THIS WEEK ON THE HILL

SENATE

Debate on the $491.6 billion Defense Authorization bill (S. 1042) will continue throughout the week. The chamber could also turn to remaining conference reports for FY 2006 appropriations bills such as Foreign Operations, Military Construction-VA, and Commerce-Justice-Science. The Senate is not in session on Friday, November 11 due to the Veteran's Day holiday.

HOUSE

The House met yesterday to consider four measures under suspension. The Secure Access to Justice and Court Protection Act of 2005 (H.R. 1751) could also be considered as well as the Deficit Reduction Act of 2005. Conference reports to the FY 2006 appropriations bills for Commerce-Justice-Science and Military Quality of Life-VA could also be considered. The House will not be in session on Friday, November 11 due to the Veteran's Day holiday. The House will also debate its $539.9 billion spending reconciliation package, which was approved on Thursday, November 3; the Senate passed their package last week. It is not clear which amendments the Rules Committee will allow during House floor consideration.

The House and Senate will continue to work to finalize the FY 2006 appropriations process before adjourning for Thanksgiving recess on Friday, November 18. Three measures (Homeland Security, Interior-Environment, and Legislative Branch) have been signed into law, and the conference report to the Agriculture spending bill, which the House adopted on October 28, was cleared by the Senate last Thursday, November 3. On Friday, November 4, the House adopted the Foreign Operations conference report and conferees approved the Commerce-Justice-Science measure. In addition, agreement was reached on the Energy-Water spending bill. It is expected this week that conferees will be named to the Military Construction-VA, Defense, Transportation-Treasury-HUD, and Labor-HHS-Education spending bills.

SENATE PASSES $35 BILLION RECONCILIATION SAVINGS PACKAGE

The Senate passed a $35 billion (over 5 years) reconciliation savings package last Thursday (52-47). The package is greater than the $35.7 billion in savings required by the FY 2006 budget resolution but is far less than the $53.9 billion in savings approved by the House Budget Committee. The Senate will turn now to the second phase of the FY 2006 reconciliation process which calls for a total of $70 billion in tax cuts over five years. The Senate Finance Committee is scheduled to mark up its package on Thursday.

HEALTH AND HUMAN SERVICES. With regard to Medicaid, an amendment was approved that would prevent any state in FY 2006 from receiving more than a .5 percent decrease in their FMAP. The cost of the amendment was $500 million and was offset by a provision that would extend prescription drug rebates to managed care organizations with Medicaid enrollees. This will save over $1.7 billion over five years and was a priority in the package of Medicaid reforms, forwarded by the National Governors Association. Another amendment offered by Senator Smith (R-Ore) that would provide $450 million for a demonstration project to provide Medicaid coverage to low-income individuals with HIV was approved.

An amendment offered by Senator Reed (D-R.I.) that would have stricken language in the budget resolution on targeted case management (TCM) services provided under Medicaid failed by a vote of 46-52. The TCM provision prohibits several foster care services from being covered by Medicaid's TCM benefit; however, there is serious concern that the language may go far beyond the scope of its intent. The provision also limits federal financial participation for case management services when a third party, including any federal, state, or local program, would also be liable to pay for these services.

A decision by Republican leaders not to add $3.95 billion in spending for a flu pandemic was decided and will likely be included in one of the remaining FY 2006 appropriations bills.

EDUCATION. The savings total was reduced from $39.1 billion when the chamber approved by voice vote an amendment by Senator Mike Enzi (R-Wyo.) to increase spending by $2.7 billion for education hurricane relief and lowering student loan origination fees. The Enzi amendment provides $1.7 billion in education hurricane relief and $1 billion to reduce higher education student loan origination fees from 3 percent to 2 percent. Reimbursement for all displaced students would flow through the state to local education agencies (for public, private, or religious schools) and include a differentiated rate for students with disabilities. Senator John Ensign offered a second degree amendment (S. Amdt. 2404) to Senator Enzi's amendment that would change the funding mechanism for displaced students attending non-public schools, but it was rejected by a vote of 31-68.

SPECTRUM D-TV. An amendment by Senator John McCain (R-Az) that would have accelerated the transition to digital television was rejected by a vote of 30-69. It would have moved the date when broadcasters must relinquish analog spectrum forward by one year to April 7, 2008. The Senate adopted (by voice vote) an amendment by Senator David Vitter that would provide $1.7 billion in funding for first responders and coastal restoration in states damaged by hurricanes. The money would come from spectrum sales from digital television conversion if those sales generate more than $11 billion.

