiated in good faith.
California appealed, and pursuant to the Supreme Court’s decision in Carcieri (2009), the Ninth Circuit found that because Big Lagoon was not federally recognized in 1934, the Bureau of Indian Affairs (BIA) lacked authority under the Indian Reorganization Act (IRA) to accept land into trust for Big Lagoon. The three-judge panel concluded that since the 11-acre parcel was not tribal land, Big Lagoon lacked standing to compel California to negotiate.
However, the Ninth Circuit’s recent en banc panel vacated the previous decision and reinstated the district court’s holding that state violated IGRA by failing to negotiate in good faith. If California had wanted to contest the original acceptance of the parcel, the state would have had to do so under the Administrative Procedure Act within the six-year statute of limitations. The en banc panel’s ruling helps restore some certainty to tribes recognized after 1934 by preventing collateral attacks on tribal land in trust beyond the statute of limitations.
With Republicans winning control of the Senate in the November election, all the committees will get new leaders, though all have been around for years.
The heads of the 13 major committees and Veterans’ Affairs are some of the most senior members of the Senate. Three are octogenarians and four are in their late 70s. Only one new leader will be a woman; Alaska Sen. Lisa Murkowski is in line to take over the Energy and Natural Resources Committee.
A look at the powerful senators and their issues:
Kansas’ Pat Roberts, 78, will consider renewal of child nutrition programs that have been pushed by the White House and expire next year. Roberts has criticized efforts to make school lunches healthier, calling for studies on the costs of the program and economic impact on schools.
Roberts has been a recent dissenter on the normally bipartisan panel, voting against the five-year farm bill that Congress passed in May. Roberts supported the bill’s boost in crop insurance for farmers but said other subsidies needed more changes. He called the entire bill “a look in the rear-view mirror.”
Like his Republican counterparts in the House, Roberts has championed cutting back spending for food stamps, saying the farm bill’s estimated cut of $8 billion over 10 years was insufficient.
Roberts held the gavel of the House Agriculture Committee 20 years ago and during his tenure he helped write the 1996 farm bill.
The gavel of the powerful panel responsible for drafting approximately one-third of the federal budget will return to Mississippi’s Thad Cochran, who turned 77 in December and was just re-elected to a seventh term.
Cochran was in charge during the last two years of the previous GOP majority and was a driving force behind more than $100 billion in funding to help Gulf Coast states recover from Hurricane Katrina. He was also a big practitioner of earmarks, those home-state goodies such as highway projects, economic development grants and university research dollars.
GOP leaders have banned earmarking, but Cochran is sure to back Navy shipbuilding efforts. Ingalls Shipbuilding in Pascagoula, which makes a variety of Navy ships such as modern destroyers, is Mississippi’s largest private employer.
Republicans are expected to use the 12 spending bills to challenge Obama on policy issues, such as health care, financial services, immigration and the environment.
Leading the committee has been a long-sought goal for 78-year-old John McCain of Arizona, the former Navy pilot, Vietnam prisoner of war and two-time presidential candidate who lost to Obama in 2008.
McCain, who has hinted he might seek a sixth term in 2016, stands as one of Obama’s fiercest critics on national security, casting the administration as weak and ineffective in countering threats overseas. He has repeatedly called for arming and training moderate Syrian rebels and favors more U.S. forces in Iraq to battle Islamic State militants.
McCain has been critical of Pentagon contracting. Increased examination of defense manufacturers and acquisition policy is certain. The Pentagon can largely forget about scrapping the A-10 Warthog aircraft, which McCain heavily favors, and can expect close scrutiny of the costly F-35 fighter jet.
BANKING, HOUSING AND URBAN AFFAIRS
The wily Richard Shelby, 80, makes a return tour as head of the committee. High on his agenda will be changes to the financial overhaul law enacted in response to the 2008 crisis, known as Dodd-Frank. The 2010 law that brought stricter regulation of banks and Wall Street has been a burr in the side of Republican lawmakers, and the GOP-controlled House has passed numerous bills to unwind it.
Sen. Mitch McConnell, R-Ky., the next majority leader, put it plainly at his day-after-the-election news conference: “The Banking Committee is certainly going to look at Dodd-Frank.” The big banks, he said, “are doing just fine under Dodd-Frank. The community bankers are struggling.”
Besides bank rules, the committee under the Alabama senator also may focus on curbing the authority of the Consumer Protection Financial Bureau over auto lenders and credit card companies. The bureau was created by the financial law.
