Monthly Archives: February 2013

Duncan Warns About Sequester Cuts to ‘Impact Aid’ School Districts

CQ NEWS – POLICY

Feb. 27, 2013 – 2:00 p.m.
Duncan Warns About Sequester Cuts to ‘Impact Aid’ School Districts
By Lauren Smith, CQ Roll Call

Education Secretary Arne Duncan warned Wednesday that the sequester would deliver an immediate and dire blow to school districts located on federally owned lands, such as military bases and American Indian reservations, that receive funding under the Impact Aid program.

Such school districts finance up to 65 percent of their public education system with federal funding since residents there don’t pay property taxes. Appearing at a White House briefing Wednesday, Duncan said he anticipates the sequester gutting $60 million from Impact Aid if it goes into effect on March 1.

“I can’t tell you how frustrating it is to me and how angry it makes me feel,” Duncan said.

Duncan is scheduled to host a conference call Thursday with school administrators from districts that rely on Impact Aid to discuss ways to soften the blow of the funding cut. He acknowledged that if the sequester goes into effect, the Impact Aid funding could be restored later on, but he underscored the negative impact of instability facing already cash-strapped schools.

“I hope Congress can find a way to find some common ground to compromise,” Duncan said. “I don’t think people came to Washington to inflict harm on their constituents  . . .  but that’s what they would be doing.”

Among all school districts, as many as 40,000 pre-kindergarten and K-12 educators could face layoffs as a result of the automatic spending cuts. One school district in West Virginia, Duncan said, has already started handing out pink slips to some of its teachers this week, but the majority of layoff notices will go out in March and April.

Duncan, who previously led the Chicago Public School system, said the sequester would likely force schools to shorten their week to three or four days.

“What choice, what options, what good chances are we giving them?” Duncan asked. “I think the only thing they can probably do is cut days out of the school year. There is no other way to reduce the costs that I’m aware of.”

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Weekly Legislative Report Feb 15, 2013

J.R. Reskovac
Sarah Strup

Agriculture

Senate Agriculture Chairwoman Debbie Stabenow (D-MI) told reporters on Thursday that the agriculture cuts included in the Democratic sequester alternative would save money and remedy a farm bill extension that left important programs with little or no funding.

The agriculture proposal would produce a net savings of $27.5 billion over 10 years by ending yearly fixed direct payments made to farmers and land owners based on the past production history of cropland.  If passed, the Agriculture Department would not have to put meat inspectors on unpaid leave for up to 15 days because of sequestration.

Stabenow also said $3.5 billion would be used to restore mandatory funding for several agriculture disaster assistance programs retroactively to 2012 and for 2013 as well as to fund renewable energy, rural small businesses, new and beginning farmers, specialty crops, organic farming and other so-called orphan programs.  A partial extension of the 2008 farm law (P.L. 110-246) Congress passed in January left the future of the farm bill programs in doubt.

House Agriculture Chairman Frank Lucas, criticized the proposal, saying it would reduce available funding for writing a farm bill by $31 billion.  Lucas has also said that no changes should be made to the commitment set out in the farm bill extension to provide direct payments in October, the start of fiscal 2014.

The overall sequester package faces Republican objections because it proposes tax increases on wealthy individuals and ending business tax breaks.

Budget

Thursday, Senate Majority Leader Harry Reid (D-NV) released a $110 billion plan that would replace the sequester with higher taxes on the wealthy, tax revenue from oil derived from tar sands and spending reductions in agriculture subsidies and defense.

The blueprint would avert about $85 billion in automatic, across-the-board spending cuts that are scheduled to begin hitting federal agency budgets on March 1.  The additional $25 billion in the Democratic plan would replace additional reductions under sequester through December.  Half the replacement savings would come from the tax increases and half from future spending, including $27.5 billion in reductions in defense spending over the next eight years and $27.5 billion from eliminating direct subsidy payments to farmers.

House Speaker John Boehner (R-OH) said Thursday he was open to developing a sequester replacement measure within coming days if Reid can move the measure he is developing in the Senate.  However, Boehner also insisted that any measure to replace the sequester also would have to include a plan to balance the budget within 10 years.

Friday, House Armed Services Committee chairman Howard “Buck” McKeon (R-CA) rejected the proposal from Senate Democrats, saying he would support no further cuts to defense.

Rep. Chris Van Hollen (D-MD) the ranking Democrat on the House Budget Committee, introduced a separate sequester replacement measure in the House, one he said is “consistent with the Senate proposal” but would bring some $120 billion in savings.

Reid said he plans to put the measure on the floor the week of February 25, and a Republican alternative package will also be offered.

