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LEGISLATIVE UPDATE FOR AUGUST 11, 2014:

Legislative Update



FY 2015 Appropriations
FY 2015 stated with high hopes of returning to the regular order of marking up, passing and conferencing all the 12 appropriations bills before September 30, 2014, the end of the fiscal year. Hopes were high as the top line number of $1.014 Trillion for FY 2015 appropriations had been settled last year in the two year budget agreement and the Senate Chair, Senator Barbara Mikulski and the House Chairman Hall Rogers have developed a good working relationship and were both committed to a return to regular order.

Progress stalled on June 20 when the mini-bus of three bills (Transportation and Housing; Commerce, Justice and Science and Agriculture) was pulled from the Senate floor halting further consideration. This set back follow an earlier blow to the process when on Wednesday, June 18 the Energy &Water appropriations full committee markup was cancelled and the week before the full committee markup of the Labor/HHS was “postponed”.   At issue are a series of politically difficult amendments that Republican members are pushing, such as blocking the Administration’s regulations on carbon emissions that could well pass as several Red State Democrats might need to vote with Republicans.


On September 8 when the Congress returns from its 5 week vacation it will need to address this impasse as all spending authority expires on September 30.   Appropriations members from both parties have acknowledged that a Continuing Resolution (CR) will be needed for all twelve bills until after the November elections.   Following the elections, the Congress will likely either pass an Omnibus bill to package all 12 bills in one legislative vehicle or simply pass another CR to a date after the 114th Congress is seated. 

Nevertheless, many individual appropriations bills had been passed or marked up.
In the House eight  of the twelve appropriations bills for Fiscal Year 2015 have passed including: Commerce, Justice and Science; Department of Defense; Financial Services; Homeland Security; Legislative Branch; Military Construction and Veterans Affairs; Energy & Water and Transportation ,Housing and Urban Development.  Of the remaining four bills to be considered, Labor-HHS is the only bill that has not even been marked up at even the Subcommittee level.  With Labor- HHS Appropriations Subcommittee Chairman Jack Kingston in a tough election for the open Georgia Senate seat, it is unlikely a bill will be brought up by his Subcommittee until after the election.  The other three bills that have been marked up at the full committee level are:  Agriculture; Interior & Environment and State & Foreign Relations.

In the Senate while no bills have passed the floor, eight have been marked up in full committee and three have been marked up in subcommittee. Only one bill…the Interior & Environment bill…has not been marked up although the Chairman, Jack Reed and the Ranking Member Lisa Murkowski have released a draft bill and report that include their recommendations.  

For copies of the tables that show the progress in both the House and Senate for all 12 of the Appropriations bills you may contact our office by emailing bcarlstrom@madisonassoc.com .

Congress faces gridlock beyond Appropriations
While the lack of progress in Appropriations gets a lot of attention, all other major legislation in this session of Congress ---Immigration, highways, tax reform---- has failed to pass.  Any and all proposals from the Administration (with the exception of addressing the back log of care for Veterans) have quickly become stalled in partisan gridlock.  Following is a quick summary of several   high profile examples of gridlock in this Congress.

Immigration –failure to pass reform legislation or supplemental funding

Last year on June 27, 2013 the Senate passed S. 744, the Border Security, Economic Opportunity and Immigration Reform Act by a vote of 68-32. The bill was put together by a bipartisan group of 8 Senators. While Speaker Boehner has promised an incremental approach to the problem there has been no substantial action toward general reform. 

Nevertheless, as the number of accompanied and un-accompanied children from Central American surged on the boarder to over 60,000 a sense of urgency grew for incremental action. Even though this problem began in the 2006 to 2008 period Republicans blamed the Obama’s June 15, 2012 Executive Order that gave immigrate children who grew up in this country a 2 year grace period from deportation.  The UN and other groups attribute the surge to violence in Guatemala, Honduras and El Salvador that often targets children refugee status.

To deal with the influx of Central American children crossing into the United States, the Administration responded with a $3.7 billion supplemental request. The Senate appropriations committee reduced it to $2.7 billion but it failed to get the necessary 60 votes on the Senate floor needed to proceed.  At issue was the insistence of Republicans members to include amendments to repeal the 2008 Human Trafficking law that requires due process toward possible refugee status which slows the deportation of these Central American children.

On July 30 the House pulled their $659 supplemental from the floor as it did not have the votes to pass. After the leadership added funding for National Guard troops, added language to repeal the 2008 human trafficking law and stopped any expansion of the Deferred Action for Child Arrivals program the House on August 1, passed the $659 million bill along party lines.  As the Senate viewed the House bill unacceptable and had already adjourned for the recess no final Congressional action has been taken.

As the Congress has failed to respond, the Administration has pledged to “act alone” within existing authorities and funding levels.

Highway Trust Fund
The primary source of funding for the Highway Trust fund is the 18.4 cent per gallon gasoline tax that has not been raised since 1993 or for over 20 years. As fuel efficiency continues to increase the gas tax has not been adequate to fund the growing highway and transit infrastructure needs of the country.  From 2008 to 2010 Congress has authorized the transfer of $35 billion from the general fund of the U.S. Treasury which has helped but still the CBO projected that the fund would become insolvent by August, 2014 without new revenue and/ or reduced spending. To address this crisis the Transportation announced a plan to reduce spending by 28% on August 1, distribute funds to the State based only on available revenue. This would have put as many as 700,000 people out of work and delayed and /or halted many projects.

In April, the Administration proposed a new $302 billion four year program financed both by the gas tax and by the elimination of several corporate tax breaks. Many in Congress also proposed raising the gas tax.  As no action on a compressive plan made any progress emergency action was necessary.


On July 31, after the House rejected Senate changes, Senators conceded and voted 81-13 for a $10.9 billion bill to fund highway projects through May 2015. Earlier in the week, the Senate voted to amend the House passed Highway Trust Fund bill, changing the length of the extension to December to pressure lawmakers to come up with a long-term solution after the midterm elections and changing the funding sources.

The House’s nine-month extension relies on so-called “pension smoothing” — a proposal that budget experts across the ideological spectrum have dubbed a budget gimmick — and boosting customs user fees to extend highway funding.  This issue will need to be addressed again in May, 2015.

Tax Reform
On February 26, 2014 Dave Camp, Chair of the House Ways & Means Committee released a comprehensive tax reform proposal titled the “Tax Reform Act of 2014”. This was the culmination of his 3 years as Chairman of the Committee many hearings and collaboration with Max Baucus, Chairman of the Senate Finance Committee.  While there seems to be general agreement on the need for comprehensive tax reform as the year went by everyone seemed to also agree that it could not be done in 2014.

Efforts to reform parts of the code to eliminate, for example,  corporate loop holes or to prevent U. S companies from essentially re- incorporating as foreign firms to avoid U.S taxes have not advanced.  The primary goal of Republicans has been to reduce the top rates for businesses but because most companies (about 80%) are not incorporated their earnings are taxed on the individual returns of their owners.  Therefore Republicans have insisted that an overhaul of the corporate tax code must move through Congress in tandem with a rewrite of the tax code for individuals. Also at issue has been whether a re-write of the tax code should be revenue neutral or whether more revenue should be generated to close the deficit and/or fund National priorities such as rebuilding and expanding our infrastructure.

Last month Jack Lew, Treasury Secretary stated that “ even the most optimistic know that the  Administration and Congress need more time to complete bipartisan comprehensive business tax reform” but he felt the moribund process is moving “steadily forward”.

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