Washington Snapshot - April 13, 2017

In This Week's Edition of Snapshot…

Congress IconNews from the Hill

So, What's Up with Tax Reform?

In the coming months, we will provide weekly updates with new developments in the tax reform process.

Congress may be in recess this week, but tax reform is still the talk of the town as congressional Republicans grow increasingly anxious to see what the administration puts forward in its forthcoming tax plan.

“I would hope that they would come out with what they think ought to be done,” said Senate Finance Committee Chairman Orrin Hatch (R-UT). “And if they don’t I’ll be happy to come up with the plan they need,” noting that the sooner they learn of the White House’s positions on tax reform, the better. The anticipation for this plan to be released is largely around the uncertainty of how much the administration’s plan aligns with the House Blueprint — which could give a better idea for how smoothly (or not) tax reform will progress.

Aside from the potential obstacles that may be presented if the administration’s plan deviates significantly from the House plan, it is still unclear whether the House or the administration will take the lead in seeing this through to fruition. Speaker Paul Ryan (R-WI) insists that the central (yet, controversial) feature of the House plan — the border adjustment tax — is gradually gaining support in Congress.

The administration, on the other hand, has indicated that it may be willing to engage congressional Democrats on tax reform — aiming for a broader base of support so as to avoid a repeat of what happened with repealing the Affordable Care Act (ACA). President Trump has indicated his interest in using infrastructure, and more recently, payroll tax cuts, to bring more Democrats into the fold. Earlier this week, President Trump met with U.S. business leaders to discuss options and priorities related to tax reform and infrastructure, as the administration drafts its plan to tackle these issues. Whether or not this strategy will ultimately increase the likelihood of passing a bipartisan overhaul of the tax code has yet to be determined.

One thing that both Congress and the White House do agree on is timing. In an interview with WisPolitics this week, Speaker Ryan stated that the ideal timeline laid out by Republicans in Congress “clearly has some room to breathe” following the mishap with repealing the ACA. The President’s chief economic advisor and Director of the National Economic Council, Gary Cohn, also stated in an interview this week that “getting it done well and getting it done right is more important than getting it done soon,” in reference to tax reform.

Congress Adjourns for Recess Without Clear Strategy on Spending Legislation

Congress adjourned for a two-week recess last Friday without a clear strategy on how to pass a spending bill for fiscal year (FY) 2017 — which needs to pass by April 28 to avoid a government shutdown.

Both houses of Congress will be back in session April 25, giving them less than a week to pass such legislation.

According to POLITICO, Chair of the Appropriations Subcommittee for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Robert Aderholt (R-AL) stated he was "concerned about there only being four days when we get back and a lot's got to happen," in response to a question following the House’s last vote before adjourning for recess. "I think coming back with only four days will be cutting it close."

Gorsuch Swearing In Returns SCOTUS to Full Capacity

On Monday, Neil M. Gorsuch was sworn in as the 113th Supreme Court Justice. His confirmation fills the vacancy left by the late Antonin Scalia. Scalia’s seat was open for close to 14 months as Senate Republicans last year refused to consider then-President Obama’s appointment to fill the seat, Judge Merrick Garland.

Following President Trump’s election and nomination of Gorsuch, Senate Democrats refused to consider his nomination and voted against opening debate on the lifetime appointment to the court. According to the Washington Post, “Gorsuch was confirmed by a 54-to-45 vote Friday, the closest margin since Justice Clarence Thomas was approved more than 25 years ago. The Republican-controlled Senate did away with the filibuster for Supreme Court nominees to confirm Gorsuch.”

Executive & Regulatory News IconExecutive & Regulatory News

White House Lifts Hiring Freeze, but Still Looks to Scale Back Agencies

Yesterday, the White House’s Office of Management and Budget (OMB) Director Mick Mulvaney walked back one of President Donald Trump’s first actions by lifting a federal hiring freeze.

According to NPR, “Cautioning ‘this does not mean agencies will be free to hire willy-nilly,’ Mulvaney said the across-the-board hiring freeze the President imposed by executive order three days after taking office in January is being replaced with a ‘smarter plan, a more strategic plan, a more surgical plan.’” Mulvaney went on to say that this approach would lead some agencies to hire more people while others would be cutting staff at a greater rate than if the freeze was still in place.

On a related note, POLITICO Pro reported that, looking to follow through on President Trump’s campaign promises to decrease the size of government, OMB will soon be directing agencies to “start drafting plans to shrink, merge, or scrap their own functions for the sake of a smaller government.” This is also the goal of an executive order that the President issued in March.

The article went on to say that “Mulvaney will be looking for anything redundant, anything overly expensive and anything that's not ‘justified’ by its ‘public benefits,’ per the [March 13] executive order. For some agencies, this could mean eliminating entire functions or selling real estate. For many, it will likely mean layoffs.”

State Policy IconHappening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

National Council of Nonprofits logo

Reining in Red Tape

The announcement by the Trump administration of the creation of the White House Office of American Innovation (OAI) should draw attention, once again, to the states as “laboratories of democracy” in identifying and solving problems in government. The new White House office will create task forces to focus on initiatives such as implementing regulatory and process reforms as well as developing “workforce of the future” programs. The states have been convening government and nonprofit/foundation task forces for years and have many proven results to show for their efforts.

In New Jersey, for example, ideas nonprofits proposed to the Red Tape Review Commission have resulted in significant cost savings for both state agencies and nonprofits over the past five years. Likewise, legislatively created commissions in Connecticut and Illinois within the past 10 years have identified solutions such as document vaults and reimbursement reforms that have reduced paperwork and accounting challenges.

This past week, the North Carolina House of Representatives gave final approval to a regulatory reform bill. Among other things, it would authorize the Joint Legislative Program Evaluation Division to study the red tape that nonprofits experience when they provide public services through state grants and contracts. The study stems from research showing that half of North Carolina nonprofits with government grants and contracts are paid late by government agencies — and that three-fourths of these nonprofits experience unnecessarily burdensome application and reporting requirements. The study, if commissioned, is expected to recommend solutions to these issues and to address the chronic underpayment of nonprofits' indirect costs by state agencies.

A separate bill in North Carolina would create a Department of Health and Human Services working group to look into duplicative administrative requirements for behavioral health service providers. Texas legislation would address a separate red tape challenge by permitting a public independent audit to satisfy the financial records disclosure requirements under various state regulatory and contracting statutes.

See Partnering for Impact for a more thorough discussion of past collaborations between state governments and nonprofits that enhanced performance and reduced costs. Additionally, Investing for Impact: Indirect Costs are Essential to Success, offers a detailed analysis of state and federal government grantmaking and contracting policies that led to an important mandate in the Office of Management and Budget Uniform Guidance. The mandate requires governments to reimburse charitable nonprofits for the reasonable indirect costs they incur on behalf of governments when federal dollars are part of the funding stream.