Congressional Issues Update - Summer 2013
As part of our continuing effort to provide information on Congressional activities, we are pleased to provide the following updates for the House and Senate.
In the months prior to the August recess, the House and Senate continued to work on major items on the legislative agenda, including FY 2014 appropriations bills, comprehensive immigration reform, and the 2013 Farm Bill. The following is an overview of legislative activity that has occurred since the beginning of the 113th Congress, as well as the issues Congress is expected to address when legislators return from the August recess.
Budget and Appropriations
In both chambers, the Appropriations Committees continued to draft FY 2014 appropriations bills, with the House using a topline discretionary spending level of $967 billion and the Senate using a discretionary spending level of $1.058 trillion. The Senate’s spending level assumes that sequestration will be repealed or replaced. While both House and Senate Appropriations Committees worked to move their respective appropriations bills to a vote in each chamber, this $91 billion gap continues to inject uncertainty into the FY 2014 appropriations process. If Congress cannot agree on a discretionary spending level by the end of the current fiscal year on September 30th, it may be forced to pass a Continuing Resolution to fund the Federal Government for a period of time. Both the House and Senate FY 2014 budget resolutions would exceed spending caps required under the Budget Control Act of 2011. Should Congress fund the Federal Government at these higher levels, another round of across-the-board sequester cuts would take effect.
The House Appropriations Committee has reported 10 out of 12 appropriations bills to the full chamber (all except Interior-Environment and Labor-Health & Human Services-Education), and has passed four of these (Defense, Energy-Water, Homeland Security, and Military Construction-Veterans Affairs). The Senate Appropriations Committee has reported 11 out of 12 appropriations bills (all except Interior-Environment).
Prior to the August recess, both chambers were slated to take up their respective Transportation-Housing and Urban Development (T-HUD) Appropriations bills. However, House Republican leaders pulled the FY 2014 T-HUD Appropriations bill (H.R. 2610) from the floor until after the August recess, citing insufficient time to consider the bill. House Appropriations Chairman Harold Rogers (R-KY) suggested that the real reason was a lack of support among Republicans for the bill due to cuts it would make to housing and transportation programs. The Chairman pointed to this as an indication that members of his party were unwilling to adhere to the spending levels contained in the House’s FY 2014 budget resolution (H.Con.Res. 25) passed just months earlier, and called for a bipartisan deal to replace sequestration. Unlike Military Construction-Veterans Affairs or Homeland Security Appropriations bills, the Transportation-HUD Appropriations bills display stark differences between the spending priorities of the Republican House and the Democratic Senate. Shortly after the House leadership pulled its T-HUD Appropriations bill from the floor, the Senate T-HUD Appropriations bill failed to overcome a cloture vote, with Senate Republicans opposing the bill’s violation of spending levels established in the Budget Control Act.
In late June, the Senate voted 68-32 to pass S. 744, the Border Security, Economic Opportunity and Immigration Modernization Act (S. 744). The legislation, as amended in the Senate Judiciary Committee and on the floor of the Senate, would create a conditional pathway to citizenship for the roughly 11 million undocumented immigrants living in the United States. While Senate Republicans and some Democrats viewed the bill’s original border security provisions as too weak, a stronger border security title introduced by Senators Bob Corker (R-TN) and John Hoeven (R-ND) helped secure additional votes for the legislation.
The focus then turned to the House, where legislators continued to pursue dual tracks on immigration reform. The House Judiciary Committee has advanced piecemeal immigration bills addressing single issues such as agricultural guest workers, employment eligibility verification, visas for high-skilled workers, and border security. At the same time, a House bipartisan “Gang of Seven” has continued to develop and draft the legislative language of a comprehensive immigration reform proposal.
Though the Senate has completed work on its immigration bill, opposition to comprehensive immigration reform among some Republican legislators has slowed immigration reform efforts in the House. Further, should the House go to conference with the Senate, it is unclear if legislators would be able to successfully reconcile the Senate’s measure with more conservative legislation emerging from the Republican-controlled House. As such, the outlook for immigration reform remains uncertain at this time.
On May 15th, the Senate voted 83-14 to pass S. 601, the Water Resources Development Act (WRDA). The bill would authorize construction of Army Corps of Engineers’ water projects that meet certain criteria, and includes provisions to expedite the environmental permitting process. It would increase funding available from the Harbor Maintenance Trust Fund for dredging and other harbor projects. The Senate bill also includes the Water Infrastructure Financing and Innovation Act (WIFIA), a pilot program intended to help water utilities obtain low-interest financing for water infrastructure projects. The program is modeled after the Transportation Infrastructure Finance and Innovation Act (TIFIA).
House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) plans to introduce the House WRDA bill after the August recess in order to mark up the bill in September and advance it to the House floor in October. While the Army Corps of Engineers would be responsible for selecting projects to be authorized, Congress would review and approve this list.
Agriculture and Nutrition Programs
In June, both chambers took up their respective 2013 Farm Bills. While the Senate voted 66-27 to pass S. 954, the Agriculture Reform, Food and Jobs Act of 2013, the House voted to reject H.R. 1947, the Federal Agriculture Reform and Risk Management Act of 2013. Disagreement between Democrats and Republicans on the appropriate amount of funding for the Supplemental Nutrition Assistance Program (SNAP) was one key factor in the Farm Bill’s defeat. The House bill would have cut SNAP by $20.5 billion over 10 years, compared to the Senate’s $4 billion over 10 years. Following the House vote, the House Republican leadership split the bill into two parts and advanced the agriculture provisions separately. A group of House Republicans began negotiating a revised nutrition title that would cut SNAP by $40 billion over 10 years.
