September Legislative Calendar: An Opportunity for Fiscal Responsibility

Congress will return from August recess September 5th and have a mere 12 legislative days to address a number of “must pass” legislative priorities including the expiration of discretionary appropriations that must be renewed within the constraints of the Budget Control Act (BCA) for fiscal year 2018, the debt limit, the Federal Aviation Administration (FAA), the National Flood Insurance Program (NFIP), and the State Children’s Health Insurance Program (SCHIP). On top of this, Congress will also need to provide significant funding for Hurricane Harvey relief efforts.

During the Obama administration, Congress exercised little fiscal restraint (outside of the Budget Control Act of 2011) and routinely passed last-minute, short-term continuing resolutions or trillion-dollar spending packages with little to no reforms. The failures of the past must not continue. In November of 2016, the American people elected the party of “fiscal responsibility” to lead all three branches of the federal government. The Republican Party now has a clear opportunity to live up to its name by enacting fiscally responsible legislation into law this September.

Appropriations/Budget Control Act

On fiscal year 2018 appropriations, Congress should follow President Trump’s lead by sticking to the spending levels established under the BCA. Congress should break the Obama-era firewall between defense and non-defense spending and fully fund the U.S. military via corresponding cuts to domestic programs. Because the BCA has been the most effective mechanism for controlling the growth of discretionary spending, Congress should extend the overall cap through 2021. Longstanding conservative policy provisions should also be included in the appropriations measures.

Debt Limit

Our national debt is quickly approaching $20 trillion and has already exceeded annual U.S. gross domestic product (GDP). This kind of spending-induced government debt slows economic growth, restricts job creation, wage increases, and business expansion. Before Congress agrees to raise the debt limit any further, it should deliver on candidate Trump’s promise to “start to pay down our $19 trillion in debt.” Even a small step toward this promise, such as strengthening the statutory pay-go that removes the exemption for non-trust fund, mandatory spending programs, would send the right signal to the American people that the Republican Party is committed to addressing the structural nature of America’s annual deficit.

Federal Aviation Administration

The FAA’s legal authority expires September 30, 2017 and is long overdue for reform. America’s current aviation system has fallen well behind our foreign counterparts due to excessive government regulation and a broken aviation finance system. But thanks to the persistent work of Chairman Bill Shuster (R-Pa.), the House Transportation and Infrastructure Committee recently introduced the 21st Century Aviation Innovation, Reform, and Reauthorization (AIRR) Act (H.R. 2997), that would turn the Air Traffic Control (ATC) system into a standalone government-sanctioned, non-profit corporation and reauthorize the FAA for fiscal years 2018-2023. While not perfect, this bill would free air traffic control services from federal government bureaucrats and allow the new entity to innovate and improve while ensuring flight safety and saving taxpayer dollars.

National Flood Insurance Program & Hurricane Harvey

The NFIP is also set to expire September 30, 2017. Through the NFIP, the federal government maintains a monopoly on virtually all primary flood insurance for homeowners and businesses, and owes nearly $25 billion to U.S. taxpayers. The program has failed to adequately map flood risks and actually promotes development in flood zones through generous subsidies, which worsens the devastation of natural disasters. In the wake of Hurricane Harvey, reforming the NFIP is needed now more than ever. Additional borrowing authority may be necessary in order to cover claims to policyholders in the areas impacted by Harvey, but this should be accompanied by reforms that would initiate the phase-out of the national flood insurance monopoly in favor of a private insurance market.

Additional funding authorized for Harvey relief efforts should meet the requirements of emergency designated spending: necessary, sudden, urgent, unforeseen, and not permanent. Funding that does not meet this criteria should be fully offset and remain within the BCA spending caps. It is imperative to avoid the mistakes of congressional efforts to respond to Sandy in 2012.

State Children’s Health Insurance Program

This joint federal-state low-income children insurance program is also set to expire September 30, 2017. Originally designed as a federal-state partnership, the program has largely become another expensive federal program that has failed to provide the quality of care or choice our families and children deserve. Congress should convert SCHIP funding into a defined contribution program, thus giving parents the option of enrolling their children in any health plan of their choice, including, if available, employer-based coverage. Congress should require the states to share more of the cost of the program by limiting federal payment over time to coverage for children at, or below, 250 percent of the federal poverty line.  

