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ADVOCACY & POLICY UPDATE - June 26, 2023

Senate Committee Advances Appropriations Spending Bills


Washington Update


Appropriations


On Thursday, June 22, Senate appropriators approved the FY24 topline funding levels for the Military Construction-VA and Agriculture-PDA spending bills. This is the Senate Appropriations Committee’s first markup in two years, the first televised markup, as well as the first markup with two women - Chair Patty Murray (WA) and Vice Chair Susan Collins (ME) - leading the committee. Senate appropriators on both sides of the aisle are pushing for an agreement on emergency funding in the coming months for Ukraine, border security efforts and other issues. Lawmakers are hoping that the 302(b)s approved last week are not the final totals for the fiscal year.

Meanwhile, also on Thursday, House appropriators advanced their $11.3 billion Financial Services spending measure during subcommittee markup. The full panel is marking up the $826.5 billion Defense bill as well as the $52.4 billion Energy-Water bill. On Friday, June 23, the subcommittee held its markup of the $41.4 billion State-Foreign Operations bill. The measure counts on $11 billion in clawbacks of funding already allocated to the IRS and other agencies, which means the total and the allocation are vastly different. Aside from the offset, the bill’s non-defense discretionary allocation amounts to about $11.3 billion, roughly 58 percent below current spending. If proposed rescissions are included, the total is roughly $25.3 billion, which is around 7 percent below current funding.

If the House and Senate cannot clear the dozen annual spending bills by midnight on December 31, 2023, the recent bipartisan debt limit deal will trigger an automatic 1 percent funding cut across-the board, if a short-term continuing resolution is in effect.

This would pose an extremely difficult accounting problem for federal agencies, as well as a potential political nightmare for Speaker Kevin McCarthy and Biden, who both have a lot to lose in 2024. Even the deadline for those cuts is confusing, however. While the trigger date for a drop in spending levels under the debt agreement is technically January 1, if Congress fails to pass a new funding bill in time then top appropriators indicate the actual reductions wouldn’t take effect until the end of April. Nevertheless, Congress considers January 1 as the primary pressure point for FY24 funding negotiations.

Gainful Employment Rule

On Tuesday, June 20, House Committee on Education and the Workforce Chairwoman Virginia Foxx (NC) and Higher Education and Workforce Development Subcommittee Chairman Burgess Owens (UT) sent a letter to U.S. Secretary of Education Miguel Cardona, asking his agency to put a stop to its proposed gainful employment rule. The rule would restrict federal funding to for-profit higher education institutions whose graduates do not meet a particular debt-to-earnings ratio or a specific earning premium. Many Republicans feel the rule imposes burdensome requirements on postsecondary education institutions. Last Tuesday was the deadline to submit comments. The Department plans to begin implementing the finalized proposals as soon as July 1, 2024.

Click here to access the full letter.

House Committee Hearing

On Thursday, June 22, the House Committee on Education and the Workforce held the hearing “Competencies Over Degrees: Transitioning to a Skills-Based Economy.” Witness for the hearing included Dr. Karin Kimbrough, Chief Economist for LinkedIn Corporation; Dr. Mark Smith, Director of HR Thought Leadership for SHRM; Dr. Papia Debroy, Senior Vice President of Insights at Opportunity@Work; and Mr. Dan Healey, Head of People for Customer Success at SAP.

Click here to learn more about the hearing.

Child Care

On Wednesday, June 21, The Century Foundation released a report that discusses the ‘child care cliff’ that will occur after September 30, 2023 - when states will face a steep dropoff in federal child care investment. In 2021, the American Rescue Plan Act (APRA) provided nearly $40 billion in emergency aid for child care, which went to helping providers pay for rent, lowered tuition rates and increased wages for workers. After the support ends on September 30, the report predicts 3.2 million children could lose their daycare spots as roughly 70,000 programs are expected to close and 232,000 caregivers are expected to lose their jobs. The report predicts that the number of licensed programs could be cut in half in Arkansas, Montana, Utah, Virginia, Washington, D.C., and West Virginia, and in a dozen other states programs could drop by a third. The report predicts that New York and Texas will see the biggest losses in child care programs. The child care industry struggled even prior to the pandemic and now, after the pandemic exacerbated things, many states have already started to look for ways to continue to support child care programs even after federal aid ends in September.

Click here to access the report.

Click here to read an article on the ‘child care cliff.’

Initial Jobless Claims

In the week ending June 17, the advance figure for seasonally adjusted initial claims was 264,000, unchanged from the previous week's revised level. The previous week's level was revised up by 2,000 from 262,000 to 264,000. The 4-week moving average was 255,750, an increase of 8,500 from the previous week's revised average. This is the highest level for this average since November 13, 2021 when it was 260,000. The previous week's average was revised up by 500 from 246,750 to 247,250. The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending June 10, unchanged from the previous week's unrevised rate.

Click here to access the report.

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