In This Week's Snapshot...
- Budget Agreement Passed by the House
- Moving onto 2020 Appropriations Bills
- Senate Approves New Defense Secretary
- Student Loan Debt Legislation Unveiled
- USDA Proposes to Narrow Food Stamp Eligibility
- Department of Labor Resources for Hurricane Recovery
- States Bring Suit Against SALT-State Tax Credit Regs
The House today approved the $1.37 trillion budget bill, H.R. 3877 (116). This represents the agreement struck by congressional leaders and the White House in the past week. The House is scheduled to leave for the August recess on Friday, but the Senate is in session next week, allowing more time for their vote on the bill. President Donald Trump is expected to sign the two-year deal, which would suspend the debt ceiling through July 2021 and raise spending for military and non-military programs by $320 billion. Treasury Secretary Mnuchin said President Donald Trump "absolutely" supports the deal and predicted it would pass — although fiscal conservatives are hoping to dissuade Trump from supporting a deal that does nothing to curb federal spending. What this deal does do is avoid massive domestic programs budget cuts that would have gone into effect automatically in September had the deal not been struck.
Senate spending leaders plan to move swiftly on appropriations bills when the $1.37 trillion budget deal clears Congress. According to Politico, Senate Appropriations Chairman Richard Shelby (R-AL) indicates the 12 fiscal 2020 spending bills will be divvyed up during the August recess, setting the 302b allocations so subcommittee markups can begin when lawmakers return from the summer break.
The two-year agreement would suspend the debt ceiling through July 2021 and raise spending for military and non-military programs by $320 billion. The Senate has yet to mark up any appropriations bills, with Shelby preferring to wait on the spending levels set by the bipartisan deal.
The Senate confirmed Mark Esper as the new Department of Defense Secretary. Previously, he served as Secretary of the Army, and formerly worked on Capitol Hill as national security adviser for former Senate Majority Leader Bill Frist, and as a professional staff member on the Senate Foreign Relations Committee. He has indicated that his priorities will include military modernization, filling senior Pentagon vacancies, and diplomacy with Iran.
The Student Loan Debt Relief Act is being introduced by Sen. Elizabeth Warren (D-MA) and co-sponsored by Rep. Jim Clyburn (D-SC) who hope to get Congress to deliberate the measure in the fall.
The legislation introduced Tuesday outlines a process by which the federal government would automatically cancel most student loans without requiring borrowers to submit applications. The Education Department would use existing income and debt information to determine who qualifies. Warren's measure follows a legislative proposal released in June by Sen. Bernie Sanders (I-Vt.) whose plan would go further in eliminating all outstanding student loan debt.
Republicans and some moderate Democratic critics of the debt relief plans have expressed concerns about the massive cost of forgiving student loans outright. Private student loan borrowers would also be eligible for debt relief under the bill by refinancing their private debt into federal student loans. Additionally, the legislation calls for lowering the interest rate on all existing federal student loans.
The bill released on Tuesday does not contain any offset for the $640 billion in student debt relief.
What we are hearing...
The House Ways and Means Committee holds its very secretive meeting today dealing with the tax code provision that gives the Chairman the ability to access confidential tax returns.— The battle lines are forming over a Social Security overhaul proposed by Rep. John Larson (D-CT). — American multinational corporations brought back record amounts of profits in 2018, the first year that the Tax Cuts and Jobs Act was in effect.
The U.S. Department of Agriculture (USDA) is proposing to close a loophole that allows states to make participants receiving minimal Temporary Assistance for Needy Families (TANF) benefits automatically eligible to participate in USDA’s Supplemental Nutrition Assistance Program (SNAP). This proposal would narrow eligibility for food stamps, potentially shedding three million recipients of the benefit.
The proposed rule, published in the July 23 Federal Register, would limit SNAP/TANF automatic eligibility to households that receive substantial, ongoing TANF-funded benefits aimed at helping families move towards self-sufficiency. The Administration says the proposed rule would fix the loophole that has expanded SNAP recipients in some states to include people who receive assistance when they clearly don’t need it. A person could still be eligible for SNAP if the individual receives noncash benefits, such as subsidized employed work support, including transportation and child care assistance.
The comment period will start Wednesday and run until September 28.
DOL announced its resources available to individuals impacted in early July by Hurricane Barry in Louisiana, Arkansas, and Mississippi. Barry was the first Atlantic Hurricane of the 2019 season. DOL also awarded another round of funding to North Carolina’s workforce agency for continued recovery response to Hurricane Florence in September 2018.
A good reminder -- it’s hurricane season! Share FEMA’s guide to preparedness with friends, family, and grantees -- even though the National Oceanic and Atmospheric Administration (NOAA) predicts a “near normal’ season.
Exclusive from our colleagues at the National Council of Nonprofits.
Three states filed a lawsuit last week against Treasury and the Internal Revenue Service challenging the new final regulations that limit the federal tax benefits of donations taxpayers make to entities, including some community foundations, that also entitle the taxpayers to state or local tax credits for the contributions. The regulations were issued in response to state workaround legislation enacted in various states as a way to avoid the $10,000 cap on SALT deductions under the 2017 federal tax law. Contrary to prior Treasury and IRS policy, taxpayers must now reduce federal charitable contribution deductions by the amount of the tax credit they receive. The regulations go further than the post 2017 tax law and also apply to many programs in 32 states and the District of Columbia that provide a SALT credit when a taxpayer makes a donation to certain nonprofits and foundations, such as school choice scholarship funds, and endowments in Montana and North Dakota.
In the lawsuit, the three states – Connecticut, New Jersey, and New York –allege that the Final Rule goes against longstanding case law and IRS rulings that hold getting a tax benefit does not diminish charitable intent and that the expectation of a tax benefit does not give rise to an impermissible quid pro quo. In the complaint, the states argue that the regulations amount to impermissible policy-making by the Administration. They also allege that the Final Rule “undermines state and local programs designed to promote charitable giving through the use of state and local credits.” The case was filed in the Southern District of New York.