Also likely to get committee attention is legislation to reshape the housing finance system and wind down mortgage giants Fannie Mae and Freddie Mac.
Shelby succeeded as head of the panel from 2003 to 2007 in blocking bank regulation proposals.
In a surprise, Wyoming’s Mike Enzi will become chairman of the Senate Budget Committee after Jeff Sessions of Alabama stepped aside. Sessions had been the top Republican on the committee the past four years.
Enzi, 70, said he will work to craft a budget “that cuts spending, targets executive overreach and reduces the size of government.”
He will be called upon to craft a budget framework that could serve as a template for follow-up legislation to repeal Obama’s health care law and, perhaps, tackle expensive benefit programs such as Medicaid and food stamps.
COMMERCE, SCIENCE AND TRANSPORTATION
South Dakota’s John Thune, 53, faces a heavy workload — reauthorization of the Federal Aviation Administration and Amtrak, net neutrality and transportation.
The committee will have to address the auto safety portions of the highway bill in the aftermath of General Motors faulty ignition switch recalls, now linked to more than two dozen deaths, and the Takata air bag recalls, also linked to several deaths. Proposals to toughen federal oversight of the auto industry are likely. Some lawmakers have called for eliminating the $35 million cap on how much the government can fine automakers in such cases.
ENERGY AND NATURAL RESOURCES
An energy policy expert from an energy-producing state, the 57-year-old Murkowski wants to unlock as much of America’s energy as safely possible.
Murkowski has argued for opening up the Arctic National Wildlife Refuge for drilling, as well as Alaska’s offshore, and has opposed regulations that block energy production. She believes EPA regulations to curb coal-fired power plant pollution to deal with global warming will threaten the reliability and raise the costs of electricity.
She supports exporting U.S. natural gas and has led the charge on pressuring the administration to lift restrictions on exports of crude oil. She has backed the immediate approval of the Keystone XL oil pipeline, which McConnell has said will be first on the new agenda.
Murkowski, unlike others in the GOP, believes global warming is happening and that Alaskans are already experiencing the effects of rising water temperatures and thinning ice.
ENVIRONMENT AND PUBLIC WORKS
The likely ascent of Oklahoma’s James Inhofe, 79, represents one of the biggest sea changes on a Senate committee with Republicans in charge.
Inhofe, one of Congress’ most vocal deniers of the scientific consensus of climate change, wrote in a 2012 book that global warming was “a hoax.” He will replace Californian Barbara Boxer, who introduced climate change legislation in 2009 and was an ally of the environmental community and Obama.
Inhofe, by contrast, is a thorn in the side of the Environmental Protection Agency and has argued that more regulation will kill the economy and jobs. Inhofe has called on the EPA to abandon stricter rules on refinery air pollution and to reject their own scientists’ recommendation to tighten a standard for the main ingredient in smog. Inhofe is likely to boost oversight of the agency and try to thwart its agenda at a time when Obama wants to shore up his climate legacy.
The 2010 health care law is in the GOP’s crosshairs, and Utah’s Orrin Hatch, 80, is likely to use his position to take the first step at chipping away at it.
Hatch has called the law’s tax on medical devices “stupid” and is determined to roll it back. He is likely to gain some Democratic support for the effort.
Hatch could be a free-trade ally for Obama if the president pushes more trade agreements.
Overhauling the nation’s complicated tax laws also is a priority for Hatch. But it’s a heavy lift.
Administration officials say Obama will offer new specifics in the coming year on how he would like to reshape corporate taxes, which now feature the highest rate in the industrialized world. But bridging the divide between Republicans and Democrats on major tax legislation would require a level of bipartisanship that has largely been absent during Obama’s first six years as president.
Hatch has worked with Democrats in the past; his friendship with the late Sen. Edward Kennedy of Massachusetts is legendary. Hatch will need to work with Democrats again if he is to advance an overhaul of the tax code.
Tennessee’s Bob Corker, 62, has criticized Obama’s foreign policy as tepid in dealing with Russia, Libya and Syria. Like several other Republicans on the committee, Corker has deep reservations about the administration’s negotiations with Iran over its nuclear program. Some Republicans have said the GOP will push new penalties this month that target Tehran.
Secretary of State John Kerry has asked Congress for new war powers in the fight against the Islamic State group. Corker has raised the possibility that he could work with the administration on the issue.
Obama’s ambassadorial picks and other nominees would face a rough outing before the committee.