House Ways and Means Chairman Dave Camp (R-MI) and Senate Finance Chairman Max Baucus (D-MT) continued to develop proposals to overhaul the nation’s tax code. In February, Chairman Camp assigned Ways and Means Committee members to 11 Tax Reform Working Groups tasked with examining different sections of the tax code and making recommendations for reform. Senate Finance Chairman Max Baucus and Ranking Member Orrin Hatch (R-UT) took a different approach by starting with a blank slate and asking Senators to advocate for tax provisions they want to see preserved. Chairman Baucus said that his Committee will vote on legislation to reform the tax code sometime in the fall, while Chairman Camp has targeted October 2013 for a House Ways and Means markup. Congressional Democrats and Republicans continue to disagree on whether tax reform should be revenue-neutral. Chairman Camp has also not ruled out linking tax reform to an increase in the debt limit.
Lawmakers may take up the issue of tax-exempt municipal bonds in the context of an overall reform of the tax code. In July, 139 Members of Congress cosigned a letter to House Speaker John Boehner (R-OH) and Democratic Leader Nancy Pelosi (D-CA) supporting the preservation of the tax-exempt status of municipal bonds.
Marketplace Fairness Act
The Senate took up Senator Mike Enzi’s (R-WY) Marketplace Fairness Act (S. 743), which would allow states to collect online sales tax revenue from purchases made by consumers in their states from out-of-state Internet retailers. In April, Senate Majority Leader Harry Reid (D-NV) moved the bill directly to the Senate floor, bypassing the Senate Finance Committee. In May, the Senate passed the measure by a vote of 69-27. The House companion legislation, H.R. 684, currently has 66 cosponsors and remains in the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. House Judiciary Chairman Bob Goodlatte (R-VA) has concerns about the House legislation in its current form, but the Senate’s passage of the Marketplace Fairness Act in May has led proponents of the legislation to push for action in the House.
The House Judiciary Committee, led by Chairman Bob Goodlatte (R-VA), has begun a review of the nation’s copyright laws to determine how to make them applicable to the digital age. The Subcommittee on Courts, Intellectual Property, and the Internet has held a number of hearings on this subject in recent months, including one in March in which the Register of Copyrights, Maria Pallante, testified. In her testimony, Pallante urged Congress to undertake a broad update of current copyright law in order to make it more forward-thinking and flexible. In particular, she called for an expansion of the public performance right for sound recordings as well as stronger penalties for illegal streaming. In July, the Subcommittee held another hearing on the role that copyrights play in innovation in the United States. The Judiciary Committee is expected to hold more hearings on copyright law in the near future.
House and Senate Committees developed legislation to reauthorize and reform the Workforce Investment Act of 1998, which expired in 2003. The House’s SKILLS Act (H.R. 803) would consolidate 35 employment and training programs into a Workforce Investment Fund, while the Senate legislation, the Workforce Investment Act of 2013 (S. 1356), would largely maintain the current structure of job-training programs while calling for increased assessments of the effectiveness of these programs. Both the House and Senate bills would call for more employer representation on local workforce boards. The House voted to pass its bill in March, while the Senate Health, Education, Labor and Pensions Committee advanced its bill to the floor just before the August recess. This bill is still awaiting action in the Senate.
The Senate also devoted time to consideration of Cabinet nominations, voting unanimously on June 27th to confirm Charlotte Mayor Anthony Foxx to become the next Secretary of Transportation, succeeding Ray LaHood. The Senate also voted to confirm Penny Pritzker as Secretary of Commerce and Michael Froman as the U.S. Trade Representative. Foxx, Pritzker and Froman have each been sworn in. Froman has expressed support for renewing trade promotion authority, or “fast-track trade authority,” and has said the Obama Administration stands ready to engage with Congress on this issue.
Upcoming Legislative Agenda
Congress included a six-month extension of the Temporary Assistance for Needy Families (TANF) block grant in the FY 2013 Continuing Resolution to fund the Federal Government, which is scheduled to expire on September 30th. Congress must either reauthorize TANF or pass another short-term extension. The partial extension of Farm Bill programs that was included in the American Taxpayer Relief Act of 2012, commonly known as the fiscal cliff deal, is also scheduled to expire on September 30th.
On December 31st, business, individual and energy tax provisions that were extended as part of the fiscal cliff deal are scheduled to expire unless Congress chooses to extend them. These include the deduction for mortgage insurance, Section 179 business expensing, the research and experimentation tax credit for businesses, and the New Markets Tax Credit.
When Congress returns from the August recess, the Senate will have just 16 legislative days before the September 30th deadline, while the House has scheduled nine legislative days to complete their ambitious agenda. In addition, the Treasury is expected to breach the debt limit sometime in October or November. As such, fiscal matters are expected to dominate the Congressional calendar in the fall. Following this, legislators are expected to work to reconcile legislation on the aforementioned issues, including immigration reform, the 2013 Farm Bill, water infrastructure, and job training programs.