The end of the year is finally upon us. As Holiday decorations are rapidly appearing across Capitol Hill, Congress still has much to accomplish before the end of the year. Our subject matter policy experts have summarized what items Congress must complete and would like to complete, and have assessed likelihood that these items will be addressed before Congress adjourns.
The current Continuing Resolution expires this Friday, December 8. A short-term CR would allow time for Democrats and Republicans to reach an agreement on defense and non-defense spending caps. There is consensus that another CR will pass, averting a shutdown, but there is a significant stumbling block regarding how long it should last. House Republican leaders are advocating for a stop-gap measure that expires on December 22, but they are receiving significant push back from the Freedom Caucus, whose members want any CR to run until December 30. This, they posit, gives them the maximum leverage over funding levels and policy. The Republican Study Committee, another conservative wing of the caucus, has indicated that they also support the December 30 deadline. Senate Majority Leader Mitch McConnell threw a bit of water on that idea this afternoon, saying he didn’t believe that is “the best way to go forward.” A House Rules Committee meeting on H.J. Res 123, which was originally scheduled for today, has been postponed until Wednesday, a reflection of the ongoing uncertainty on the issue. As the date of the CR remains in flux, it is important to note that the text of the House bill includes a provision to allow states that are running out of CHIP funding to receive additional payments through the first quarter of 2018.Democratic and Republican leaders are expected to meet with President Trump on Thursday to continue negotiations on a long-term budget deal. Democrats have indicated that they want any deal to include a provision protecting DACA recipients. Notably, at least 34 House Republicans, who have signed a letter advocated for a “permanent legislative solution,” could also support inclusion of such a provision in the omnibus appropriations bill.
The extension of the debt ceiling officially expires on December 9. However, the U.S. Treasury, as is customary, has the power to invoke “extraordinary measures” to allow the government to pay its bills and extend its borrowing authority. As such, Treasury indicated at the end of last week that the government would exhaust all its options in late March or early April. And, as Republican members have balked in raising the debt ceiling in the middle of an election year, it is likely that a suspension will be included in the larger package that passes either at the end of December or in January 2018.
On September 5th, the Department of Homeland Security issued a memorandum immediately halting the acceptance of all new DACA applications. Should President Trump and Congress fail to pass legislative relief, protections for DACA recipients will begin to expire on March 18, 2018. Congressional Democrats are pressing the president and Republican leadership to include protections for the “Dreamers” in the end of the year spending bill, but it remains to be seen if they will be included. Some House Republicans also believe the issue should be resolved by the end of the year, and have signed a letter to that effect, but the Congressional Republican leadership has not evinced that same urgency.Three questions must be resolved before DACA protections can be moved forward: 1) what is the scope of the class that will be protected, 2) what is the nature of the protection they will be afforded, and 3) what will the Republicans seek by way of border security and related matters in exchange for protection of the Dreamers?
Two months have passed since Congress let CHIP expire. However, the program’s unique structure gives the states and the Centers for Medicare and Medicaid Services (CMS) some flexibility to continue CHIP funding beyond the expiration. That flexibility is hitting its limits with 5 states and the District of Columbia expected to run out of funds for CHIP by the end of the year. On December 4, the House Energy and Commerce Committee announced a plan to provide short-term relief for states.The House passed the CHAMPIONING HEALTHY KIDS ACT (H.R. 3922) in early November providing a 5-year reauthorization of CHIP and other important health programs. The Senate Finance Committee reported out a reauthorization bill in October but the committee’s bill did not include offsets to pay for the bill. While both parties agree on the policy of the bill, disagreements still exist over how to fund the program and both sides are continuing to negotiate pay-fors. The short-term continuing resolution includes a provision that authorizes CMS to redistribute funds to states that run out of CHIP funding through the first quarter of 2018 to allow time for a reauthorization to be approved by Congress.
The House passed H.R. 2874 in a 237-189 vote earlier this November to reauthorize the NFIP for five years. The bill makes some changes to the NFIP, including one that prohibits the government from offering coverage to homes that flood repeatedly. The Senate has yet to take up the bill for consideration, despite the upcoming deadline. We expect a short-term extension of NFIP’s authorization prior to the end of the year.