Executive Branch

The Senate Armed Services Committee voted 14-11 on Wednesday to endorse the nomination of former Senator Chuck Hagel (R-NE) to be Defense secretary.  The party-line vote followed a week of elevated threats from GOP lawmakers opposed to the nomination.

Over the weekend, James Inhofe (R-OK) threatened to push for a 60-vote threshold for the floor vote on Hagel, while Lindsey Graham (R-SC) suggested he would place a hold on Hagel’s nomination until the Obama administration releases more information about last year’s fatal attack on a U.S. facility in Benghazi, Libya.

Amid accusations of a GOP filibuster, Senate Republicans on Thursday blocked a vote on the nomination of Chuck Hagel to be Defense secretary, but senators appeared poised to clear the nomination after the Presidents Day recess, barring any unexpected revelations.

Senate Finance Committee Chairman Max Baucus of Montana said he expects the panel to vote on Jacob Lew’s confirmation as Treasury secretary after Congress returns from next week’s recess.  Lew, currently White House chief of staff, underwent questioning at his confirmation hearing before the panel on Wednesday.

Miscellaneous

Tuesday, the Senate endorsed 78-22 a five-year renewal (S. 47) of the Violence Against Women Act, which combats domestic violence, sexual assault and stalking.  The vote came a day after senators rejected, 31-59, a proposal by Senator Tom Coburn (R-OK) to strike controversial language that would give tribal courts more authority over non-tribal domestic violence offenders.  The measure now heads to the House, where lawmakers are working to come to a consensus on tribal provisions.

Taxes

Yesterday, a bipartisan group of 53 Senators and Representatives introduced a bill that would allow states to collect sales tax from online retailers.

This bill would resolve the differences between the different versions that were introduced in the House and Senate last Congress, exempting online retailers with less than $1 million in annual sales.

The Marketplace Fairness Act of 2013 would give states the option to require the collection of sales and use taxes already owed under State law by out-of-state businesses, rather than rely on consumers to remit those taxes to the States, which is the current system of tax collection that they are limited to.

“This bill does not tell the states they have to do it; it just enables them to do it,” Rep. Steve Womack (R-AR) said at a press conference announcing the bill.  “How many more small brick-and-mortar obituaries do we have to see before we recognize that we have a problem?”

One of the bill’s co-sponsors, Senator Dick Durbin (D-IL), said he asked Senator Max Baucus, chairman of the Finance Committee, to “make this a priority.”

Water Resources

Senate Environment and Public Works (EPW) chairwoman Barbara Boxer (D-CA) said she intends to mark up legislation authorizing flood control, navigation and environmental-restoration projects next month.

Boxer will need to work with the EPW panel’s top Republican, David Vitter of Louisiana on the Water Resources Development Act (WRDA) reauthorization if she hopes to win bipartisan support.  It has been almost six years since the last authorization (P.L. 110-114) became law in 2007.

The committee released a short draft bill in November, and Boxer said last month she intends to include language, similar to that in a House bill (H.R. 335), that would require all user fees collected for the Harbor Maintenance Trust Fund to be spent on port maintenance, dredging and expansion projects. 

House Transportation and Infrastructure Chairman Bill Shuster (R-PA) has said his committee is also working on a water bill, though he has yet to lay out a timeline.

Washington Outlook

Today, the House adjourned for a week long recess.  Rather than come back for several pro forma sessions designed to prevent recess appointments, the chamber will stay closed the entire time, preventing Democratic protests about the need for the House to work on pending fiscal battles.  The move to officially adjourn comes in the wake of the U.S. Court of Appeals for the D.C. Circuit decision that threw the constitutionality of recess appointments into question.

Democrats accused the majority party of leaving when there is important work on the table, including dealing with the sequester deadline of March 1 and passing the Violence Against Women Act.

In the Senate, Majority Leader Harry Reid (D-NV) agreed to allow the adjournment resolution to pass by unanimous consent, adding bipartisan cover to an action that is frequently the target of political attacks from the minority party.

Both the House and Senate will not be in session next week due to the President’s Day recess.  The next Weekly Legislative Update will cover the week of February 25-March 1.