Conclusion

While addressing all of these expiring legislative priorities in a fiscally responsible way is a challenging task, Congress has all the necessary tools at their disposal to do the right thing. President Trump and Republicans in Congress were voted into office, in part, to help get our fiscal house in order. The month of September provides Congress with multiple opportunities to do just that and show the American people it can effectively govern.

Related:
Heritage Foundation: A September Action Guide for Congress in 2017 (2017)
Heritage Foundation: Blueprint for Balance: A Federal Budget for Fiscal Year 2018 (2017)
Heritage Foundation: 2017 Debt Limit Should Trigger Spending Limit—with Enforcement (2017)
Heritage Foundation: 2018 FAA Reauthorization: Potential for Positive Air Traffic Control Reforms, But More Policy Improvements Needed (2017)
Heritage Foundation: The National Flood Insurance Program: Drowning in Debt and Due for Phase-out (2017)

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Tax Reform Toolkit

Over the past few decades, the U.S. tax code has become a significant obstacle to economic growth, job creation and higher wages for American workers.

President Donald Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell made it clear before the November 2016 election that pro-growth tax reform would be a major legislative priority for Republicans in 2017 if they were given the chance to govern. Now that the American people gave Republicans control of the House, Senate and White House, there is a real opportunity to achieve comprehensive, pro-growth tax reform.

A rewrite of the tax code couldn’t come soon enough. It has been far too long since Congress made major updates to the tax code. In fact, the last major reform of our nation’s tax code was under the Reagan administration in 1986, and every major effort since then has failed. After three decades of no major changes to the tax code and a stagnant economy, the time for tax reform is now.

Key Talking Points:

Our tax code currently:

  • Suppresses American business creation and growth. Our high corporate tax rate is a problem for American businesses. The U.S. corporate tax rate of 39.1 percent is the highest rate in the world and reduces domestic investment.  
  • Is far too complex for the average citizen. The individual tax system is a problem for families. In 1913, the tax code was a reasonable 400 pages long, but by 2013 it grew to over 74,000 pages. Americans spend nearly 9 billion hours complying with the tax code every year.
  • Is full of special interests. Pervasive cronyism in our tax code hurts entrepreneurs and consumers. Over decades, Congress has enacted policies that manipulate the marketplace to benefit certain business or industries.

Accordingly, tax reform should include the following principles:

  • Lower and simplify individual tax rates. Tax reforms should aim to improve the simplicity and transparency of paying taxes. Lowering overall rates will allow families and hard working Americans to keep more of their earnings.
  • Lower the corporate tax rate. Congress should lower the corporate tax rate to encourage growth and investment.
  • Permit tax free entrepreneurship: Businesses should be permitted to deduct the full cost of their capital expenses when they incur them, known as expensing, rather than over many years using cumbersome depreciation schedules currently in effect.
  • Establish a territorial tax system. High U.S. tax rates reduce domestic investment by both U.S. headquartered business and foreign businesses, stifling job creation and wage growth.
  • End cronyism. Tax reform should explicitly seek to abolish policies that Congress intended to benefit particular industries or particular groups.

To learn more read the full Sentinel brief available here.

(Make sure to insert the Twitter handle of your Representative)

  • Click to tweet: @MEMBER it’s time for Congress to pass #ProGrowth policies and #TaxReform that allows America to prosper
  • Click to tweet: @MEMBER Americans need #taxreform that levels the playing field and ends special interest handouts. #ProGrowth
  • Click to tweet: @MEMBER tax laws should not favor the well-connected over hard-working taxpayers #TaxReform
  • Click to tweet: @MEMBER our high U.S. corporate tax rates are making American companies uncompetitive. #TaxReform should lower rates.
  • Click to tweet: @MEMBER #ProGrowth #TaxReform should stand up to special interests and serve American taxpayers

General Tweets:

  • Click to tweet: It’s been too long since Congress passed meaningful #TaxReform. The time is now to push forward #ProGrowth policies
  • Click to tweet: #TaxReform could bring back more than $2.6 trillion in profits currently locked out of the U.S.
  • Click to tweet: #ProGrowth #TaxReform would encourage new business investment, job creation and wage growth
  • Click to tweet: Americans spend nearly 9 billion hours complying with the tax code every year, we need to simplify tax code #TaxReform
  • Click to tweet: True #TaxReform must be fair for all hardworking Americans. No more special interest handouts!