AMTRAK REAUTHORIZATION. Senator Trent Lott (R-MS) was successful in attaching his Amtrak authorization bill to the reconciliation package. The Amtrak language was deemed necessary to head-off a threatened veto of the FY 2006 Transportation spending bill since it contains funding for Amtrak($1.45 billion) but no reform provisions. Lott's amendment would authorize Amtrak at $11.4 billion through 2011. Of that, only $3.3 billion would go toward operations; $6.3 billion would fund grants to Amtrak and interested states for capital improvements; and $1.6 billion would be authorized to pay back Amtrak's high interest debt. Additionally, the bill would allow states to petition Amtrak to let them or another entity take over long-distance routes that are money-losing, would allow freight companies to bid on Amtrak routes that also use freight tracks, and would give the Surface Transportation Board the authority to penalize freight railroads who did not give Amtrak trains priority on its tracks.

HOUSE COMMITTEE APPROVES RECONCILIATION PACKAGE

The House Budget Committee approved a reconciliation package calling for $53.9 billion in mandatory spending cuts. The package combines the savings recommendations of eight authorizing committees and the total amount of savings exceeds the original target of $34.7 billion, set forth in the FY 2006 budget resolution. Under budget reconciliation rules, the Budget Committee was not allowed to amend the bill and several motions which would have instructed the Rules Committee to include amendments in its decision regarding floor debate were defeated. It is unclear what amendments the Rules Committee will allow during House floor consideration next week.

ENERGY & COMMERCE COMMITTEE. The Energy and Commerce provisions include many of the recommended short-run Medicaid reforms that Governors put forward, such as prescription drug payment reform, increased flexibility for cost-sharing and benefit design, and reforms to prevent inappropriate asset transfers by seniors applying for Medicaid long-term care.

WAYS & MEANS COMMITTEE. The Ways and Means Committee provisions call for a total savings of $6.7 billion from key human service programs. For example, the reconciliation package would gradually reduce the federal match rate for child support administrative costs from 66 percent to 50 percent, achieving $3.9 billion in savings over five years. The package also would eliminate the federal match for the child support incentive fund, which states largely reinvest into its child support program. The package also includes a five-year reauthorization of the TANF block grant and related programs. Many of the provisions that were included in the House stand-alone TANF bill mirror provisions within this reconciliation package, but do not contain everything that was in the original TANF program reauthorization bill.

EDUCATION & WORKFORCE COMMITTEE. The package includes student loan reform provisions that would provide net savings of $14.5 billion from FY 2006-FY 2010, including $4.244 billion in student loan increases. The net savings for FY 2006 would be $7.525 billion, mainly from provisions of the Higher Education Act (H.R. 609).

The package also includes waivers for institutions and students affected by Hurricanes Rita and Katrina, with unused funds required be returned. A six-month deferment would also be granted for any student loan borrower living in or working in an area affected by Hurricanes Katrina and Rita. Chairman John Boehner's (R-Ohio) proposal for K-12 education hurricane relief (H.R. 4097), which was rejected by the House Education and Workforce Committee by a vote of 21-26, could be included in the House budget reconciliation package by the Rules Committee.

TRANSPORTATION COMMITTEE. Congressman Jeff Flake (R-AZ) has proposed legislation that would enact a 10 percent across-the-board rescission for authorizations contained in the recently passed transportation reauthorization bill (SAFETEA-LU), except for those authorizations contained tin the Highway Safety Improvement Program. The proposed legislation (H.R. 4071) would also eliminate all high priority project descriptions contained in the bill, instead giving the funding directly to the state transportation departments.

AGRICULTURE COMMITTEE. The Agriculture Committee's provisions include $844 million in savings over FY 2006-FY 2010 from reforms to target food stamp benefits - including terminating categorical eligibility for recipients of non-cash TANF assistance, and tightening the waiting period for immigrants to receive benefits. Also included are provisions waiving the state match of 50 percent for all state administrative costs within the Food Stamp Program for hurricane affected states during a specified period - at a cost of $38 million.

In addition, savings are achieved through agriculture commodity programs and conservation programs. Provisions include a savings of $533 million in FY 2006, and $1.006 billion over FY 2006-FY 2010 through reducing by 1 percent direct payments for recipients from FY 2006 through FY 2009, instituting a timing shift for direct payments, and reducing the amount of direct payments that can be taken as advances. Conservation programs would see a reduction of $760 million over FY 2006-FY 2010.