Weekly Legislative Report Feb 1, 2013

J.R. Reskovac
Sarah Strup

Budget

The Senate on Thursday voted 64-34 to pass H.R. 325, a bill providing a short-term suspension of the government’s borrowing limit

Before clearing the House-backed legislation and sending to the President for signature, senators rejected several amendments mostly aimed at ending government shutdown standoffs and calling for spending reductions.  The amendments included:

  • A proposal from Sen. Rob Portman (R-OH) that the Senate tabled 52-46 would have automatically extended current spending if Congress fails to adopt a budget or continuing resolution.  It would then decrease funding by 1 percent every three or four months.
  • Another amendment from Portman, tabled in a 54-44 vote, would have codified the so-called “Boehner rule,” named for the House Speaker.  The rule says Congress cannot agree to raise the debt ceiling unless cuts in spending by an equal amount are made over the next 10 years.
  • An amendment from Patrick Toomey (R-PA), tabled, 53-45, that would have prioritized certain payments if Congress failed to raise the debt ceiling.  The amendment would call on the Treasury Department to first pay interest on the federal debt, Social Security benefits and military personnel earnings.
  • An amendment from Rand Paul (R-KY) was rejected that would have prohibited the sales of F-16 fighter jets and tanks to Egypt, as well as a proposal from David Vitter (R-LA) that would have sent the bill to the Finance Committee to offset the debt limit increase with spending cuts.

The debt limit bill, which the House passed 285-144 last week, would lift the current borrowing ceiling of $16.4 trillion through May 18 and then raise the limit the following day to account for debt accumulated to that point.  Without action, the federal government was due to reach its borrowing capacity as early as mid-February.

The bill also would tie congressional pay to completion of a budget plan by suspending salaries of members of the House or Senate if either chamber does not adopt a resolution by April 15.  Although the Obama administration would prefer a long-term extension, the White House supports the bill and Obama is expected to sign it into law.

Education

The New America Foundation, a Washington-based think tank, issued a report on Tuesday suggesting several policy changes to federal grants, loans, tax benefits, and college outreach programs.  Most noticeably, the report recommends adding billions to the Pell-Grant program for low-income students.

Staffers from the House Education and the Workforce Committee; the Senate Health, Education, Labor and Pensions Committee (HELP); and the Senate Budget Committee met with some of the authors of the report over the past week to seek guidance as they begin developing proposals to reauthorize the Higher Education Act (PL 110-315).

To fund the expansion of Pell grants, the report proposes eliminating the American Opportunity Tax Credit, a program that has been wildly popular under the Obama administration and one that Obama has urged Congress to make permanent.  In combination with other tax savings, it would direct more than $180 billion over 10 years to the Pell program.

The President has already boosted Pell grants by easing eligibility requirements and increasing the maximum award.  However, with fiscal conservatives using the grant program as a chief example of overspending, they have become difficult to fund.

The proposal is similar to legislation offered by Rep. Tom Petri (R-WI), a senior member of the Education and the Workforce Committee.  He introduced a bill in December to overhaul and simplify the student loan system, and he plans to reintroduce it in the near future.

Miscellaneous

Transportation Secretary Ray LaHood announced Tuesday that he will not stay on for President Barack Obama’s second term.  Also, Energy Secretary Steven Chu announced he will step down from his post.

Massachusetts Governor Deval Patrick announced on Wednesday that William “Mo” Cowan, a former top aide to Democratic, will serve as interim U.S. senator for Massachusetts until a special election is held to fill the seat left vacant by John Kerry’s confirmation as the nation’s new secretary of state.  Cowan, 43, became chief-of-staff to Patrick in 2010 after serving as chief legal counsel during the governor’s first term.

Policy

Thursday, Senate Majority Leader Harry Reid (D-NV) announced plans to offer a measure that would avert the automatic cuts that take effect March 1 under the 2011 debt law (PL 112-25), however it may not move until after the sequester has already taken effect.

A Reid staff member has confirmed that their office is working on a combination of measures to replace the automatic, across-the-board spending cuts, but has not to set a deadline for moving that legislation, therefore it could pass sometime after the cuts begin.  The sequester replacement will likely include a combination of spending cuts and new revenue from eliminating tax loopholes.

If the legislation fails to pass before the deadline, there are certain legislative and administrative actions that can be taken to mitigate the initial effect of the cuts.   One example is a proposal from Senator Jim Inhofe (R-OK) that would give the Pentagon authority to reprogram, or transfer, funds from one budget function to another under the current continuing resolution (PL 112-178) that expires March 27.

Should sequestration takes effect, federal spending will be automatically reduced by an estimated $85 billion, including about $43 billion in defense spending.

Washington Outlook

Next week in Congress, the Senate will reconvene on Monday where they will then begin consideration of a bill (S. 47) to reauthorize the Violence Against Women Act for five years.

The House Budget Committee will meet next Wednesday to discuss the Congressional Budget Office’s budget and economic outlook, in the wake of a government report that said growth was -0.1 percent in the fourth quarter of 2012.

The House Judiciary Committee will meet Tuesday to discuss the U.S. immigration system, on the heels of a bipartisan Senate proposal to reform immigration policy.  That proposal calls for both increased enforcement steps but also ways for millions of illegal immigrations to obtain residency status.

While the President’s FY2014 budget request is due to Congress by February 4, reports this week indicated the White House is at least four weeks behind schedule.