These are notes to use when calling your member of Congress. You can find their phone number on the Heritage Action Dashboard.

Hi, I’m [NAME] from [STATE].

It is my understanding that Congress is expected to consider tax reform legislation in the coming months. This effort is long overdue and presents a real opportunity to rewrite tax laws that are currently holding American business back, allowing IRS bureaucrats to pick ‘winners and losers,’ and enabling cronyism to pervade Washington.

Americans should not be burdened to comply with a tax code that is far too complex for the average citizen. By the same token, it is unacceptable that the tax code has been deliberately made more complex by lobbyists to benefit big business, big labor, and big government interests.

America needs tax reform. Reform should provide common sense solutions to the problems facing individual Americans – studies show that Americans spend nearly 9 billion hours complying with the tax code every year, costing our economy over $400 billion in foregone economic growth.

More importantly, business tax reforms are necessary to grow the economy and spur job creation – at an average of 39.1 percent, the U.S. corporate tax rate is the highest in the industrialized world. This rate, combined with the inability of businesses to fully deduct their cost of new capital investment, makes American companies uncompetitive with their foreign counterparts.  

Please tell the Congressman to be aware of these issues when reforming the tax code. Above all, I expect Congressman [NAME] to stand up to special interests and serve American taxpayers and [his/her] constituents. It is time to reform outdated tax laws with a principled approach – to end cronyism, simplify our tax code, and support American business with pro-growth policies.

Below is a sample letter to the editor. We encourage you to adapt and personalize the letter below. Heritage Action Regional Coordinators are always here to help edit your letter and get it published.

Congressman [X],

Today, we have an anti-growth, complex and out-of-date tax code. President Donald Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell made it clear before the November 2016 election that pro-growth tax reform would be a major legislative priority for Republicans in 2017 if they were given the chance to govern.  

Our tax code currently suppresses American business growth, is far too complex for the average citizen, and is full of cronyism. Accordingly, I encourage [you] to stick to the following principles on tax reform: lower and simplify individual tax rates, lower the corporate tax rate, permit “full expensing,” establish a territorial tax system, and end cronyism.

The American people gave Republicans control of the House, Senate and White House, and there is a real opportunity to achieve comprehensive, pro-growth tax reform. Congress can use this as an opportunity to pair tax reform with spending cuts in order to comply with the rules of budget reconciliation and maximize the economic benefits of tax reform. After all, the federal government has a spending problem, not a revenue problem.

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End the Obamacare Exemption for Congress

Background: Back in 2013, the Obama administration’s Office of Personnel Management (OPM) exempted members of Congress and their staff from the full burden of Obamacare by letting them enroll in the D.C. small business exchange to receive taxpayer subsidized plans, even though a small business was defined as fewer than 50 employees. Now, as millions of Americans continue to watch their health insurance premiums increase, members of Congress and their staffs remain exempt from the rising costs.

Problem: Indicative of the lawlessness of the Obama administration, Congress actually pleaded behind closed doors for the president to grant them a special exemption. Although Obamacare was signed into law in 2010, its provisions that pertain to Congress were phased in years later — just when Obamacare was starting to unravel. With their personal interest now at stake, members took a closer look at what the law required of them. A Heritage Foundation legal memoexplained at the time:

“One such provision is Section 1312(d)(3)(D), which reads: ‘Notwithstanding any other provision of law … the only health plans that the Federal Government may make available to Members of Congress and congressional staff … shall be health plans that are … created under this Act … or … offered through an Exchange established under this Act….’. Under this provision, it is clear that Members of Congress and their staff should lose their current employer-sponsored health insurance program.”

Members and their staff were initially required to opt-into Obamacare; however, President Obama’s OPM stepped in at the last minute to grant a taxpayer subsidized exemption — by redefining Congress to qualify as a “small business” under a separate part of the law. Heritage
Action explained in a coalition letter:

“Obama directed OPM to issue a rule purporting that Congress, which has thousands of employees, is a small business and therefore: ‘the DC Health Link Small Business Market administered by the DC Health Benefit Exchange Authority, is the appropriate SHOP from which Members of Congress and designated congressional staff will purchase health insurance in order to receive a Government contribution.’”

This maneuvering is the exact problem in Washington, D.C. — premiums double for the American people and Congress illegally forces taxpayers to subsidize their premiums.

