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National Association of Counties * Washington, D.C.      Vol. 32, No. 20 * November 6, 2000

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Unruly Congress fails to finish business

By NACo Legislative Affairs staff


Congress has been unable to finish some very important legislating before Election Day, and at press time, partisan wrangling has even kept them from agreeing on how to keep portions of the government operating over the next few weeks.

On Nov. 1, the Senate leadership agreed to a two-week “cooling off” period and a “lame duck” session after the election. The Senate passed a 1-day continuing resolution to fund those agencies whose appropriations bills have yet to pass.

In the House, the Senate-passed plan collapsed amid a climate of mutual mistrust between the two parties and an absence of communication between Republicans and Democrats.

A lame duck session is not a popular option, and significant legislative mischief can occur during one of these sessions. If Congress chooses to have a lame duck session, it would be only the tenth such session since the adoption of the 20th Amendment to the Constitution in 1933. The last such session was in 1998 for the impeachment of President Clinton.

How this legislative situation is resolved remains to be seen, but what is clear at press time is that a number of important legislative items are pending that have significant implications for counties.

First, Congress is holding up a major tax bill that includes:

Bond changes
NACo joined a number of other state and local government organizations in support of bond provisions in the legislation. The measure includes a number of infrastructure funding proposals that have been long-standing NACo priorities. The annual state private activity bond volume cap would be increased 25 percent on Jan. 1, 2001 and increased another 25 percent on Jan. 1, 2002.
The low-income housing tax credit would also be increased by a total of 50 percent on the same 2001 and 2002 schedule. Both provisions would be indexed for inflation starting in 2003. The bill also provides a longer spend-out period without incurring arbitrage penalties for school construction bonds.

Pension Reform
The pension reform section of the tax bill would make many changes that would benefit county workers. First, it would increase the total amount of funds that can be paid into a 457-deferred compensation plan to $15,000 over five years.

Second, it would ease rollover restrictions between defined benefit and defined contribution plans, thereby making it much easier for workers to move their pensions between different types of plans when they change jobs.

Third, it would provide for increased catch-up contributions to public sector retirement plans.

And finally, it would allow individuals who move from a defined benefits plan to purchase service credits so that they can obtain full pension benefits. NACo supports the pension reform and simplification provisions.

Medicare relief
The Medicare relief package would provide about $30 billion over five years to providers, including about $8 billion to hospitals, $8 million to HMOs and $1.7 billion to skilled nursing facilities. The package also includes a freeze on further cuts to the Medicaid Disproportionate Share Hospital (DSH) program for FY2001 and FY2002. NACo has strongly advocated for such a freeze throughout this session.

However, the provision in the bill also stipulates that in FY2003 cuts to Medicaid DSH would revert to the original schedule provided in the Balanced Budget Act of 1997. While this language is problematic, it does not override the immediate benefits of a two-year freeze.

Other provisions include a further one-year delay in a scheduled 15 percent reduction in reimbursements for home health agencies and a further delay on the implementation of capping outpatient physical, speech, and occupational therapies offered by non-hospital providers.

President Clinton has cited the current distribution of funds in the Medicare relief provisions as one reason for a veto of the tax bill. The president believes that the monies are unduly skewed toward the Medicare HMO and that these HMOs should be required to stay in a service area for at least three years.

School construction
While there is strong bipartisan support for President Clinton’s school construction proposals on interest-free bonds, there is disagreement about whether Davis-Bacon rules should apply to these funds.

The White House and congressional Democrats are insisting that these funds be treated like other federal construction dollars. This would mean that construction companies would be required to pay the prevailing wage under Davis-Bacon. Congressional Republicans have taken the opposite approach, arguing that no federal dollars are involved in the construction projects themselves and, therefore, the Davis-Bacon Act should not apply.

NACo has taken no specific position on this issue, but has consistently argued that the application of Davis-Bacon must be modified to reflect local distinctions in prevailing wage rate.

Next, Congress and the White House remain embattled over a number of items in appropriations bills:

Justice funding
The good news about the Commerce, Justice, State appropriations bill is that it contains an increase to local governments of more than $500 million over last year’s level. The bad news: It’s mired in disagreements over issues unrelated to funding levels.

Under the measure, community policing would receive a major increase in FY2001 with an allocation of $1.03 billion, or nearly double the FY2000 funding level of $595 million. Included in this amount is $100 million for a new community prosecutor’s program to litigate violent crimes committed with guns and violations of gun statutes in cases involving drug trafficking and gang-related crime.

Within the COPS program $30 million has also been included for offender re-entry programs, $17 million to support police integrity training, $180 million for school resource officers and $25.5 million for bulletproof vests.

The bill also includes $569 million for the Byrne Block Grant Program (an increase of $17 million over FY2000); $250 million for the Juvenile Accountability Incentive Block Grant; $279 million for other juvenile justice programs under the Juvenile Justice and Delinquency Prevention Act; and $523 million for the Local Law Enforcement Block Grant program.

Drug courts receive $50 million, an increase of $10 million over FY2000; $30 million is set aside for DNA testing and lab improvements; and $48.5 million for methamphetamine programs. Also included is $330 million for the Legal Services Corporation and $288.7 million for grant programs under the Violence Against Women Act. Prison and jail construction grants come in at $451 million, while $30 million is set aside for offender re-entry programs

The State Criminal Alien Assistance Program (a program that reimburses states and counties for illegal alien correctional expenditures) is reduced from $585 million to $565 million. The $565 million proposal is nevertheless a major increase over the Senate Finance Committee’s initial funding level of $50 million.

Sale of SocialSee Security numbers
The Commerce, Justice and State Appropriations bill includes language that would prohibit the sale of Social Security numbers to individuals to help prevent identity theft. State and local governments would be exempt from the provisions of this bill. They could continue selling records containing Social Security numbers.

Workforce funding
Funding for Workforce Investment Act programs are suffering by lack of congressional action on the Labor, Human services and Education appropriations bill. Expectations are that FY2001 funding will be about $300 million over FY2000 funding, with these additional funds going to youth and dislocated worker programs.

Title XX – Social Services Block Grant
The Labor/HHS/Education bill also includes $1.725 billion for Title XX. This is $50 million lower than current funding.

These bills are not likely to be resolved easily, and the impact of the outcomes of the election on the legislative dynamics range across the entire spectrum. Regardless of how Congress eventually resolves these conflicts, it will be interesting political theatre.

(If you would like additional information, contact Ed Rosado, NACo Legislative Affairs Department director, at (202) 942-4271 or e-mail: erosado@naco.org.)

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