HEALTH, EDUCATION, LABOR AND PENSIONS
Tennessee’s Lamar Alexander, 74, is a former education secretary under President George H.W. Bush, governor and president of the University of Tennessee.
A lawyer by trade, he helped form a corporate childcare company in the private sector. Alexander said he wants to fix President George W. Bush’s No Child Left Behind education law that’s been due to be renewed since 2007 and update the Higher Education Act.
He’s called the health care law a “historic mistake” and supports repealing it. He’s also said modernizing the National Institutes of Health and Food and Drug Administration is a necessity, and he is seeking to examine the FDA’s process for drug and device review. On workers’ issues, he’s sought to turn the National Labor Relations Board into what he says is more of an umpire role.
A farmer, not an attorney, Iowa’s Charles Grassley, 81, has been on the Judiciary Committee since his 1980 election to the Senate. But this will be his first stint as its chairman.
In that post, many expect him to continue his long-running interest in protecting whistle-blowers who reveal details of alleged fraud by government contractors and others. He’s also expected to continue oversight of programs like the Justice Department’s bungled “Fast and Furious” operation, under which federal agents lost control of guns they were tracing to Mexican drug lords. Many also expect him to work on legislation easing federal regulations on businesses.
Grassley opposed last year’s Senate-approved bipartisan immigration bill, arguing that it needed to do more to secure the country’s borders before granting legal status to people in the U.S. illegally. He’s also pressed for more information about the National Security Agency’s ability to gather information on Americans, though he’s cautioned that the agency must be able to protect national security.
A decade ago, Grassley spent time as chairman of the Senate Finance Committee and played a role in winning approval of President George W. Bush’s 2001 tax cuts and the 2003 addition of prescription drug benefits to Medicare.
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
Wisconsin’s Ron Johnson, 59, has been a tough questioner of administration officials about the deadly 2012 attack on the U.S. diplomatic outpost in Benghazi, Libya. The question will be whether the panel’s Permanent Subcommittee on Investigation opens another Benghazi inquiry in Congress as well as other reviews of the Democratic administration.
Under the leadership of Delaware Democrat Tom Carper, the committee focused primarily on the internal workings of the sprawling Homeland Security Department, including low morale ratings from rank-and-file employees and contracting issues.
Johnson has focused on those rankings in the past and led an investigation of complaints from whistle-blowers about the department’s former acting inspector general. His report, co-authored with Missouri Democrat Claire McCaskill, prompted DHS Secretary Jeh Johnson to suspend the former top internal investigator.
While the committee has addressed immigration issues in the past, senators on this panel have not taken as prominent a role as their counterparts on the Senate Judiciary Committee. In the coming months, however, any administrative changes put in place by Obama are almost certain to be reviewed.
Georgia’s Johnny Isakson, 70, has stressed mental health needs of veterans and voted in favor a bill to provide two-year funding for veterans’ benefits, so veterans would continue to receive benefits even in a government shutdown.
Aides say Isakson’s priorities as chairman would include oversight of the new Veterans Access, Choice and Accountability Act of 2014, which was approved this past summer in response to a scandal over long wait times for veterans seeking health care and falsification of records to cover up delays.
Isakson strongly supports a provision in the law that makes it easier for veterans to seek Department of Veterans Affairs-paid care from local doctors. Bringing competition into the VA health care system will improve services, he says. Isakson also said the new law provides an opportunity for the VA to assess the quality of it leadership and management, and said underperforming executives and managers should be fired.
Associated Press writers Andrew Taylor, Kimberly Hefling, Joan Lowy, Alan Fram, Marcy Gordon, Matthew Daly and Alicia Caldwell contributed to this report.
Was the Budget Deal a good Deal for the American Public: Are lawmakers worthy of praise for passing a Budget?
The long awaited Budget Deal has finally passed out of both Houses of Congress. But what has really happened. The answer is in most ways, not much to crow about. While, Budget Chairs, Ryan and Murray, worked hard to coral unity in their political parties, and did in fact avoid, another potential government shut down, and perhaps will avoid further sequester cuts to Domestic Programs. The reality is the deal is not much to be proud of.
After accounting for inflation, non-defense discretionary funding (Domestic Programs) is slated to fall in 2015 nearly back to the 2013 post-sequestration level. By 2016, funding will have dropped below the 2013 post-sequestration level, meaning that all of the gains from the Murray-Ryan deal will be gone. The 2016 funding level is $105 billion – or 18 percent – below the 2010 level, after adjusting for inflation.