PRESIDENT ANNOUNCES PLAN FOR RESPONSE TO FLU PANDEMIC

Last week, President Bush outlined his national response to a potential flu pandemic focusing on three main goals for addressing avian influenza and similar pandemic threats. The plan calls on Congress to fund $7.1 billion in emergency spending to: help detect outbreaks as they develop globally; stockpile current vaccines and improve the ability to develop new vaccines; and improve the response capacity of states and localities. The plan also requests the following:

$250 million in new funding for global networks and partnerships with more than 88 countries, as well as the development of a National Bio-Surveillance Initiative.
$1.2 billion for stockpiling 20 million doses of a newly developed vaccine by the National Institutes of Health (NIH) based on the current strain of the virus.
$1 billion to stockpile enough antiviral medications like Tamiflu and Relenza for first responders and at-risk populations.
$2.8 billion to fund the development of new vaccine-producing technology that could help speed future vaccines to market.
$583 million to be spend on preparedness and response capacity, which includes $100 million to help states complete and exercise their pandemic plans.

The Administration has launched a web site to help educate the population about pandemics and what actions are being taken. Visit www.pandemicflu.gov/ for more information.

AHP ALTERNATIVE LEGISLATION PROPOSED

Chairman Michael Enzi (R-Wy) of the Senate Help, Education, Labor, and Pensions Committee (HELP) introduced legislation that would give more options for small businesses to purchase health insurance, yet attempt to alleviate past concerns raised with similar association health plan (AHP) legislation. S. 1955 would allow small business and trade organizations to pool their members to purchase health insurance but allow states to continue to regulate such entities, although they would only be required to offer benefits that are currently mandated in at least 45 states. In addition, the bill includes provisions that seek to "harmonize" state regulation of all health insurance by establishing federal standards that much be adopted by each state.

HOUSE JUDICIARY SUBCOMMITTEE HOLDS HEARING ON PRISONER REENTRY AND THE SECOND CHANCE ACT

Last week, the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security, held a hearing on the Second Chance Act of 2005 (H.R. 1704). The legislation is a "bipartisan bill that will help people transition to life outside of prison and provide strategic help in the five key areas of employment, housing, mental health, substance abuse, and support of families." The bill would reauthorize $40 million for fiscal years 2006 and 2007 for adult and juvenile offender reentry demonstration projects. States and units of local government may apply for the projects through the Attorney General by submitting a reentry strategic plan, including the establishment of a reentry task force to pool existing resources and funding streams to promote lower recidivism rates for returning prisoners. Each year more than 650,000 individuals are released from the nation's prisons.

Last year, Governors Guinn and Easley (D-N.C) authored a National Governors Association (NGA) policy supporting the establishment of reentry programs, stating that it is in the best interests of states and the nation to increase public safety and more efficiently and creatively use funds available for crime reduction by implementing effective reentry programs.

CONFEREES APPROVE ENERGY-WATER BILL WITH REDUCED FUNDING FOR YUCCA MOUNTAIN

House and Senate conferees approved a $30.6 billion spending bill yesterday that encompasses funding for the Department of Energy and the Bureau of Reclamation, among other entities. The measure, approved unanimously, includes $450 million for the Yucca Mountain facility, about $200 million below the Bush Administration's request. The figure represents a significant reduction in funding for Yucca Mountain; the approved figure is over $125 million below the amount approved in Fiscal Year 2005.

HOUSE LIMITS EMINENT DOMAIN POWERS IN RESPONSE TO HIGH COURT DECISION

The House passed by a wide bipartisan margin, a bill to limit local municipalities' abilities to utilize eminent domain for economic development purposes. The bill, H.R. 4128, was aimed at discouraging local and state governments from utilizing seemingly broadened powers of eminent domain granted by the U.S. Supreme Court in Kelo v. City of New London. Republicans and Democrats alike derided the decision, with Rep. Jim Gibbons (R-NV) calling it "one of the worst Supreme Court decisions in my memory." The bill would forbid state and local governments from using eminent domain to take property intended for private economic development. Governments that violate the law would be forbidden from collecting federal money for economic development projects for two years. The bill passed 376-38.

For a list of this week's federal grants, please visit our website at: www.nevadadc.org