Section 702 of the FISA Amendments Act is set to expire at the end of the year. Section 702, while reportedly invaluable to intelligence gathering operations, remains a contentious issue on Capitol Hill as concerns over of privacy violations have led to lawmakers’ hesitancy to outright extend the program. Both the House Intelligence and House Judiciary Committees have reported conflicting bills, while the Senate is working on at least two proposals of its own.Sen. Richard Burr (R-NC), Chairman of the Senate Intelligence Committee, has remains insistent that a Section 702 reauthorization "will be attached to some vehicle" and passed before the programs expiration. However, it remains to be seen if fundamental disagreements over the program can be bridged before Congress adjourns.For more on this topic, please read our full December FISA Reauthorization Brief.
Congressional leadership and leaders of the tax writing committees are considering a tax extenders package for enactment this year. There are a host of tax provisions – including the annual tax extenders, and other energy and health care provisions – that purposefully were excluded from the Senate tax reform bill but enjoy broad support in Congress. The contours of the tax extenders package are being deliberated; the current plan is to attach extenders and other tax provisions to a larger vehicle that moves prior to adjournment.
The House and Senate have begun the process of conferencing their versions of H.R 1, the Tax Cuts and Jobs Act. The House officially appointed conferees yesterday. We expect that the Senate will name conferees this week. This likely indicates there will be a formal conference, though deliberations are likely to occur between House and Senate Leadership and Committee Chairs, rather than individual members of the Conference Committee. This is an important distinction from an informal conference, as a formal conference report would not be subject to amendment when the bill is finally considered on the House and Senate floors. Also, the subject matter would be restricted to provisions considered within "the scope of the differences" (the Congressional Research service put together an excellent piece entitled Senate Rules Restricting the Content of Conference Reports).Republican leaders remain committed to completing their work before the end of the year. However, while the House and Senate versions share a great many similarities, there are significant differences in several areas including the new international tax system, when the 20% corporate rate will be effective, the tax rate for pass-throughs, and whether to repeal some popular individual provisions. We think it likely that Congress will complete its work before the beginning of 2018. More information on the details of the tax reform debate can be found on Prime’s Tax Hub.
In November, the Governor of Puerto Rico, Ricardo Rossello, testified before the House Natural Resources Committee that the island will require $94 billion initially for Hurricane relief. In addition, Texas has estimated that it will require over $121 billion of federal assistance to rebuild following Hurricane Harvey and the subsequent flooding in Houston. President Trump has already signed a $36.5 billion supplemental appropriations bill into law, and recently requested an additional $44 billion of disaster funding from Congress. This amount falls far short of Texas and Puerto Rico’s estimated needs – not to mention that Florida will also require relief funding, albeit, far less than Texas and Puerto Rico.California has also requested $44 billion of federal assistance to address the ongoing recovery efforts from this year’s devastating wild fires. This only adds additional pressure to Congress to appropriate funds to the growing list of states lobbying for disaster relief funding. Expect this issue to persist, especially considering next year’s mid-terms elections.
This bipartisan healthcare bill would fund cost-sharing subsidy payments for insurers and allow states to take advantage of existing ACA waivers for approval of insurance plans that would have “comparable affordability” to ACA plans while still enforcing the ACA’s minimum insurance plan requirements. The bill has 12 Republican cosponsors, placing it on the 60-vote threshold for passage in the Senate if every Democratic senator votes for it. Sen. Collins (R-ME) said last week that she had a promise from Majority Leader McConnell (R-KY) that the bill would pass in 2017, so it looks likely to hit the Senate floor in the coming weeks. It’s worth noting, however, that the repeal of the individual mandate in the recently-passed Senate tax bill may throw a proverbial wrench in the works, as it may have rankled enough Democratic Senators to withdraw support and imperil passage of Alexander-Murray.
The most tangible “win” for the president and other border wall advocates was the unveiling of nine Homeland Security-financed concrete and steel prototypes just yards away from the U.S.-Mexican border. It’s unclear how much progress will be made in 2018, beyond selecting a prototype. On November 21, the Senate Appropriations Committee released the chairmen’s recommendations for funding the Department of Homeland Security.In the FY 2018 spending bill, the committee appropriated $13.5 billion for border security, including infrastructure, technology, and border personnel. The committee also reported that such an investment would fully fund the administration’s request for physical barriers, while also maintaining a requirement that DHS provide Congress with a comprehensive border security plan. Amid the recent acquittal of Jose Garcia Zarate in the Kate Steinle case, the president has reinvigorated his push for the swift construction of a border wall, calling the case’s verdict “disgraceful.” Funding the long-promised border wall is expected to be included in discussions on current and future federal spending deals.