While the Budget deal restores some funding to defense and domestic spending, it mostly halted a downward trend of sequester cuts, but it did little to build up to the levels that keep up with inflation or the growing needs.
So while Murray-Ryan was a positive step, policymakers ultimately will need to revisit the funding limits in current law to prevent the further erosion of funding for critical programs.
As one of the Washington Post staff writers recently blogged:
It cuts the pensions of federal workers and military retirees while keeping wide open egregious tax loopholes that benefit the wealthiest. It reduces domestic discretionary spending to Bush-era levels. It does absolutely nothing to create jobs at a time when unemployment remains our biggest economic problem.
Negotiators didn’t even extend unemployment benefits – set to expire three days after Christmas – for1.3 million long-term unemployed workers(and millions of their children), …… Meanwhile, conservatives and progressives agree that letting unemployment benefits lapse would further imperil our fragile economic recovery. In addition to being needlessly cruel, this deal is just plain bad policy…..Simply doing something doesn’t mean that you’re doing the right thing. Washington Post Blog
The end result is the work of Congress is far from done. All agree headway has been made, avoiding bad consequences of sequester, more choice is now given to committees to fund programs. But where are we really? That question won’t be answered by January 15, 2014. Congressman Ryan on Meet the Press last week called the deal a baby step, and he is right. There is still uncertainty, for government employees, contractors, Indian Nations and the many that are dependent on Federal Funding for essential programs. The only fact known is that there is still a need for a grand solution that looks at tax reform for sources of revenue and reform of key programs such as Medicare and Social Security. Real lawmaking will require more effort than what we are seeing from the current Congress.
Last week, both houses of Congress passed the Ryan-Murray budget deal put forth by the Budget Conference Committee. The House passed the measure on Thursday night Dec. 12th by a 332-94 vote, and the Senate followed suit by passing the deal the following Thursday Dec. 19th by a vote of 64-36, and the final measure was to be signed into law by President Obama before he leaves on holiday travels to Hawaii. The two year deal provides for $1.012 trillion in discretionary spending in FY2014, with a slight increase to $1.014 trillion for FY2015. The compromise deal sits essentially half-way between the $1.058 trillion passed by the Democratically controlled Senate in their budget bill this past spring and the $967 billion sequester level spending Republicans sought to continue.
The deal allocates $520.5 billion in military spending and $491.8 billion for domestic programs in 2014. The across the board spending cuts of sequestration have been lifted, with the moderately increased spending to be split evenly between military and domestic spending, which restores military funding nearly to pre-sequestration levels. However, Congress will still face tough decisions in allocating domestic spending through the appropriations process, but the impact on popular programs such as education and Head Start will be less severe. The compromise deal does not continue unemployment benefits for the long-term unemployed which are set to expire three days after Christmas, as Democrats had wanted, and it removes the across the board spending cuts of sequestration in exchange for future savings, disappointing Republicans. In favor of reaching a deal in time to meet the January 15, 2014 deadline, the larger and more ideological issues of tax reform to raise more revenue and containing growing Medicare and Social Security entitlement spending were left largely unresolved.
Among other specific provisions, the deal raises airline fees, presumably to be dedicated towards costs of airport security, and extends the 2% reduction in Medicare payments under the Budget Control Act of 2011 for an additional two years through 2023. However, the largest impact will be felt by government employees and military veterans. Although federal workers will receive a 1% pay increase, that is below the 1.2% inflation rate recently published by the Bureau of Labor Statistics, and does not extend to the lowest paid tiers of wage grade federal employees. New federal employees will be required to contribute 4.4% of their income towards their government pension program, a continued increase from the .8% required pre-sequestration. Also contentious is the reduction of the cost-of-living adjustments by 1% for military retirees under age 62. Despite the increased spending, domestic programs may still face staff reductions through layoffs and early retirement or buyout offers.
Recognizing the challenging timetable to complete the appropriations process before the current stop-gap measure that ended the October federal shut down expires on January 15, 2014, the allocation levels for the twelve individual appropriations bills, known as 302(b) spending caps, were not made public as is customary. Each subcommittee was privately told it’s cap and given until January 2, 2014 to make detailed appropriations and policy changes. Negotiators will convene the following week with the goal of getting passage through the House by January 10, allowing the Senate to begin deliberations on January 13, in time to send a final bill to President Obama for his signature by the January 15 deadline. Assuming this two-year budget deal can be finalized in time to meet the January 15 deadline, Congress still faces revisiting the debt-ceiling issue as that short-term measure is set to lapse as early as March 2014.