May 25, 2017

President Donald Trump unveiled this week the complete details of his nearly $4.1 trillion fiscal-year 2018 budget request. The president’s spending plan, which would slash entitlement programs by $1.7 trillion over the ensuing decade and cut $54 billion from domestic discretionary accounts next year, was immediately panned by congressional Democrats and only tacitly supported by some GOP lawmakers. In fact, a number of Republicans were quick to dismiss the budget, suggesting that the president’s spending recommendations will largely fall by the wayside as lawmakers write and negotiate the 12 annual appropriations measures.

The Trump budget assumes that total revenues in 2018 will reach $3.7 trillion, producing a net budget deficit of $440 billion next fiscal year. Based on proposed shifts in federal spending and tax revenues, the budget projects a $16 billion surplus by 2027, with the gross federal debt growing to $25 trillion by that same year.

With regard to entitlement program savings, President Trump is recommending cuts of $610 billion to Medicaid on top of the program reductions that were included in the House-passed healthcare reform bill. The combined cost shift to states and counties would amount to between $1.3 and $1.4 trillion over ten years, or a 45 to 50 percent cut in the federal contribution to Medicaid compared to what is projected under current law.

The administration also is proposing long-term funding reductions for a number of other mandatory spending programs, including: a 10 percent cut in the Temporary Assistance for Needy Families block grant (which would translate into California losing nearly $360 million annually); a decrease in the federal matching percentage for the Children’s Health Insurance Program (the federal contribution to California would decrease from 88 percent to 65 percent); and, a 25 percent cut by 2023 to the Supplemental Nutrition Assistance Program (SNAP).

Within the aforementioned domestic discretionary spending reductions – which total $54 billion in 2018 and would be used to offset a commensurate increase in defense-related spending – the administration is proposing cuts to a number of county programs. Among others, the Trump budget would eliminate funding for the State Criminal Alien Assistance Program (SCAAP), the Community Development Block Grant (CDBG), the Community Services Block Grant (CSBG), the Low Income Home Energy Assistance Program (LIHEAP), and the Transportation Investment Generating Economic Recovery (TIGER) grants. All told, the budget would completely eliminate funding for over 60 federal programs to the tune of nearly $27 billion.

Dozens of other county programs would be cut by varying percentages, including state and local law enforcement grants, state and local Homeland Security and FEMA grants, and the Payments-in-lieu-of-Taxes (PILT) program.

CSAC is continuing to analyze the impact of President Trump’s proposed budget and will be working with members of the California congressional delegation throughout the fiscal year 2018 appropriations process to protect funding for programs that are of vital interest to California’s counties.

New Details on Infrastructure Plan Included in Budget

Within the White House budget document is a preview of how the administration intends to make good on President Trump’s pledge to spend $1 trillion over 10 years to modernize the nation’s crumbling infrastructure. According to the administration, the target of $1 trillion in infrastructure investment will be met by a combination of new federal funding, incentivized non-federal funding, and newly prioritized and expedited projects. In total, the 2018 budget would provide $200 billion in direct federal spending for the infrastructure initiative.

To help leverage public and private dollars, the budget proposes to expand the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. TIFIA helps finance surface transportation projects through direct loans, loan guarantees, and lines of credit. The White House also is proposing to drive investment by lifting the cap on private activity bonds and expand eligibility to other non-federal public infrastructure. Furthermore, the budget proposes to incentivize innovative approaches to congestion mitigation and includes language that would liberalize tolling policies and allow private investment in rest areas.

Sanctuary Jurisdictions

The Trump budget proposes new statutory language designed to crack down on so-called sanctuary jurisdictions. Specifically, the administration is attempting to broaden its authority to compel jurisdictions to cooperate with federal immigration and law enforcement officials by rewriting a key section of the 1996 immigration reform law (found at 8 USC Section 1373) that governs interaction between state and local authorities and the federal government.

Under the language, state and local law enforcement agencies would be required to comply with detainers issued by Immigration and Customs Enforcement (ICE) agents. Detainers are requests that localities keep inmates in custody for up to 48 hours beyond their scheduled release date in order to give federal immigration authorities time to intervene. Incidentally, federal courts have ruled that, under the U.S. Constitution, local law enforcement agencies are not permitted to keep people in jail unless there is a judicial warrant supported by probable cause (ICE detainers are typically issued without a warrant).

The proposed statutory language also would prohibit states and localities from adopting policies that prevent law enforcement agencies from inquiring about the nationality, citizenship, immigration status, home address, contact information, etc., of any individual currently or previously in custody.

As an enforcement tool, the budget would allow the Department of Homeland Security (DHS) and the Department of Justice (DOJ) to condition future DHS/DOJ grant funds to states and local governments based on their compliance with the aforementioned new statutory stipulations. It should be noted that the White House has essentially acknowledged in recent memoranda that it is unable to withhold non-immigration/law enforcement-related grant funds from jurisdictions that it deems to be in noncompliance with 8 USC Section 1373.

Finally, the administration’s legislative proposal is expected to face fierce resistance in Congress. In the Senate, proponents of the president’s language would need 60 votes to pass the expanded enforcement authorities that the administration is seeking.

CBO Issues Score of House-Passed Healthcare Bill

The Congressional Budget Office (CBO) released this week its updated score of the House-passed American Health Care Act (HR 1628). According to CBO, 23 million individuals would lose health insurance under the legislation. Furthermore, Medicaid would be reduced by $834 billion over ten years, amounting to a federal cut of approximately 25 percent for an average state.

CBO also analyzed provisions of HR 1628 that would allow states to seek waivers from key Affordable Care Act (ACA) mandates, including current law requirements that insurance companies cover individuals with pre-existing conditions and provide a set list of essential health benefits. According to CBO, roughly one-sixth of individuals live in states that would likely pursue exemptions from the aforementioned ACA requirements. In those states, healthcare premiums would often be unaffordable for older individuals, as well as for those with medical conditions.

Looking ahead, Republican senators are working behind the scenes on an alternative to the House-passed legislation. There is no clear path forward, however, and the new CBO score has likely complicated the efforts of GOP leaders to garner the support of the moderate wing of the upper chamber.

Napa County Supervisor Testifies Before House Panel

On Wednesday, Napa County Supervisor Diane Dillon testified before the House Natural Resources Committee’s Oversight and Investigations Subcommittee for its hearing entitled “Examining Impacts of Federal Natural Resources Laws Gone Astray.” The panel heard from several witnesses who offered their views on the manner in which federal regulatory agencies have implemented certain laws under their jurisdictional purview.

For her part, Supervisor Dillon discussed the Indian Reorganization Act (IRA) and the longstanding deficiencies of the Bureau of Indian Affairs’ (BIA) administratively driven fee-to-trust process. The IRA, which has not been amended by Congress since its passage in 1934, provides the Secretary with broad legal powers to take land into trust for the benefit of Indian tribes but does not include any standards relative to the exercise of the Secretary’s trust acquisition authority.

During her testimony, Dillion described a number of specific defects of the fee-to-trust process, including unsatisfactory notice to key stakeholders, a lack of transparency, and insufficient consideration of the off-reservation impacts of tribal development projects. As noted by the supervisor, the inadequate legal framework has led to longstanding conflicts and litigation between tribes, local governments, and other parties. Dillion also offered a number of concrete suggestions – many of which have been championed by CSAC in its pursuit of comprehensive fee-to-trust reform – for how to improve the law and its implementation.

To view a copy of Supervisor Dillon’s written testimony, please click on the following link: Dillon Testimony