Solution: Fortunately, just as the Obama administration’s OPM unilaterally established the Congressional exemption, so also can the Trump administration’s OPM rescind the rule. A coalition of conservative groups, including Heritage Action, sent a letter to President Trump on July 21, 2017, urging the President to take this step. Weeks later, the Senate essentially abandoned its effort to repeal and replace Obamacare.

If the Republican-controlled Senate cannot deliver on their promise to repeal and replace Obamacare, President Trump should subject Congress to the full brunt of the law until they do so. Trump should unilaterally undo Obama’s illegal exemption, requiring members of Congress to live under the law it forced onto the American people. Facing the reality of double-digit premium increases, Congress may feel pressure to come back to the negotiating table and follow through on years of promises to finally end the Obamacare nightmare.

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No More Obamacare Bailouts

Background: In an effort to win the support of health insurance companies during the debate over Obamacare in 2009, three health insurer bailout provisions were written into the bill to compensate health insurance companies for insuring high-cost consumers in the Obamacare state exchanges. These three bailout provisions include risk corridors, reinsurance and cost-sharing reduction subsidies. Combined, these could cost taxpayers $170 billion over the next decade. The risk corridor and reinsurance provisions expired last year, while cost-sharing reduction subsidies are currently in flux.

Cost-Sharing Reduction Subsidies: This third Obamacare bailout provision uses taxpayer dollars to subsidize health insurance deductibles and co-payments for plans bought by households with incomes less than 250 percent of the federal poverty line. While Obamacare intended to create cost-sharing reduction subsidies, the bill text does not include language funding the subsidies. However, the Obama administration ignored the plain reading of the law and paid for the subsidies using taxpayer dollars to the tune of nearly $14 billion.

In response, Congress sued the Obama administration in November of 2014 in U.S. House of Representatives v. Burwell. The House argued that the White House violated its Constitutional authority by spending money not authorized by Congress. In May of 2016, federal district court Judge Rosemary Collyer ruled in favor of the House, but the Obama administration appealed the decision to the D.C. Circuit Court. Now with President Trump in the White House, the last Obamacare bailout can be eliminated permanently. All President Trump has to do is accept the court’s initial ruling and stop paying the subsidies.

Problem: Since the November 2016 elections, congressional Republicans worked on legislation to repeal and replace parts of Obamacare. The House narrowly passed the American Health Care Act (AHCA) on May 4th, 2017 by a vote of 217 to 213, but Senate Republicans failed to pass their version of the bill called the Better Care Reconciliation Act (BCRA) or even a scaled down version of Obamacare repeal called the “Skinny Repeal” bill. The latter failed when moderate Republicans refused to allow the bill to proceed to a conference committee where revised legislation could have been crafted and voted on.

Instead of repealing and replacing Obamacare, moderate Republicans are now working with Democrats to appropriate the Obamacare cost-sharing reduction subsidies to bail out insurance companies and prop up Obamacare. Senator Lamar Alexander (R-Tenn.) announced the Help, Education, Labor and Pensions (HELP) Committee that he chairs would hold a hearing in early September “on the actions Congress should take to stabilize and strengthen [Obamacare’s] individual health insurance market, so that Americans will be able to buy insurance at affordable prices in the year 2018.”

Ed Haislmaier, an expert in health care policy and markets at The Heritage Foundation, explains the continuation of the cost-sharing reduction subsidies “will not help stabilize the broader individual market because the cost-sharing reductions apply only to plans purchased through the Obamacare exchanges.”

Solution: Under Obamacare, average individual market premiums more than doubled while health insurance companies fled the marketplace leaving 70 percent of U.S. counties with only one or two insurers. This all took place while President Obama was illegally paying out the cost-sharing subsidies. Authorizing the subsidies will do nothing to fix the underlying problems of our broken U.S. health care system spurred on by Obamacare. “What is instead needed to stabilize the unsubsidized market is the removal of Obamacare’s cost-increasing insurance mandates and misguided regulations,” Haislmaier explained. Heritage Action chief executive officer Michael A. Needham recently stated:

“The Senate’s inability to produce 51 votes for a piece of legislation that delivers on a seven-year campaign promise to repeal and replace Obamacare is not license for a bipartisan bailout of a failing law. Networks continue to narrow. Premiums continue to rise. And choice continues to decline. Obamacare is becoming a zombie law, and throwing more taxpayer money at Zombiecare is unacceptable.”

Senate Republicans must go back to the drawing board and find consensus on a plan to repeal and replace Obamacare. Until they do so, President Trump could simply withhold the Obamacare cost-sharing reduction subsidies and demand Republicans fulfill their seven-year old promise to repeal this disastrous law.

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Employee Rights Act (ERA) Toolkit

Earlier this year, Rep. Phil Roe (R-Tenn.) introduced the Employee Rights Act (H.R. 2723). This legislation would protect workers from union pressure by putting power in the hands of employees and making union leaders more accountable to their members.

For decades, and especially under the Obama administration, numerous rules that infringe on workers’ rights have been imposed on the American people. This is not only unproductive and wasteful in economic terms — it undermines individual liberty.

Today, conservatives have the opportunity to reverse such abuses and protect workers from government and union overreach. Making sure your Representative cosponsors the Employee Rights Act is a critical first step.  

Key Talking Points:

  • The Employee Rights Act would protect employees from union overreach by guaranteeing employees the right to:
    • Use a secret ballot when voting to ensure employees are protected from intimidation and reprisals by union bosses.
    • Decide when and if their union can spend money on matters unrelated to collective bargaining, a tactic union leaders often use to fund liberal candidates or causes without the explicit permission of their members.
    • Opt out of having their personal contact information provided to an organizing drive, a tactic used by unions to pass their private information to groups they politically disagree with.
  • These provisions are common sense protections. In fact, recent polling has found that between 64 and 88 percent of union households support each provision.

To learn more read the full Sentinel brief available here.

(Make sure to insert the twitter handle of your Representative)

  • @MEMBER cosponsor the Employee Rights Act. A majority of union households support its provisions. #ERA
  • @MEMBER Employee Rights Act would make union leaders more accountable to their members and protect workers. #ERA
  • @MEMBER outdated labor laws should be replaced with sensible policy. Employee Rights Act solves problems workers face today. #ERA
  • Congress has opportunity to restore workers’ rights. @MEMBER Americans want #ERA

General Tweets:

  • #ERA would reverse growing trend of overreach by union bosses. Employee rights — not labor union rights — must be restored.
  • Numerous #Obama labor rules imposed on the American people still infringe on workers’ rights. It’s time for Employee Rights Act #ERA
  • Gov’t shouldn’t tip the scale in relationship between unions & workers. Employee Rights Act establishes proper roles. #ERA

These are notes to use when calling your member of Congress. You can find their phone number on the Heritage Action Dashboard.

Hi, I’m [NAME] from [STATE].

Rep. Phil Roe introduced the Employee Rights Act (H.R. 2723) and I noticed the Congressman is not a cosponsor. This legislation would protect workers from union pressure by putting power back in the hands of employees and making union leaders more accountable to their members.

Workers should not be pressured or coerced by unions or union bosses to take actions that undermine their rights. ERA provides common sense solutions to these problems – polling shows between 71 and 88 percent of union households support ERA’s provisions.

Please tell the Congressman to co-sponsor Employee Rights Act. The bill now has over 80 cosponsors, and the House Committee on Education and the Workforce has held hearings. It’s time to reform outdated labor laws and ensure essential rights of employees are protected.

Below is a sample letter to the editor. We encourage you to adapt and personalize the letter below. Heritage Action Regional Coordinators are always here to help edit your letter and get it published.

Congressman [X], Support Employee Rights

Though the purpose of labor unions is ostensibly to protect workers, they often fail to do so because they are motivated by the “institutional objectives” of expanding in size, income and influence.

For decades, and especially under the Obama administration, numerous rules that infringe on workers’ rights have been imposed on the American people. This is not only unproductive and wasteful in economic terms — it negates individual liberty.

Workers deserve a say in decisions that put their jobs at risk. The Employee Rights Act would amend this by requiring a secret ballot vote before a union can call a strike. Furthermore, the bill would solidify paycheck protection provisions, provide a mechanism for union re-certification, and finally criminalize union threats under federal law.

If passed and signed into law, this legislation would solve many problems workers face today, including problems enshrined in current labor law. The bill would help restore a balance of power in the workplace from unions to workers and help ensure labor unions best serve the interests of employees, not union bosses.

Congressman [X] should support individual employee rights by cosponsoring the Employee Rights Act.

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